Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.
So it might come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford Kurland, Countrywide’s former president, and his new company have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.
“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Kurland one recent morning in a boardroom at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.
“In fact, it’s off-the-charts good,” he told Kurland, even as the financial markets in New York were plunging.
As hundreds of billions of dollars flow from Washington to jump-start the nation’s banks, automakers and other industries, a new economy is emerging of businesses that hope to make money from the various government programs that make up the largest economic rescue in history.
They include contractors who are supplementing the labor of overworked government bureaucrats, big investors who are buying up failed banks taken over by the federal government and lobbyists helping businesses receive a chunk of the bailout money.