Subprime lenders set to collect $21b
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STEVE CHIOTAKIS: Loan companies that helped fuel the so-called subprime mortgage craze are in line to collect more than $ 21 billion in taxpayer money.
That’s according to a report today from the Center for Public Integrity. From Washington, Marketplace’s Steve Henn has more.
Steve Henn: The Home Affordable Modification Program set aside $50 billion for borrowers and banks — with the hopes of preventing up to 4 million foreclosures. The idea is to pay mortgage servicers incentives to modify subprime loans.
So far results have been mixed. Treasury officials say a little over a quarter of a million loans have been changed.
But the firms cashing in include a subprime subsidiary of AIG and two companies that were accused by federal regulators of using illegal collection practices. Bill Buzenberg runs the Center for Public Integrity.
Bill Buzenberg: Most of the money goes in fact to the same companies that created the subprime lending mess in the first place.
Countrywide, which was the nation’s largest subprime lender, stands to earn more than $5 billion. JPMorgan Chase, Wells Fargo, American Home Mortgage and Citibank all could rake in more than $1 billion apiece.
In Washington, I’m Steve Henn for Marketplace.
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