It's interesting that the FOR SALE sign on the lawn in the picture STILL reads, "no money down" - one can only conclude the joy ride for predatory lenders is not over.
The name of COUNTRYWIDE FINANCIAL pops up again and again when mtg crisis problems are discussed - regardless of the community/state. COUNTRYWIDE announced after yesterday's closing bell that they are cutting 20% of their workforce - approx 12,000 people.
October 31, 2007 -- THE Securities & Exchange Commission is looking into whether Goldman Sachs cheated its way to enormous profits - even as the rest of the financial industry was suffering through a massive downturn.
The central issue, as best I can determine, is whether Goldman had any insight that other firms didn't have during the May and June period when subprime mortgage securities were deteriorating in value.
In June, brokerage firm Bear Stearns was one of the first firms to shock Wall Street when two of its hedge funds reported massive losses on risky mortgage loans.
Since then a number of other investment firms have reported similarly dismal results.
The bad news culminating in the last two weeks with a massive $8 billion write-off by Merrill Lynch that led to the ouster of its chairman, Stanley O'Neal.
One person who discussed the matter with the SEC says the investigator seemed curious as to whether the investment banking side of Goldman's business could have tipped off the trading side of that brokerage firm to the extent of the problems that would soon be encountered by Bear and others.
And there also seemed to be a philosophical discussion as to whether that would constitute insider trading even if there was such a leak. The SEC doesn't comment on any investigation it might be undertaking. My sense is that the SEC's interest is preliminary.
If someone had known the scope of the subprime mortgage mess ahead of time he could have profited handsomely.
During a second quarter that saw most of Wall Street take it on the chin, Goldman scored an 88 percent jump in profits to $2.85 billion.
By comparison, Lehman Brothers' earnings were down 2 percent, Morgan Stanley's profits fell 8 percent and Bear Stearns' net was off 62 percent.
In its quarterly financial statement Goldman said "significant losses in non-prime loans and securities were more than offset by gains on short mortgage positions."
In other words, Goldman made some very lucky trades to avoid the fate of the others.
The same person who spoke with the SEC's New York office said the commission also seemed interested in the relationship between Goldman and The President's Working Group on Financial Markets.
People who follow the actions of The Working Group, which is nicknamed the Plunge Protection Team, assume that it was the organization that rallied the banking industry behind a recent plan to rescue banks endangered by the subprime mess.
They also assume that much of what The Working Group accomplishes is done through Goldman, where Treasury Secretary Hank Paulson had been chairman before heading Treasury.
Paulson is the former chairman of Goldman Sachs, as was Robert Rubin, another former Treasury secretary who is currently a highly paid executive with Citigroup.
Citigroup also had problems with subprime lending that's gone bad.
Goldman didn't return my telephone call asking for a response.
john.crudele@nypost.com
Copyright 2007 NYP Holdings, Inc. (emphasis added)
HUD to give Cleveland $16 million, Cuyahoga County $11 million to deal with abandoned, foreclosed homes
U.S. money to help rehab, raze homes
Stephen Koff and Gabriel Baird Plain Dealer Reporters Saturday, September 27, 2008
Washington- Ohio will get more than $258 million, the fourth most of any state, to stabilize neighborhoods by selling, renovating or demolishing abandoned, foreclosed houses, federal authorities announced Friday.
The Department of Housing and Urban Development hopes the money, which includes $16.1 million for Cleveland and $11.2 million more for Cuyahoga County, will help neighborhoods hit hard by the foreclosure crisis. Cities or agencies can use the money to buy abandoned homes, renovate them, demolish them or create "land banks" for other development.
They also can use the money to help low- and moderate-income buyers acquire foreclosed homes.
Cleveland says the program is inadequate, considering the city's needs. HUD lists the city's foreclosure rate at 12.7 percent.
"We welcome this money, and we're going to use it wisely, but it needs to be part of a long-term commitment by the federal government," said Chris Warren, Mayor Frank Jackson's chief of regional development.
He said the $3.9 billion national program pales in comparison with the $700 billion that Congress and the White House are considering for a Wall Street bailout.
The one-time payout will not be enough to fix the problem left by the foreclosure crisis, Warren said, adding that Jackson has called on the federal government to make this sort of commitment for each of the next five years.
Jackson's administration expects to allocate the federal money to its existing two-pronged approach to the foreclosure crisis: either fixing up or tearing down foreclosed structures.
The money, approved as part of a large and controversial foreclosure bill this year, was targeted to cities that have not only a high number of foreclosed houses, but also a large amount of abandoned property. HUD's formula included foreclosure rates, the number of subprime mortgages in a market, and data used by the Postal Service to track abandoned addresses.
Florida got the most money, at $541 million, followed by California with $530 million and Michigan with $263.5 million.
Of Ohio's $258 million, a statewide program will get the largest portion, $116.8 million. Besides Cleveland and Cuyahoga County, other Northeast Ohio communities that qualify are Akron ($8.5 million); Elyria ($2.4 million); Euclid ($2.5 million); Lorain ($3 million); and Lake ($3.4 million) and Summit ($3.7 million) counties, according to lists distributed by U.S. Sens. Sherrod Brown and George Voinovich.
To reach these Plain Dealer Reporters: skoff@plaind.com, 216-999-4212 gbaird@plaind.com, 216-999-5833
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