The Countrywide Fraud Machine (CJR)

[chill_wind]

Columbia Journalism Review
Economic Crisis, The Audit — September 22, 2011 12:28 PM
The Countrywide Fraud Machine
Michael Hudson tallies up dozens of allegations that executives retaliated against whistleblowers

By Ryan Chittum

The Center for Public Integrity’s Michael Hudson, who’s done as much as any journalist—both before and after the crash—to expose how fraud was endemic to the mortgage industry, has a big investigation out today reporting on how Countrywide attacked internal whistleblowers to keep its fraud machine humming.

Last week, Hudson got the scoop on the Department of Labor ruling saying that Bank of America (which bought Countrywide in 2008) had illegally fired its head of mortgage-fraud investigations, Eileen Foster, as retaliation against her whistleblowing on BofA/Countrywide’s systematic mistreatment of whistleblowers.

The story’s top is damning, reporting how Foster’s team found bins full of documents in Boston headed for the shredder—papers that were fraudulent on their face, with Wite-Out and tape used to change critical details on loans, including appraisals. The fraud was so bad that Countrywide had to shut down six Boston offices. Here’s how Countrywide reacted, and note that this was the summer of 2007, a year after the housing bubble had burst:

She began to get pushback, she claims, from company officials who were unhappy with the investigation.

One executive, Foster says, sent an email to dozens of workers in the Boston region, warning them the fraud unit was on the case and not to put anything in their emails or instant messages that might be used against them. Another, she says, called her and growled into the phone: “I’m g—d—-ed sick and tired of these witch hunts.”

Her team was not allowed to interview a senior manager who oversaw the branches. Instead, she says, Countrywide’s Employee Relations Department did the interview and then let the manager’s boss vet the transcript before it was provided to Foster and the fraud unit…

By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

more (2 pages)
http://www.cjr.org/the_audit/the_countrywide_fraud_machine.php?page=1


Michael Hudson's extensive piece. Just incredible.

Countrywide protected fraudsters by silencing whistleblowers, say former employees

http://www.iwatchnews.org/2011/09/22/6687/countrywide-protected-fraudsters-silencing-whistleblowers-say-former-employees

One manager, Forwood says, tried to rationalize the fraud, telling investigators: What was the big deal if, say, five out of every 30 loans was fraudulent?

[vets74]

1. Yes, indeed. BAC did the same things at Merrill.

BAC was not quite up to it. They took over two banks and found that they had dropped-soap for two very large packs of horny mobsters.

The resulting BAC-screwing is still in process.

Hank Paulson ??? What a scheme ! Equal to his tranche-plus-AAA-scam contracts.

[chill_wind]

2. The Paulson Payoff at the Bush Treasury

paid off very well. VERY well. Just not for us schlepps who had no say about it.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2428419#2429895

Welcome aboard DU, btw.

ETA on edit- sorry to assume you were just new.

[vets74]

4. Thank you. My big talent is attracting DIGG PATRIOTS shills.

DU is a pretty good site. Very good that they show the traffic count.

[midnight]

3. k&R.