What Taxpayers Really Bailed Out With TARP
Steve Dibert, MFI-Miami
Since forming MFI-Miami five years ago, I have been bombarded with questions by the media about what caused the housing meltdown. I would give the standard canned answers that fit whatever angle of week that outlet was looking for and personally I didn’t care as long as I got to promote MFI-Miami. I kept quiet about what I felt were the true causes of the crash because I knew there was no way the major media outlets would interview me again if I stepped out of line and told the truth.
What most people don’t realize is that when the mainstream media reports on the financial crisis or the foreclosure crisis, they have to be very careful what they say and how they present something and there is a reason for it. It’s not because they may say something that is libelous or malicious, but because it may be true. This is why why we have seen virtually no coverage on the foreclosure crisis on the mainstream media. On Saturday, Max Keiser gave an interesting commentary at the beginning of his show on RT and how the journalists at CNBC are “on the air to defend the actions of the banking industry.”
The mainstream media in this country decides what stories will be published or aired based not on if a story is a legitimate news story but on the financial needs of that outlet’s parent company. The dystopian future of journalism controlled by corporate interests predicted in the 1976 movie, Network has become all too real.
What Wells Fargo Doesn’t Want You To Know
Last week, I realized I had enough of Wells Fargo’s attempt to spin bullshit into Egyptian cotton and decided it was time to speak up.
Wells Fargo spokesman Oscar Suris basically called former Wells Fargo Superstar, Beth Jacobson a liar for the testimony she gave in the Baltimore “Ghetto Loans” lawsuit against Wells Fargo when she stated, “There was always a big financial incentive to make a subprime loan wherever one could,”
Since they took TARP money in 2008, Wells Fargo has continually denied they ever wrote sub-prime loans. Anyone who worked in lending during the boom knew this was total bullshit and we would roll their eyes whenever we heard it. Now, Wells Fargo is changing their story. Last week, Suris told the Washington Post that sub-prime was only 10% of Well Fargo’s business while he was trying desperately to debunk Beth Jacobson’s testimony,
(Wells Fargo) spokesman Oscar Suris flatly denied Jacobson’s testimony. He said the bank never made “no doc” mortgages or predatory loans that kept homeowners from paying down principal. An internal review of a sample of the subprime mortgages Jacobson approved found that almost all of the borrowers would not have qualified for traditional loans. And, he said, prime-loan officers had quotas to meet as well — only a few could have made more money referring clients to Jacobson.
Her declaration proves that she violated several company policies, Suris said. According to Wells Fargo, Jacobson was more like a technical glitch than a cog in a well-oiled machine. Back then, only 10 percent of the company’s mortgage business was subprime, he said.
Sub-prime loans were a lucrative business for Wells Fargo because they reaped huge profits with little fallout by dumping these loans on the secondary market to mortgage-backed securities Trusts controlled by Lehman Brothers, Goldman Sachs, Bear-Stearns and Deutsche Bank and as anyone in the business can tell you it comprised more like 40-50% of their business. Originators were rewarded handsomely for filing their pipelines as Beth Jacobson pointed out in the Washington Post, “all-expenses-paid trips to Cancun and the Bahamas, where the likes of Aerosmith and Jimmy Buffett performed for employees…”
I can tell you that on the wholesale lending side we were also enticed with “special perks” by lenders. Both Wells Fargo and Countrywide aggresively enticed us to write large volumes of sub-prime loans. Where Wells Fargo offered their retail loan officers trips to family friendly 5-Star Caribbean resorts, the perks we received on the wholesale lending side more resembled a Hunter S. Thompson novel filled with naked women, booze and drugs.
Executives at lenders like Countrywide and Wells Fargo weren’t stupid. They knew that most mortgage brokers were men so they would hire smoking hot women as account executives in order to get our business. These women were to flirt with us and do what was needed to get business from us. In other words Wells Fargo and other lenders would pimp out their female employees to mortgage brokers and correspondent lenders. They would take us out for drinks, take us to Detroit Tiger baseball games and give us oral pleasure if needed. Basically whatever it took to get our business. I remember having great sex in my hot tub (paid for by the mortgage industry) with one of my account executives from Wells Fargo after I told her a developer friend of mine had gotten site approval to build a 300 unit development in suburban Detroit.
A Wells Fargo sponsored golf outing I attended was filled with plethora of strippers who were hired to strip naked at each hole and spread their legs displaying the “V for Victory” pose in front of you exposing their genitalia when you went to sink your putt. The hotel party after was even crazier because by now everyone was drunk or stoned and the next morning the hotel hospitality suite resembled the hotel room from the movie, The Hangover.
With Detroit’s proximity to Canada and a cheap Canadian dollar at the time, all expense paid trips to various parts of Canada for baseball, hockey games, Cuban cigars (they are legal there), booze, strippers and prostitutes (prostitution is legal in Ontario) were common. all paid for through the expense accounts of Wells Fargo account executives.
Matter of fact, I think one of my old Wells Fargo account executives may still have an outstanding arrest warrant in Ontario for an incident that happened in Jason’s Gentlemen’s Club in Windsor, Ontario involving him getting beaten up by a stripper. Apparently, he touched the dancer somewhere she didn’t like being touched and next thing I knew chairs were flying around in the Champagne Room like it was the set of Jerry Springer. Naturally, he stayed away from his boss for a few days until his black eye subsided.
Once I asked John X if he paid for this out of his own pocket and he replied, “Fuck no. Wells Fargo corporate in San Francisco pays for it. As long as I keep producing they’ll keep paying.”
I would get equally rewarded by my Countrywide account executive. She was awesome. She made sure my liquor cabinet was always well stocked thanks to Countrywide and she used to give me a bottle of Johnnie Walker Blue along with some oral pleasure on my birthday. She later got promoted and was sent to Plano, Texas.
Her replacement was a guy that looked like Jackie Gleason and he was a cheap son of a bitch and was no fun. It ended up being a dumb move by Countrywide because I stopped giving them my business. Well, it was that and the fact that Countrywide started stealing my clients on the wholesale side and giving them to their internal retail loan officers who would undercut my rates.
Screwing Over People Of Color
“Ms. Jacobson is making unfounded and opportunistic accusations that are offensive, inaccurate, and contrary to Wells Fargo’s commitment to fair, responsible and unbiased lending practices” -Wells Fargo Spokesman Oscar Suris
Oscar Suris denied Wells Fargo screwed over homeowners of African descent in Baltimore with “ghetto loans” or by the industry term, “Reverse Redlining” but what motivated his fake outrage was Beth Jacobson’s claim that Wells Fargo also sought out and recruited trusted African-Americans community leaders such as ministers to be mortgage brokers and correspondent lenders in order to get business from their congregations.
Wells Fargo understood that the cornerstone of any African-American community is the neighborhood church and they took full advantage of this. After all, who would question the integrity of Pastor Jones.
Suris can deny Wells Fargo targeted African-Americans all he wants but it did happen and it didn’t just happen in Baltimore. It appears Wells Fargo did this on a nationwide basis because I witnessed it happen in Detroit when I originated loans and MFI-Miami has also discovered evidence of “Ghetto Loans” in South Florida and Philadelphia.
Beth Jacobson also claimed that Wells Fargo also had a policy that barred Caucasian Loan Officers from going into prominently African-American communities in Maryland.
I don’t know about Maryland but I know Wells Fargo actively discouraged Caucasian Loan Officers in the suburbs of Detroit from going into African-American communities in and around the City of Detroit.
Metropolitan Detroit offered Wells Fargo one advantage that they didn’t have in Baltimore. The region is still very segregated when it comes to race. So very few white loan officers would venture into African-American communities and very few African-American homeowners would seek out white loan officers. The other advantage was the disparity of property values between Detroit and the suburbs. This made it easy for Wells Fargo to discourage loan officers from doing business in Detroit and place their own people there.
When Wells Fargo could find ministers in ghetto neighborhoods, they would coach them to dangle the dream of home ownership to members of their own congregations by telling them it was good for their community but what Wells Fargo was doing was setting these homeowners up for failure. In other words, they educated these African-American ministers just enough so they could do Wells Fargo’s bidding but not well enough so they would question Wells Fargo.
Last week Wells Fargo started seizing money from Wells Fargo account holders who criticizes their foreclosure policies on the internet like they did to Aaron Krowne at ML-Implode. So I can only imagine what they’ll do to the 85 cents I have in my Wells Fargo checking account.