rant · moment 11 of 13
The Countrywide Commercial and No-Doc Mortgage Insanity
from Tim Dillon Is Going To Hell Premieres on GaS Digital · #1
Audio-only archive episode — no video to seek.
7 minTim and Ray dissect an old Countrywide mortgage commercial bragging about approving unqualified borrowers, then break down stated-income and no-doc loans, explaining how the mortgage industry gamed the Community Reinvestment Act and inflated everyone's approvals during the housing bubble.
- 47:00Countrywide was one of the biggest and most famous cons in financial history, featured in The Big Short.
- 47:28A Countrywide commercial identifies three people who were denied loans elsewhere, then approved by Countrywide.
- 48:26Tim's version: Countrywide fabricates W-2s on a computer and doesn't care because they'll sell the debt to the government.
- 49:00Self-employed business owners with hard-to-document income were a key part of the lending crisis.
- 49:48You could state your own income in no-doc loans with zero verification.
- 50:29No-doc loans required nothing: no W-2s, no 1099s, just a license and the bank hands you money.
- 50:52Banks lowered standards to qualify people who shouldn't have been homebuyers, partly due to Community Reinvestment Act pressure.
- 52:01No-doc loans carried higher interest rates, so lenders made more money on riskier borrowers.
- 52:34Tim recalls calling borrowers whose Escalade payments exceeded their stated monthly income, then approving them anyway.
- 52:48The mortgage bubble will happen again and should happen again.
CountrywideBill ClintonCommunity Reinvestment Actmortgage industry