On Sept. 15, 2008, Lehman Brothers became the largest bankruptcy filing in the history of this country. It was the first domino of many to fall, followed by the likes of Bear Stearns, Merrill Lynch ...
The Center for Public Integrity looked at how various executives at failed banks and subprime lenders have survived.
Former Lehman CEO Richard Fuld, walked away from the largest bankruptcy in history with several hundred million dollars in his pocket has homes in Connecticut, Florida, and Idaho, and he’s now running his own consulting firm, Matrix Advisors. Fuld earned about $69.5 million in 2007, the year before Lehman Brothers filed for bankruptcy in Sept. 2008. From 2000 to 2007, he was awarded about $889.5 million and cashed out about $529 million of that before the company went bankrupt.
Former Bear Stearns CEO Jimmy Cayne did make around $376 million before “retiring” after Bear Stearns lost billions on toxic mortgages. Cayne retired from his CEO position in January 2008 after the company said it lost $1.7 billion in bad home loan bets. From 2000 until his retirement in 2008, he brought home about $376.6 million. He is now retired living in the Plaza Hotel playing in online bridge tournaments. He also has apartments in New York City apartment on Park Avenue, Long Branch, New Jersey and Boca Raton, Florida.
Chuck Prince rince resigned from Citigroup in November 2007 when the company announced it lost as much as $11 billion on subprime mortgage-backed securities. His golden parachute was $28 million, on top of $65.2 million in salary and bonuses since 2000 — a total of $93.2 million.
He has two homes: one in Nantucket, Massachusetts, and another in North Palm Beach, Florida.
He’s on the boards of Xerox Corp. and Johnson & Johnson Inc.
Merrill Lynch lost $8 billion under the leadership of Stanley O’Neal. He took his $165 million golden parachute and t landed a seat on the board of Alcoa, the aluminium giants. He has a Park Avenue apartment in New York City and a home in Edgartown, Massacusetts, in Martha's Vineyard.
Ken Lewis’ desire to lead the world’s largest bank resulted in Bank of America steered through the acquisition of Countrywide and Merrill Lynch and under his due diligence, it would result in penalties, settlements, adjustments, and other costs totaling more than $40 billion for BofA. Yet he walked away with around a quarter of a billion dollars.
Stanford Kurland, Countrywide’s second in command, bailed out on Countrywide in 2006, shortly before all of its misdeeds became public knowledge, and after he reportedly cashed in $200 million worth of stock. Kurland still owns the $2 million, 9,000-square-foot house he bought in 1995 with a Countrywide loan. He’s also managed to keep a $4.9 million beachfront house in Malibu.
Top executives from the 25 biggest pre-crisis subprime lenders — including at least 14 founders or CEOs — are back in the mortgage business at mortgage companies that are less regulated than banks. Many of these lenders make loans that don’t meet the strict standards required to earn a government guarantee — loans banks have largely abandoned.
Andy Pollock was president and CEO of First Franklin, a subprime lender whose risky loans to vulnerable consumers hastened the downfall of Merrill Lynch after the Wall Street investment bank bought it in 2006 for $1.3 billion. He was still running First Franklin for Merrill in 2007 when he told Congress that the company had “a proven history as a responsible lender” employing “underwriting standards that assure the quality of the loans we originate.” The next year, federal banking regulators said First Franklin was among the lenders with the highest foreclosure rates on subprime loans in hard-hit cities. Standard & Poor’s ranked some of its loans from 2006 and 2007 among the worst in the country. Lawsuits filed by AIG and others who bought the loans quoted former First Franklin underwriters saying that the company was “fudging the numbers” and calling its loan review practices “basically criminal,” with bonuses for people who closed loans that violated its already-loose lending standards. Merrill closed First Franklin in 2008 after the subprime market imploded and demand for risky loans dried up.
Today, he’s back in business. For Pollock and his contemporaries, who have survived decades of boom and bust in the mortgage trade, the recent near-toppling of the global economy was a cyclical, temporary downturn in a business that finally is beginning to rebound. Five years after the financial crisis crested with the bankruptcy of Lehman Brothers top executives from the biggest subprime lenders are back in the game. Many are developing new loans that target borrowers with low credit scores and small down payments, pushing the limits of tighter lending standards that have prevailed since the crisis.
After First Franklin closed in 2008, Pollock remained in his five-bedroom, $2.4 million home in Monte Sereno, Calif. He led a consulting firm that became a temporary haven for at least 15 former First Franklin employees. By 2013, Pollock was co-CEO of Rushmore Loan Management Services, a company that traditionally collected payments on loans and is now originating loans. The company offers adjustable rate mortgages and down payments as low as 5 percent. A company spokeswoman said Rushmore’s loans meet government standards and that some government programs allow low down payments to encourage homeownership. Pollock is among at least 14 founders or CEOs of top subprime lenders whose post-crisis employers want to serve consumers who might not be able to qualify for bank loans.
Old habits die hard, especially when there’s no incentive to do things differently,” says Rachel Steinmetz, a senior underwriter-turned-whistleblower who worked at subprime lender GreenPoint Mortgage, later bought by Capital One, until June 2006. “The same shenanigans are going on again because the same people are controlling the industry.”
To see a list of where they are all now working and the full article see here
The Center for Public Integrity looked at how various executives at failed banks and subprime lenders have survived.
Former Lehman CEO Richard Fuld, walked away from the largest bankruptcy in history with several hundred million dollars in his pocket has homes in Connecticut, Florida, and Idaho, and he’s now running his own consulting firm, Matrix Advisors. Fuld earned about $69.5 million in 2007, the year before Lehman Brothers filed for bankruptcy in Sept. 2008. From 2000 to 2007, he was awarded about $889.5 million and cashed out about $529 million of that before the company went bankrupt.
Former Bear Stearns CEO Jimmy Cayne did make around $376 million before “retiring” after Bear Stearns lost billions on toxic mortgages. Cayne retired from his CEO position in January 2008 after the company said it lost $1.7 billion in bad home loan bets. From 2000 until his retirement in 2008, he brought home about $376.6 million. He is now retired living in the Plaza Hotel playing in online bridge tournaments. He also has apartments in New York City apartment on Park Avenue, Long Branch, New Jersey and Boca Raton, Florida.
Chuck Prince rince resigned from Citigroup in November 2007 when the company announced it lost as much as $11 billion on subprime mortgage-backed securities. His golden parachute was $28 million, on top of $65.2 million in salary and bonuses since 2000 — a total of $93.2 million.
He has two homes: one in Nantucket, Massachusetts, and another in North Palm Beach, Florida.
He’s on the boards of Xerox Corp. and Johnson & Johnson Inc.
Merrill Lynch lost $8 billion under the leadership of Stanley O’Neal. He took his $165 million golden parachute and t landed a seat on the board of Alcoa, the aluminium giants. He has a Park Avenue apartment in New York City and a home in Edgartown, Massacusetts, in Martha's Vineyard.
Ken Lewis’ desire to lead the world’s largest bank resulted in Bank of America steered through the acquisition of Countrywide and Merrill Lynch and under his due diligence, it would result in penalties, settlements, adjustments, and other costs totaling more than $40 billion for BofA. Yet he walked away with around a quarter of a billion dollars.
Stanford Kurland, Countrywide’s second in command, bailed out on Countrywide in 2006, shortly before all of its misdeeds became public knowledge, and after he reportedly cashed in $200 million worth of stock. Kurland still owns the $2 million, 9,000-square-foot house he bought in 1995 with a Countrywide loan. He’s also managed to keep a $4.9 million beachfront house in Malibu.
Top executives from the 25 biggest pre-crisis subprime lenders — including at least 14 founders or CEOs — are back in the mortgage business at mortgage companies that are less regulated than banks. Many of these lenders make loans that don’t meet the strict standards required to earn a government guarantee — loans banks have largely abandoned.
Andy Pollock was president and CEO of First Franklin, a subprime lender whose risky loans to vulnerable consumers hastened the downfall of Merrill Lynch after the Wall Street investment bank bought it in 2006 for $1.3 billion. He was still running First Franklin for Merrill in 2007 when he told Congress that the company had “a proven history as a responsible lender” employing “underwriting standards that assure the quality of the loans we originate.” The next year, federal banking regulators said First Franklin was among the lenders with the highest foreclosure rates on subprime loans in hard-hit cities. Standard & Poor’s ranked some of its loans from 2006 and 2007 among the worst in the country. Lawsuits filed by AIG and others who bought the loans quoted former First Franklin underwriters saying that the company was “fudging the numbers” and calling its loan review practices “basically criminal,” with bonuses for people who closed loans that violated its already-loose lending standards. Merrill closed First Franklin in 2008 after the subprime market imploded and demand for risky loans dried up.
Today, he’s back in business. For Pollock and his contemporaries, who have survived decades of boom and bust in the mortgage trade, the recent near-toppling of the global economy was a cyclical, temporary downturn in a business that finally is beginning to rebound. Five years after the financial crisis crested with the bankruptcy of Lehman Brothers top executives from the biggest subprime lenders are back in the game. Many are developing new loans that target borrowers with low credit scores and small down payments, pushing the limits of tighter lending standards that have prevailed since the crisis.
After First Franklin closed in 2008, Pollock remained in his five-bedroom, $2.4 million home in Monte Sereno, Calif. He led a consulting firm that became a temporary haven for at least 15 former First Franklin employees. By 2013, Pollock was co-CEO of Rushmore Loan Management Services, a company that traditionally collected payments on loans and is now originating loans. The company offers adjustable rate mortgages and down payments as low as 5 percent. A company spokeswoman said Rushmore’s loans meet government standards and that some government programs allow low down payments to encourage homeownership. Pollock is among at least 14 founders or CEOs of top subprime lenders whose post-crisis employers want to serve consumers who might not be able to qualify for bank loans.
Old habits die hard, especially when there’s no incentive to do things differently,” says Rachel Steinmetz, a senior underwriter-turned-whistleblower who worked at subprime lender GreenPoint Mortgage, later bought by Capital One, until June 2006. “The same shenanigans are going on again because the same people are controlling the industry.”
To see a list of where they are all now working and the full article see here
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