Edwards to End Investments With Lenders - "I will find a way to help (people being foreclosed on)"

[jsamuel]

Edwards to End Investments With Lenders
By MIKE GLOVER 08.17.07, 1:09 PM ET

DES MOINES, Iowa -

Democratic presidential candidate John Edwards, who has called homeownership "the foundation of the American dream," said Friday he will divest his holdings in funds linked to lenders that have foreclosed on Hurricane Katrina victims.

"I will not have my family's money involved in these firms that are foreclosing on people in New Orleans," he told the Associated Press.

...

"My reaction is I'm going to help these people," Edwards said in a telephone interview. "I just learned about this. I don't know the details, I will find out and I will find a way to help them."

Edwards has decried the predatory lending practices that sometimes accompany subprime mortgage lending, which especially target minorities and the elderly, and can tie people to home loans that they can't repay. He has built his campaign on an anti-poverty message and has toured and worked in the neighborhoods devastated by the 2005 hurricane. In fact, a three-day poverty tour he embarked on last month began in New Orleans' hardest hit Lower Ninth Ward.

...

Asked Friday if his investments damaged his image as a poverty fighter, Edward's said: "No. Everyone knows I am completely committed to eliminating poverty in this country. I have the strongest national predatory lending proposal. These are things I will pursue."

Edwards has proposed passing federal laws to prohibit mortgage abuses and help homeowners at risk of foreclosure or bankruptcy.

...

http://www.forbes.com/feeds/ap/2007/08/17/ap4031168.html

[loudsue]

1. I really like Edwards, and given the candidates we have, I'll vote for him in the primary.

But sometimes he sounds a little naieve. I agree with where he's coming from here, but if he thinks he can single-handedly take on all the bad guys, (I'm thinking about the media spin machine, and our bought-and-paid-for congresscritters) he's dreaming.

:kick:

[The Backlash Cometh]

3. You've got to start somewhere.

He should extend the challenge to the next million dollar pundit who tries to take him on.

[Vincardog]

4. If this country is to have any hope at all we all need to be "a little naive".

The only way out of this mess is if we ALL single-handedly take on all the bad guys. The movement we need is 400 Million of us all individually "single-handedly take on all the bad guys".

MLK did not make the civil rights movement;
the civil rights movement made MLK.

[Vadem]

12. I will, too, assuming Gore doesn't get in.... I like them both... n/t

[ryanus]

2. As long as the cure is not worse than the disease

[saracat]

5. Edwards seems to be the "Peoples Candidate". I like this and applaud this stand!

Go Johnny! Lord knows we need someone who actually "cares"!

[The Count]

62. ya mean, his pretty words - his stand is for the filty rich. Again.

(bankruptcy law vote in 2001)

[Cameron27]

6. He worked for them, invested up to 8.5 million with them,

and accepted donations from them without investigating what they were doing?

"Edwards worked part-time for Fortress Investment Group, getting paid $479,512. He and his wife also had $2.7 million to $8.5 million invested in a Fortress subsidiaries, according to ranges listed in his personal financial report. And Fortress executives have donated generously to his presidential campaign - company employees have donated more than $150,000 toward his candidacy during the first six months of the year"

Hedge funds are notorious for these kinds of practices, and Fortress also provided off-shore tax shelters for the very, very, very wealthy (at the very time he was working there). Edwards should have been aware of this before he decided to take a paycheck from them. He said he worked there to learn more about poverty, and yet he didn't think to ask about their involvement in sub-prime lending and foreclosures? Lack of good judgment, again.

[saracat]

10. So got any mutual funds, retirement funds? Do you know what is in them? I don't.

And I don't have his money.Are you saying all of us who can't tell you what is in our mutual funds have a "lack of judgement" ? And I once worked for an insurance company whose investments and activities I never investugated.I must have really bad judgement.Yet I still oppose insurace companies and predatory lending.Go figure.

[Cameron27]

13. I'm not faulting him for investing,

I'm questioning why he'd work for a hedge fund without investigating their practices, especially since he was there to learn about poverty. Hedge funds are KNOWN for this crap and he's not stupid. Did you take a job at the insurance company to learn about poverty? Did you work part time and rake in a six figure income, while traveling the country at their expense?

[saracat]

14. No but I would have taken it in a hot second if they offered! LOL!

[Cameron27]

16. Hey now,

:toast:

(good one)

[karynnj]

65. He worked there for $400K plus - and this was NOt a full time job

This is not like most of us checking boxes on the company's 401K form for funds and not looking at them again for months. Edwards was not your typical employee - he likely dealt only with the decision makers.

[1932]

52. ...and he has the strongest anti-predatory lending proposal of anyone.

[AtomicKitten]

7. Does he have anything to say about students screwed by predatory lending?

[1932]

53. College for Everyone.

In '03-'04, I remember distinctly that he was the only Democrat who had a proposal that actually reduced the cost of education. Even Dean's college program was simply more loans, which is exactly what Wall St. wanted Democrats to do.

[pacalo]

8. They seem to be putting a lot of effort into making it hard on homeowners here in So. LA.

Our home insurance went up $300 per month, or $3600 per year, three months ago. We were told by the insurance company that our rates could go down if we aren't hit by another hurricane, but how long will it take for them to make that decision, is the question.

The increase is like having a new-car payment, except that we have nothing to show for it.

[Adelante]

9. He knew about this in May, when he first said he didn't know about it

He said then he would see Fortress helped these people.

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/10/AR2007051002277.html

Why divest now when he didn't see the need to divest in May when this was first reported?

Edwards is never 100% believable to me. There's always something.

[jsamuel]

11. he did just learn then about the sub prime problem, now he learned about what they are doing in NO

and is putting a stop to it.

"I will not have my family's money involved in these firms that are foreclosing on people in New Orleans," he told the Associated Press.

...

"My reaction is I'm going to help these people," Edwards said in a telephone interview. "I just learned about this. I don't know the details, I will find out and I will find a way to help them."

[Adelante]

15. The Washington Post in May

Subprime loans have been particularly prevalent in New Orleans, which Edwards has made a focal point of his campaign. He formally announced his bid in a Katrina-ravaged neighborhood there and returned for a visit last week.

The New Orleans Times-Picayune reported in December 2005 on the problem of subprime loan foreclosures after Katrina, citing as an example Green Tree's effort to hold a 67-year-old hurricane victim in default on her subprime loan for a home two months after it was flooded out. Green Tree general counsel Brian Corey said that case was not representative of the company's practices in New Orleans.

Edwards said he asked Fortress this week to find Katrina victims foreclosed on by Green Tree and to help them. "I said, 'This is not okay that this is happening,' " he said. "I don't know how many cases there are . . . but the right thing is to go back and fix this."

[jsamuel]

17. I think you are blurring two different stories into one here. (Green tree vs Fortress)

If there was nothing new here (about Fortress and NO) then there would have been no need for the WSJ to publish the piece today. I think it is obvious that Edwards didn't know that Fortress was invested with lenders who were foreclosing on NO Katrina victims homes until that piece was written. The WSJ didn't either.

That story you linked to talks about how Edwards was asking to stop problems in NO caused by Green Tree.

He asked Fortess to help people who are being forclosed on:

Edwards said he asked Fortress this week to find Katrina victims foreclosed on by Green Tree and to help them. "I said, 'This is not okay that this is happening,' " he said. "I don't know how many cases there are . . . but the right thing is to go back and fix this."

[Adelante]

18. It's not two different stories

The WSJ piece today is much more detailed,

http://online.wsj.com/article/SB118728685546999884.html?mod=googlenews_wsj

but the basics of this story were published in the WaPo in May about Fortress owning a major share in Green Tree, which was foreclosing on Katrina victims, and having expanded into other subprimes:

Fortress hired Edwards as an adviser in October 2005, nearly a year after his losing campaign as Democratic vice presidential candidate. At the time, it owned a major stake in Green Tree Servicing LLC, which rose to prominence in the 1990s selling subprime loans to mobile-home owners and now services subprime loans originated by others.

Fortress and its partners bought Green Tree in 2003. According to documents filed with the Securities and Exchange Commission in April, its holding in Green Tree was as high as $492.4 million at the end of 2005 -- 4 percent of Fortress's holdings at the time.

Last July, Fortress expanded its stake in the industry by buying Texas-based Centex Home Equity, a top-25 subprime lender, for an estimated $540 million. In December, Centex Home Equity, now called Nationstar Mortgage, bought the loan-origination division of Champion Mortgage, bringing another subprime lender into the Fortress portfolio.

In March, Newcastle Investment Corp., a real estate investment trust managed by Fortress, announced that it, too, was moving into the subprime market with the purchase of a $1.7 billion loan portfolio. Also in March, Fortress bought about $4 billion in subprime loans from Fremont General Corp.

[jsamuel]

19. Then it looks like Fortress refused to help these people like Edwards asked.

So he has left them, after he learned that they didn't in the WSJ.

So now he is saying, if Fortress won't help them, then I will.

[Adelante]

20. It looks like Edwards didn't divest in time

Because while the WSJ found 34 foreclosures, it was already known in May that foreclosing was happening and Edwards knew it. So my question is why, why, why does go after subprimes knowing full well he's clipping coupons on those profits? He sets himself up for these attacks again and again.

[jsamuel]

22. Well, whatever happened, he is doing what is right now by taking personal responsibility

and pledging to help those who are hurting. I am sure we will see what he is going to do soon.

[Adelante]

27. Eh, I can't argue with you, jsamuel

You're too nice and try to see the good in everything. I'll shut up :pals:

[Cameron27]

23. It doesn't look good jsamuel.

The fact that he didn't follow up on this himself and had to learn about it from the WSJ doesn't look good.

[jsamuel]

24. Like I said, he is going to help these people out personally.

We will see what he is going to do soon.

[Cameron27]

25. That's fine, but since he didn't divest his investments in May,

and didn't get back to Fortress about his request, he really doesn't have any other choice if he wants to have any credibility left. We'll see where the story leads.

[karynnj]

66. So it's ok if they are foreclosing on people elsewhere?

I know NO when through hell, but the individual families losing homes throughout the country are being hit very hard as well. In today's NYT, I found it gets worse - if you lose your home through a foreclosure and the amount the bank gets for it is less than the mortgage, you will be taxed on the difference as if it were unearned income.
http://www.nytimes.com/2007/08/20/business/20taxes.html?_r=1&ref=business&oref=slogin

This likely is something Congress could address. It seems that the taxcode that treats this as income further hits a person who already is financially devastated. (Also in the first example the insuarance company itself buying the house for $1, inflates that "gift" unrealistically.

[jefferson_dem]

21. Whatever the facts are...since "image is everything"...

Edwards is hurtin' really bad right about now.

[huskerlaw]

26. Once again, walking the walk

Very nice.

Hey John... :yourock:

[trayted]

28. Old news. John Edwards didn't "run" Fortress Investments, and can not be expect to know

everything that the hedge fund's managers did.

Does anyone in here know "everything" that their employer does?

This person here clearly agrees with me.

John Edwards profits from others' misfortune, but is he to blame?

Posted Aug 17th 2007 12:00PM by Kevin Kelly
Filed under: Scandals, Politics, Presidential elections

A fascinating article appears on the cover of today's Wall Street Journal discussing the actions of a fund in which politician John Edwards is a large investor. Although I'm not a big John Edwards fan, I need to come to his defense on this issue -- it's simply too low of a blow.

The WSJ criticizes Edwards for the actions of fund managers within Fortress Investment Group (NYSE: FIG), seemingly asserting that Edwards is a hypocrite. Why? Because Fortress profited from people's misfortunes in the subprime collapse while Edwards has discussed his negative opinion of "predatory lenders" in the public eye.

Although the Journal does a great job backing its claims, I believe that Edwards wasn't the least bit hypocritical in this situation. Fortress is such a humongous company ($7 billion+ market cap, huge base of assets under management, etc.) that Edwards can't be expected to know and understand all of the doings within the company simply because he's an investor and former employee of the company.

Interestingly, Edwards replied to the Journal by promising to "cleanse" his portfolio of such holdings. If he had been aware of these activities with his dollars I'd believe he would've tried to justify the actions in some way.

As funds and companies become increasingly complex and harder to track, I'm sure moral and ethical issues will continue to arise. However, before one rushes to a judgment, it's imperative to try and put yourself in the investor's shoes.

http://www.bloggingstocks.com/2007/08/17/john-edwards-profits-from-others-misfortune-but-is-he-to-blam/

It's common sense. This is a non-story, and John Edwards should have simply said, that he didn't have any more of a clue everything that Fortress was doing as any other employee in the country knows everything that their employer does.

[Cameron27]

29. No, he's not expected to know everything about Fortress,

but before he decided to work for them, he should have at least checked to see if they were involved two big issues that he was railing against: off shore tax shelters, and subprime predatory lending practices.

[trayted]

37. How many people knew every thing about their employer before they were hired? Any hands?

So, which investment firm would have been more "honorable" than Fortress? If this is the best that the meme-stream media can hit Fortress & Edwards with, then Fortress must have been a good choice for Edwards, even though I'm sure they'll find something else to stretch.

Give me a poll.

Who do you like the least:

Fortress Investments Group
Goldman Sachs

Not much discussion in the media about why "Business loves Hillary" so much.

[tammywammy]

41. If you're running for or planning to run for President

You sure as heck should check this stuff off. He knew as soon as 2004 was over that he was running in 2008. He should have checked this out.

[trayted]

43. Now apply that to every candidate, and let's go through their business involvements, starting with

the Clintons and all of the "deals" that they have had over the last few decades. Get real.

[tammywammy]

44. Sure, there have been plenty of news stories on the Clinton's business dealings

That's fine, I don't like any candidate that says one thing and doesn't mean it. Edwards was aware of this back in May, he should have divested then.

[trayted]

48. Maybe he was thinking about it, lol. You do realize it's only been "3 months," instead of 3 years?

I'm sure John Edwards hasn't had much else to do over the last 3 months, running for President and all. :sarcasm:

What we do know is he came out in favor of raising taxes on hedge funds. We do know that the media has already run multiple stories over the past 3 months stating how much Edwards had invested in Fortress. Do you think he may have been planning to divest, or do you just believe that since this is the first time "you" have heard about his plans to divest, that it all of a sudden just spontaneously generated for you?

Talk about trying to knit a scandal out of barbwire, or maybe I should say "nitpick a scandal out of nothing."

[frylock]

46. yeah -- no shoot..

the personality cults on this board never cease to amaze me. One excuse after the next.

[KittyWampus]

55. He joined Fortress TO LEARN ABOUT IT. He knew what kind of investments Fortress does

and put millions of his own money in anyway.

[rinsd]

30. Except Edwards was aware of this stuff in May (see upthread)

[trayted]

31. Like I said, May = Old news. This issue was dissected earlier this year. It was only dug up

because he's about to go down to New Orleans with Mary Landreau, and the meme-stream media "senses" that he's gaining a little traction.

The Washington Post put out a hit piece on Edwards, Fortress, and subprime loans earlier in the year, and someone on one of the sites, I think Dailykos, corrected the record on that issue. Whether it was Katrina or wherever the location was is irrelevant. The "issue" of subprime loans, Edwards, and Fortress is old news, that's already been discussed.

The meme-stream media must be running out of fake Edwards scandals to fabricate.

But I guess it's hard for them to run out of something when the Clinton campaign has more than enough dirt on all of the candidates -- having access to all of that information especially back in the day gives you advantages -- and more than enough loyalists in the meme-stream media to get out smears without showing its hand.

[rinsd]

32. What is old news? It just was reported in May.

Now that its been reported again(all of 3 months later) obviously embarrassing Edwards enough to divest.

[trayted]

34. First of all, John Edwards can be naive at times, and brush things off. Secondly, it's old news

because it was reported and discussed in May, three months ago. Since the meme-stream media feels the need to dig up an old fake scandal and act like it's new just because Fortress had some dealings in New Orleans, that still doesn't change the fact that Fortress' "subprime lending" operations were discussed months ago.

It's old news. John Edwards also returned $3,000 that was given to him by people who either used to be or are registered DC lobbyists. Him divesting is consistent with returning any money this year that could be considered dirty. It's pretty easy to embarrass John Edwards. Embarrassing someone proves nothing.

[rinsd]

35. That's your defense of your candidate!?!? That he's naive in how to respond to anything!?!?

:wow:

[trayted]

39. No, it's an observation. John Edwards can be naive. Hillary Clinton lies. I make observations.

[paulk]

68. here's an observation

LOL!

[Cameron27]

36. Yes, I know about May, but I was talking

his not fully questioning them about those 2 specific issues: off-shore tax shelters, and subprime predatory lending practices before he accepted the job in 2005.

[rinsd]

38. WaPo Says Edwards claims he did.

"At the time of his hiring, he said, he sought assurance that Fortress was not involved in predatory lending, union-busting or dismantling companies. His work, he said, involved giving the firm insight into Washington and observing trends he saw while traveling the country. Some months found him at the firm's New York offices for several days, and other months he would not go at all, he said."

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/10/AR2007051002277_2.html

[Cameron27]

40. Oh, I missed that, thanks.

Maybe he really is naive :rofl:

[karynnj]

67. Some job

"Some months found him at the firm's New York offices for several days, and other months he would not go at all, he said." For $400,000 + sounds great. For a man with no experience in that type of work.

[trayted]

42. Should Enron employees, many of whom probably know more about economics than John Edwards,

Hillary Clinton, or Barack Obama, have asked Enron "specifically" about whether it was involved in fraudulent financial reporting?

First of all, I don't know every discussion that John Edwards had with them, and I don't know every Investment Group that he looked at, but odds are 1) they didn't tell him anymore than they felt like he needed to know, and 2) no investment group has a spotless record.

Why should John Edwards have questioned Fortress about those "two" specific issues? Because those are the ones "we" are talking about "now"? Talk about hindsight. I suppose if Fortress was investing in companies that were supporting warlords around diamond mines, that you would have also said that he should have asked them about that "specific" issue back in 2005.

[Cameron27]

45. Hedge funds are NOT ordinary investment funds,

they're known for these kinds of practices, as a matter of fact, there were discussions about how this could hurt him, here and at KOS at the time this was announced. He's not stupid, or 'naive' and he must have known enough about hedge funds in general to choose to work for one. Hedge funds stink, they practice cutting corners for the very wealthy, and add very little to the economic health of the country.

[trayted]

50. So, since you agree that it's an old issue, why play along with the idea that it's "new"?

[Cameron27]

51. The NOLA foreclosures aren't old,

whether he knew about them in May or not, this particular part of the story is just coming out.

[KittyWampus]

56. because the collapse of the sub-prime lending market brings the subject up again

and Edwards is too stupid to have dealt with this months ago.

[trayted]

59. Already addressed. He can easily say he's been busy. Three months is not a long time, you know?

Of course you do, but you would rather lose 2008 with someone else.

[rinsd]

64. Now he's too busy with his campaign to help people?

Jeez you sure you're FOR Edwards?

[Adelante]

69. Better than naive, no?

:rofl:

Anyways, the poster is under the ground.

[rinsd]

71. No sense beating the err...umm....dead horse then I guess

:hi:

[frylock]

47. get back to us when enron employees are running for president

[trayted]

49. Don't need to. Logic is logic. No one knows everything that their employer does, and Fortress is

larger than many employers. Like I said, you all are trying to nitpick a scandal out of nothing.

I suppose we could waste time talking about Obama's partners back in Illinois or all of the business deals that the Clintons were crucified over, if you would rather ignore "logic" and focus on the lame, instead.

Were the Clintons responsible for every suspect thing done by people they did business with? I say, "no."

[DU GrovelBot]

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[dansolo]

54. How much profit has he earned from that fund?

He has already earned a lot of money off the backs of the victims of Katrina. That money is tainted. I would like to see Edwards take all the money that he has earned from that fund and donate it. Anything else, and this is just a meaningless gesture.

There is another troubling thing about this. How could Edwards get half a million dollars from this company in the past year for "consulting advice", and he not be aware of what they were doing? I don't think that Edwards is being entirely honest here. These actions seemed to be a result of political calculation instead of deeply held beliefs. He shouldn't have waited until the collapse of the sub-prime lending market, and the increased scrutiny that came with that, to divest his holdings.

[cobalt1999]

57. This isn't going to go away for him.

It's not like he HAD to work for the fund as the man was already extremely wealthy. He made a boat-load more money off of it, and bailing now almost looks like he made his profit in the good times and is now getting out when things get ugly politically.

BUT, the biggest thing is the ongoing lack of judgment and attention to detail he exhibits. Anyone concerned about his lack of experience is going to be further put off by this.

I'll vote for him if he is the nominee, but what slim chances he had are further reduced.

[Mrspeeker]

58. Edwards Linked to Subprime Foreclosures

But thats all in the past right? or Edwards Says He Didn't Know About Subprime Push

Humm??

[The Count]

61. Kinda like Bush's abortions, coke and boozing. We trust him, non?

And we celebrate the fact that

once caught

, he said he won't do it anymore!

[The Count]

60. So...this is like a good thing? "Oops, I've been profiteering from NOLA poor"

But our man is learning - each campaign he becomes saintlier and saintlier! Soon he's going to even tell us about the 2004 theft! Sheesh - the stuff DU celebrates!:shrug:

[tammywammy]

63. Indeed it is

[wisteria]

70. How could he not be aware of where some of Fortress' investments were going.

This sounds like the fox that got caught in the hen house. He worked for fortress and had invested big money in them. He also received large donations from Fortress and now he claims he had no idea how some of their investment lenders were operating/ taking advantage of poor people whose dream was to own a home of their own by offering them risky sub prime mortgages. Mr. Edward's should have pulled out of Fortress years ago and addressed this matter of sub rime mortgages which are nothing more than shaking down the poor and disadvantaged. And, he says he will be a President for the people?