Subprime Mortgage Whistleblowers Warn Bigger Crash on Its Way

[Jefferson23]

Whistleblowers Richard Bowen and Michael Winston, along with UMKC's Bill Black, discuss the rampant fraud at Countrywide and Citigroup and how today's high foreclosure rates in states like Nevada could be a sign of what's to come

February 21, 2016

Bio

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

Richard Bowen was a former Business Chief Underwriter for Citigroup, where he monitored the credit quality of over $90 billion annually of purchased residential mortgage loans which were put into mortgage backed securities. Beginning in 2006, he repeatedly warned management about the potential losses and ultimately warned Citi's board of directors, requesting an outside investigation. Richard testified before the SEC, with his testimony before the Financial Crisis Inquiry Commission being nationally televised. He story has been reported by all of the major media, and his 60 Minutes story, "Prosecuting Wall Street" has been re-aired eight times.

Michael Winston had a career of distinction in executive positions for over three decades in five Fortune 100 companies across three industries. He served as global head of leadership and organization strategy at Motorola, Merrill Lynch, McDonnell Douglas, Lockheed and Countrywide, and was hailed eight times by Leadership Excellence Journal as one of the "100 Most Influential Thinkers on Leadership in the World."

Pulitzer Prize winning journalist Gretchen Morgenson of the NY Times profiled Michael Winston's courage and integrity in an article entitled, "How A Whistleblower Conquered Countrywide" and Salon Magazine's David Dayen profiled Winston's story in a piece called "Wall-Street's Greatest Enemy: The Man Who Knows Too Much."
Winston authored the recently published book World-Class Performance, endorsed by key business executives, leading academics and famed Olympians. See http://worldclassperformancebook.com/

No transcript available at this time, 20 minutes approx.

[longship]

1. I want to hear what Steve Eisman says.

He is one of the few who saw what was happening in 2008. Read The Big Short. And yup, Eisman got very wealthy by shorting the mortgage bond market. If one thinks that was about Eisman's character -- money -- one neither understood Michael Lewis' book nor Steve Eisman.

Eisman was always on our side. That he profited by that, in the end, was no comfort to him. As attested in the scene in the book when he, Vinny Daniels and Danny Moses were sitting on the steps of St. Patricks when the whole world economic system was melting down. None of them took any pride that they gained by it, least of all Eisman.

In Michael Lewis' book, Eisman is the ethical center, the one guy who is in it to change the system, the guy who would call out those who would pervert the system. He tells Lippmann after being sat next to Wing Chau, the CDO manager on the other side of Eisman's credit default swaps, "I want to short his paper." And he did. Wing Chau went broke. And Eisman took no pride in being right, given the outcome.

A great read! I have the film in my NetFlicks queue. It is due out in March. Looking forward to it.

And Steve Eisman is a hero!

[Person 2713]

2. The film is good

[Unknown Beatle]

3. What did Eisman do with the money he made?

He kept it, I suspect. Then he didn't feel that bad about it.

[longship]

4. He probably gave it to Jewish relief.

That is what he always did. And the extent that you ask that question is the extent that you do not understand Steve Eisman's character.

My best to you.

[Unknown Beatle]

5. You're right.

I'll read the book and watch the movie before I decide what he's about.

[cantbeserious]

7. The Big Short - Excellent Movie - Well Worth The Watch

eom

[cantbeserious]

6. Too Sad - Thank You For Sharing These Truths

eom

[midnight]

8. I can't believe this fraudclosure mess has not had any arrests for this crisis.

[Jefferson23]

10. My thoughts, exactly. n/t

[tk2kewl]

9. i hope hillary can get them to "cut it out" before it's too late this time