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I've just heard today that those three, IndyMac, C'Wide and New Century have been issued subpoenas as the subject of a federal grand jury investigation. The Justice Department was focusing primarily on smaller operators thought to be defrauding homeowners and mortgage lenders . . . as if there could have been a coordinated effort across the country large enough to create the mess we're in. . . Now they've decided that it was fraud on the part of large sub prime lenders. According to Los Angeles Times, they have asked for e-mails, phone bills, financial records and other information. The Times said this is part of an investigation into whether fraud and other crimes contributed to the mortgage crisis.
I find this stuff small time compared to the creation of the programs that required a heartbeat and a signature to get a loan, but I'm just a loan officer . . . They didn't need fraud to lose money on those programs! There were such minimal requirements for loans an enterprising 12 year old could have made them work.
You already know about Countrywide and Angelo Mozilo, with the "friends of Angelo" mortgage program . . . interesting that the only "friends of Angelo" that we know about are politicians . . . who probably can't repay the favor for him now . . . too much daylight shining on their relationships . . . and you probably know by now that Countrywide is being sued in Illinois, Florida and California. I'm sure Cuomo will jump in there soon. After his win with Fannie Mae, he couldprobably take on any lender and win.
Countrywide and all its memories will fade though, except maybe for Angelo and anyone else who actually attends a trial. BOA bought it, and they'll swallow it whole. . . they're already changing the names of the divisions to "Anything But Countrywide".
I was surprised to hear that a court-appointed examiner has determined that New Century was involved in inappropriate accounting practices that inflated its profit and gave top executives the ability to acquire millions of dollars in undeserved or inflated bonuses. I guess I was surprised that I had not heard it sooner . . . I'm certainly not surprised at the charges.
They were not a lender that I sold loans to . . . they were quick to change program details, interest rates, etc, at the closing table and they only had to embarrass me once for me to take them completely off my list of possibilities. They filed Chapter 11 in April of 07 . . . and I felt almost the same way when I heard that news as I did when I heard Greenpoint had "bitten the dust." (What goes around comes around doesn't it? Couldn't have happened to anyone who deserved it more.)
The FBI is up to 21 cases against corporate and other large companies relative to subprime market defaults. They've inferred they want brokers, lenders, and now securities firms, hedge fund operators and credit rating agencies. The Securities and Exchange Commission (SEC) is reportedly working closely with the fibbies to find and charge anyone who may have contributed to the credit crises . . .but because of deregulation they're struggling with making criminal cases about the subprime debacle.
I've recently thought of two youtube videos I think I'd like to make . . . Bear Stearns indictees, set to the tune of Dirty Laundry, by Don Henley
You may listen to it in the next post
In the days where one only hears about the credit crisis and lack of liquidity, people are stymied on where to turn to finance their latest projects. While the reality is there has been a huge change in residential financing (probably for the better, and probably forever!) commercial lending programs have not been affected as much, although lately commercial lenders are finding it harder to sell their paper because of lack of liquidity in the market in general.
As it is harder to get the money to get projects off the ground, we’ve tried to stay ahead of the curve and maintain as many options for our borrowers as possible. While there are still straightforward choices like SBA loans and commercial loans for expansion, purchases and refinances, and Church loans based on tithing, we’ve found there are other forms of financing that aren’t as complicated or time consuming and for the most part also aren’t as costly as traditional financing.
I’ve added stockloans from Hedgelender to my portfolio of products and capital advances against credit cards.
The beauty of both programs is they are not based on applications, financial statements, tax returns or credit criteria. And they both fund VERY quickly.
Stock Loans can be used for any number of things, and can be made through a myriad of choices. Here are some highlights:
Finance your real estate with interest-only repayment while still retaining participation in your stock portfolio;
Refinance your MARGIN LOAN to remove the possibility of a call;
Expand Your Business with interest-only repayment while still retaining participation in your stock portfolio;
Diversity Your Investments while retaining beneficial ownership of your portfolio;
Roll your Employee Stock Options into cash while continuing to participate in your stock.
Ironically, these loans run to the millions and sometimes tens of millions, and take 1/10th the time to process and fund. And, they are strictly based on the worth of the stock and the amount of shares traded; the ONLY collateral is the stock and . . . credit is NOT a criteria. Neither is purpose, as long as it is legal!
Capital Advances against credit cards is NOT a loan program - but is a purchase of future sales.
Like the stock loan, there is NO long application, financial statement requirement OR tax return requirement; Funds immediately based on credit card sales; factors ALL credit cards receivables - Visa, Mastercard, American Express and Discover.
Clients are using the money for expansion and renovation; Marketing and Advertising; purchase of new locations; Increases to inventory; purchasing much needed equipment Repairs and upgrades; buying out an existing partner; recapture of investment capital; even to pay bills and taxes.
Finer explanations and details are listed on my website PallasFinancier.Com.
Brad Inman is founder and publisher of Inman News.
In the afternath of the news about fannie mae, freddie mac and the NEW IndyMac FEDERAL BANK, Brad Inman made ten predictions about the collapse of the secondary housing market.
"...Those that do lend will revert to back-to-basics underwriting: perfect credit, large down payments, proof of income, personal character and good family upbringing.
"...Housing industry lobbyists will make the mortgage liquidity problem their number one policy issue in the next two years. They will argue that the sky is falling and it is.
"...Like so many parts of our American culture, the accessibility to unlimited and poorly scrutinized debt helped turn Americans into a sloppy group of consumers, which spawned greedy Wall Streeters, out of control lenders and starry-eyed investors."
Read all ten, and the rest of his article at Imagine housing without a secondary market
Former Refco chief executive Phillip R. Bennett, was sentenced to 16 years in federal prison after pleading guilty to 20 crimes, including securities fraud.
District Judge Naomi Reice Buchwald lambasted Bennett, and others: "You and others like you play a truly high-stakes poker game."
White-collar defendants are often staggeringly arrogant, and just don't think they'll get caught."
Refco, at the time the biggest independent U.S. futures trader, led by Bennett did a $670 million initial public offering in August 2005 AND filed for bankruptcy two months later.
Apparently, Bennett controlled a company who owed Refco more than $400 million as he was using that company to conceal his investor's losses.
His sentence is set to begin 9/4/08; and he goes home to Britain via deportation when he gets out.
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And so the mighty fall . . .
Staggering Arrogance??
July 6 2008 Update to Bear Stearns indictments
So, Justice Carries a Swift Sword? We'll See - Curiously, a poster named "Anonymous", says "the sub-prime mess . . . has plenty of people who deserve fines and jail time . . . BUT these guys are not the scapegoats we need."
Well, gee, they thought up the hedge funds, created them, bought the mortgage backed securities, and then (!) CIOFFI was charged with insider trading for moving TWO MILLION DOLLARS OF HIS MONEY out of the fund . . . leaving institutional investors in the fund with no warning . . . when they knew the fund was in danger.
They may not be the scapegoats we NEED, but it certainly appears they need to be in front of a judge for the way they ran the funds!
The U.S. Attorney's Office for the Eastern District of New York handed down indictments for Ralph Cioffi and Matthew Tannin formerly with Bear Stearns. You may or may not recognize them as the brains (if you will forgive me) behind the Bear Stearns High Grade Structured Credit Strategies Fund (begun in 2003) and the Bear Stearns High Grade Structured Credit Strategies Enhanced Fund (begun in 2006), both of which failed miserably earlier this year.
From the US Attorney's Office (Eastern District of New York) Press Release "... The indictment alleges that by March 2007, the defendants believed that the Funds were in grave condition and at risk of collapse.
However, rather than alerting the Funds’ investors and creditors to the bleak prospects of the Funds and facilitating an orderly wind-down, the defendants made misrepresentations to stave off withdrawal of investor funds and increased margin calls from creditors in the ultimately futile hope that the Funds’ prospects would improve and that the defendants’ incomes and reputations would remain intact. " (italics all mine)
"... The subsequent collapse of the Funds during the summer of 2007 resulted in losses to investors totaling more than $1 billion."
CIOFFI was also charged with insider trading, as I understand it, for moving TWO MILLION DOLLARS OF HIS OWN MONEY out of the fund and into another.
Probably one that didn't fail, doncha guess?
Attorneys for the men maintain their innocence . . . Well, would they get paid otherwise?
Read the Press Release in its entirety here
I understand the FBI is investigating 19 other companies who were originating and securitizing sub-prime loans for accounting fraud, insider trading, and the failure to disclose true valuations.
Lovely
July 6 2008 Update to Bear Stearns indictments
So, Justice Carries a Swift Sword? We'll See - Curiously, a poster named "Anonymous", says the sub-prime mess . . . has plenty of people who deserve fines and jail time . . . BUT these guys are not the scapegoats we need."
Well, gee, they thought up the hedge funds, created them, bought the mortgage backed securities, and then (!) CIOFFI was charged with insider trading for moving TWO MILLION DOLLARS OF HIS MONEY out of the fund . . . leaving institutional investors in the fund with no warning . . . when they knew the fund was in danger.
They may not be the scapegoats we NEED, but it certainly appears they need to be in front of a judge for the way they ran that fund!
Billed as social networking with a bite (pun intended I suppose) the Black Widow Network is designed to send real estate investment deals direct to your in-box . . .
Other websites designed to take advantage of REOs and the possibility of making money off them are
If you're looking for deals - try them out -
I've finally located three lenders that will work with Foreign Nationals. So I'm taking those applications again --
Requirements include:
That's all I've got for today . . . pax et bonum
...
In Jim Cramer's Mad Money lightening round on Friday June 27 he said, "In the end, people aren't spending… they are on the Interstate and you just don't feel rich anymore when you're on the Interstate, unless you're driving a Mini Cooper."
Meet DB, my mini-cooper . . .
I don't feel rich on the Interstate, but I'm not bleeding money for gas anymore. I went from $95 a week for the truck I was driving to about $40 every other week. The savings almost equals the car payment AND it is a kick to drive!
I've just learned that I'm now an authorized agent for Hedge Lender. They have programs for Stock Loans and an amazing customer service approach. Highlights are
John Shareholder owns a farm with a 10% interest note that collateralized by all of his equipment and most of his other farm assets. He needs expansion capital and owns 100,000 shares of the stock XYZ worth $10 a share, but he expects good news this year that will boost the stock's price and doesn't want to liquidate.
Solution: With a HedgeLoan® @ 6.99% interest fixed, he can refinance the farm, get the capital to grow the business and remove the liens from all other assets. If his favorite stock goes up, he can participate in the upside, and if it goes down, he can exercise his right to default on the loan (with no reporting to credit bureaus) and the collateral stocks acting as full satisfaction of the HedgeLoan obligation.
A publicly trading company needs to raise $1,000,000 in capital but can't do asset-based lending and can't afford to wait for a PIPE to be completed.
Solution: Use a HedgeLoan® stock-secured loan to do an off-balance sheet financing with shareholders friendly to the issuer and gain flexibility and greater shareholder loyalty in the process.
Think of the benefits:
Quick funding – 2 weeks or less possible vs. many months with PIPE or secondary offerings. Many registration and legal costs associated with PIPE or secondary offerings are not required with a HedgeLoan® solution. Shares go (via warrants) to presumably friendly hands (current large shareholders) rather than to unknown parties.
Stay in and Out of the Market at the Same Time - with HedgeLoan® Stock Loans
I'll try to go over each of them in the next day or two – in the meantime, you can call me 
770.333.4404 or send an email 
traci@tracigregory.com if you have questions.
You may read my full Disclaimer including definition of "approved agent" .
Historically, shareholders of publicly traded companies only had two options for getting any use of the equity in their stock portfolios:
~~ they could use their stock(s) as collateral to obtain very limited bank or broker loans. Typically these loans didn't allow for a very high loan to value and normally carried full recourse terms; or.
~~ they could go to their brokerage for margin loans which would require strong credit worthiness, are limited by size or loan to value, require full recourse and would be subject to margin maintenance and house calls.
Owners of restricted stocks are very limited in options if they wish to sell or access equity using their interest in their company owned stock.
So, I've started the company 
Pallas Financier and become an Authorized Acheive Program Affiliate of HedgeLender to bring investors the very best array of products and services in the stock loan industry today.
For more information on how a non-recourse stock loan can benefit you . . .
call me
770.333.4404, or
traci@tracigregory.com
More info on the stock loan process can be found at Pallas Financier.
We are still in the mortgage business - Residential and Commercial Loans; this is, we think, a great addition to a stable that is growing smaller every day!
770) 333-4404
