The federal government recently filed a lawsuit over a Countrywide scheme dubbed “The Hustle” that removed impediments to a mortgage approval so the company could sell as many mortgages as possible to Fannie Mae and Freddie Mac. Now comes news that a Countrywide exec who ignored warnings about the Hustle is currently running Chase’s foreclosure review initiative.
At the time The Hustle was being put into action, Rebecca Mairone was the Chief Operating Officer of Countrywide’s subprime lending division Full Spectrum Lending. She apparently stayed on with Bank of America after it acquired Countrywide and only left earlier this year.
And according to the complaint filed last month by federal prosecutors, Mairone was “repeatedly warned… that the Hustle would generate excessive quantities of fraudulent or otherwise seriously defective loans that were ineligible for sale to [Fannie and Freddie].”
Even after the Hustle began to roll out and internal quality reviews allegedly showed that “the quality of the loans originated under the Hustle was exceptionally poor,” the complaint says that Mairone and FSL President Greg Lumsden “ignored this information, continued on with the Hustle as planned, and restricted dissemination of the quality reviews.”
Now Mairone has moved on to Chase, where sources tell Pro Publica she was put in charge of the Independent Foreclosure Review folks.
The review process, announced in late 2011 in the wake of the robosigning scandal that called a number of foreclosures into question, is intended to sort through the mass of foreclosures at the nation’s largest mortgage servicers to find out if borrowers’ loans were given the proper review.
Oh, the irony of taking an executive who looked the other way while her company removed every speed bump, road block, and toll gate to approving a mortgage, and putting her in position to review whether all the proper procedures were followed during the foreclosure process.
Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, doesn’t hold back about his feelings on the matter to ProPublica:
“Finding out that the person running it for JPMorgan Chase is a person whose conduct in the run-up to financial crisis was allegedly so egregious that she somehow managed to be one of the only people actually named in a case brought by the Department of Justice goes beyond irony… It speaks volumes to the banks’ true intent and lack of concern for homeowners when addressing the harm that they caused during the foreclosure crisis.”
Chase would only confirm that Mairone, who is not a defendant in the federal lawsuit, is working on the foreclosure review process, but would not comment on her involvement in the Hustle at Countrywide.