It wasn’t “The Power of Barney Frank” after all.

30 Dec 2008 09:07 pm
Posted by: Donna

It was “The Power of Yes”.  That was the slogan of WaMu a few years ago, when they were going gangbusters writing sketchy mortgages to unqualified borrowers.  The sordid saga is related in this NYT article, but some conservatives will still not let go of the blame-Democrats-and-poor-people fable they’ve constructed to explain how this mess cannot be the fault of Trickle Down bubblenomics, rampant deregulation, and greedheads looking to make a quick buck. 

Whatever.

During Mr. Killinger’s tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers’ incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.

WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.

Imagine that. I’m sure we’ll soon learn that Democratic legislators, aided and abetted by ACORN, under the auspices of the Community Reinvestment Act, coerced WaMu to engage in those risky loans.  Any minute now. 

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