Sunday, December 21, 2008
How a good bank goes bad.
From McClatchy:
In front of a ballroom full of N.C. bankers in January 2006, Wachovia chief executive Ken Thompson warned of the dangers of “toxic” home loans.And those who created the pile of crap known as Golden West got a huge payout from their sale and Ken Thompson enjoyed 2 years of bloated salary and bonus for his sharp deal and now lives in Florida with his unearned bonuses. Rick Rothacker writing in the Charlotte Observer shows just how unearned thsat salary and bonuses were.
A problem with so-called option adjustable-rate mortgages, he told the group, was that homeowners can end up owing more at the end of the month than the beginning, which can be a “tough situation” for customers and lenders.
“I have literally been amazed at the terms offered by some mortgage lenders, thankfully not at Wachovia and thankfully not so much in North Carolina,” he said.
Four months later in May 2006, Thompson took a $24 billion plunge into the mortgage business by buying Oakland, Calif.-based Golden West Financial. Its specialty? The same loans he had cautioned against: option ARMs.
Subscribe to Posts [Atom]
Post a Comment