Bankers Blamed for Mess Get Rich Cleaning It Up

By John Johnson,  Newser Staff
Posted Mar 3, 2009 8:23 PM CST
A Countrywide Bank Home Loans branch is seen in La Canada Flintridge, Calif., Thursday, July 24, 2008.   (AP Photo/Damian Dovarganes)
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(Newser) – The irony is, well, rich. Former executives of Countrywide Financial—the bank whose risky loans to homeowners have become synonymous with the subprime mess—are now making a mint helping the government fix things, the New York Times reports. A dozen former Countrywide executives, including President Stanford L. Kurland, have formed PennyMac, which buys up delinquent mortgages on the cheap and turns tidy profits on them.

“It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said a lawyer with the National Consumer Law Center. The Times points out that PennyMac is indeed helping struggling homeowners remain in their homes. The company gets the mortgages for so little it can afford to slash rates and still make a handsome profit. "Greed is a growth industry," said one critic.