Why Is Jamie Dimon Doing The Hustle With The Countrywide “Hustler”?in HPN Blog
Last week when word broke out about the U.S. Government suing Bank of America under the False Claims Act for a $1 Billion, two important issues were overlooked by the media that could very well affect the legitimacy of this case and could impact U.S. monetary policy for the next four years.
The first issue is a legal issue that could very well destroy the government’s civil complaint depending on how liberal or conservative the judge is. How can the federal government sue Bank of America under the False Claims Act which imposes liability on those who defraud the federal government, over something Countrywide did prior to Bank of America’s acquisition of Countrywide Financial?
Second, how can the federal government claim they were defrauded when the alleged actions happened prior to the taxpayer funded government take over of Fannie Mae and Freddie Mac when both companies and the federal government argued for decades that Fannie Mae and Freddie Mac were indeed private corporations. In 2003, then Treasury Secretary John Snow re-enforced this with testimony before the U.S. Senate by saying:
“We do not believe there is any government guarantee, and we go out of our way to say there is not a government guarantee…We need to be on guard against this perception. It is a perception. It is not, in our view, a reality.”
Even retiring Congressman Barney Frank, a long time cheerleader for the two GSEs insisted there were no gaurantees:
“There is no guarantee. There’s no explicit guarantee. There’s no implicit guarantee. There’s no wink-and-nod guarantee. Invest and you’re on your own. Nobody who invests in them should come looking to me for a nickel. Nor anyone else in the federal government.”
Several federal courts have ruled that both Fannie Mae and Freddie Mac are private corporations. In Oakland County, Et Al v. Federal Housing Finance Agency, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation (Case No. 11-12666), Judge Roberts of the U.S. District Court of the Eastern District of Michigan re-affirmed the September 2011 U.S. District Court of Nevada ruling determining Fannie Mae and Freddie Mac were not government agencies. She cited, Nevada v. Countrywide Home Loans, 812 F.Supp 2d 1211, 1216-18 (D.Vev. September 16, 2011).
So again, how does this complaint have any merit? It doesn’t. It’s a government shakedown of Bank of America because they know Bank of America will settle for a eight or nine figure settlement. Besides, it’s easier and more cost effective to squeeze the money out of Bank of America then it is to prosecute former Countrywide Financial CEO Angelo Mozilo who is probably hiding out on the beaches of Uruguay drinking Mojitos.
At the heart of the lawsuit was the process nicknamed “The Hustle” by Countrywide executives. The Hustle was designed to fast track the underwriting and processing of loans without any check points in order to boost volume and revenue. The other issue that no one seems to be discussing is why the former Chief Operating Officer of Countrywide’s Full Spectrum Lending Unit, who masterminded the creation and the implementation “The Hustle” is now a Managing Director and Home Lending Executive at JPMorgan Chase.
That’s right, MFI-Miami informants inside JPMorgan Chase have confirmed Rebecca Mairone, the mastermind behind “The Hustle” left Bank of America in March 2012 to become a Managing Director at Chase Home Finance. Although her profile on the website, LinkedIn states “Home Lending Executive Managing Director JPMorgan Chase”
Mairone along with Greg Lumsden, who was President of Countrywide’s Lending division are the only two former Countrywide executives mentioned in the U.S. lawsuit against Bank of America for allegedly ignoring warnings about the firm’s defective loan origination and underwriting process.
The million dollar question is why would Jamie Dimon allow this woman to be hired knowing this lawsuit was coming and thus jeopardize his chances of becoming either the next Secretary of the U.S. Treasury or Chairman of the Federal Reserve. Rumors about this suit have been floating around since the government since President Obama was sworn in as President in 2009 and it’s preparation has been an open secret for over the past year. So how Jamie Dimon and his cohorts at JPmorgan Chase were ignorant of Rebecca Mairone’s involvement defies logic. Besides, anyone with any basic knowledge of how Washington works knows that when the federal government prepares lawsuits like this, it’s like that old joke about mating elephants, “Getting things done around here is like mating elephants! It takes a great deal of screaming and roaring and it takes two years to produce results!”
Original author: Steve Dibert