It’s critically important that Americans continue to understand just exactly what kind of crimes and corruption helped to crash the United States economy. One of the most disturbing things about all of this is the fact that none of the parties responsible for all of this have been held accountable.
Read some of the allegations from the United Guarantee v. Countrywide Complaint:
In reality, Countrywide had abandoned any reasonable and prudent
underwriting standard in order to secure as large a piece of the mortgage boom as
possible. Under the direction of former Chief Executive 4fftcer Angelo Mozilo and
former President and Chief Operating Officer David Sambol, Countrywide
systematically disregarded its own underwriting guidelines in order to generate an
unprecedented volume of loans and intentionally extended billions of dollars in
loans to borrowers who could not afford to repay loans, who committed fraud in
loan applications -often with the assistance and encouragement of Countrywide
employees and brokers – or who otherwise did not satisfy the basic risk criteria for
prudent and responsible lending that Countrywide claimed to use.
Countrywide’s failure to abide by any standard of care in its loan
origination practice dramatically changed the risk profile of the covered Mortgage
Loans, and as a direct result, thousands of insured loans are in default or foreclosure.
Due to the high number of defaults, United Guaranty undertook a review of the
Mortgage Loans and obtained from Countrywide the original loan files for a sample
of the loans. To date, United Guaranty’s review has found that the majority of the
Mortgage Loans were either underwritten in violation of Countrywide’s guidelines,
or contain some other material defect, such as missing documentation,
misrepresented credit scores, or false social security numbers. In many cases,
Countrywide’s files note that the sole justification for granting an underwriting
exception was to increase its market share by matching a competitor’s offer.
As a result of the unprecedented number of defaults in the Mortgage
Loans, United Guaranty has already paid out insurance claims totaling over $30
million and is exposed to additional claims of several hundred million dollars more.
if Countrywide had truthfully represented the Mortgage Loans, United Guaranty
would not have insured them at the same rate of premium, Instead, it would have
issued a different insurance policy at a different rate of premium, or refused to
insure the loans at all. Either way, United Guaranty would not be exposed to the
huge losses it faces today.
