October 26, 2013

NYT: Countrywide subprime exec not guilty by reason of being a woman

Not guilty by reason
of femaleness.
The government finally managed to hold liable a mortgage executive this week (although in a civil, not a criminal, case). But, the executive turned out to be a woman (and a single mother to boot), so the NYT feels bad about the government's victory.
Bank’s Midlevel Executive Becomes a New Face of the Housing Crisis 
BY LANDON THOMAS JR.
Fuld. Cayne. Mozilo. Mairone? 
More than five years after the housing bust, the roll call of banking executives who have been blamed by the public for the crisis has grown ever longer. But when it comes to top managers who have been hit with a jury verdict for pushing dubious mortgages, the list is small indeed. 
The new name added this week was Rebecca S. Mairone, a midlevel executive at Bank of America’s Countrywide mortgage unit, who was held liable by a federal jury in Manhattan for having saddled the housing giants Fannie Mae and Freddie Mac with bad mortgages that resulted in over $1 billion in losses. 
And while the jury verdict in the civil fraud case on Wednesday was hailed by Preet Bharara, the hard-charging United States attorney who has become the scourge of white-collar criminals on Wall Street, Ms. Mairone seems — on the face of it — the most unlikely of culprits to emerge from the housing debacle.  
The government’s lawsuit essentially contends that the ramped-up mortgage initiative that she oversaw put pressure on mortgage underwriters to originate riskier yet more profitable housing loans. Via a program nicknamed the Hustle, derived from the initials for “high speed swim lane,” Countrywide’s mortgage processors were “incentivized to, and repeatedly did, manipulate borrower information” like borrower income and other information so that the loans would qualify for federal mortgage guarantees, prosecutors said in their original lawsuit.

Look, I absolutely agree that it's ridiculous that the feds haven't won any cases against major mortgage executives for their activities before August 2007, but you can see why this case was easier: She ran Countrywide's Hustle program from August 2007 to April 2008. That's key, because the subprime bubble, which had been in big trouble since February 2007, definitely burst around August 1, 2007. I remember it well although I can't give you the exact day because I went away on a camping trip in late July 2007 and came back four days later in early August, turned on the computer, and ... oh, boy ... batten down the hatches, we're headed for rough weather.

So, Mairone was flogging an obviously already dead horse to squeeze out the last bit of profit from by scraping through the bottom of the ... well, this metaphor is out of control, but you get the point. The quality of lenders had been dropping spectacularly year after year. But by August 2007 when everybody knew the game was up, the only possible borrowers left were ...
Ms. Mairone’s lawyers claim that she had no such ambition and that she has become a prominent scapegoat — paying the price for being a successful, suffer-no-fools female executive trying to effect change in an insular, predominantly male corporate banking culture. 
... As her lawyers tell it, Ms. Mairone, a 46-year-old single mother, regularly worked 12-hour days and was on the road a week out of every month. When she could, she sneaked out of the office to take her now 14-year-old daughter to a Girl Scouts event or her son, now 19, to a karate tournament. 
Some executives — especially other women — liked her, depositions show. 
Others did not. One in particular, Edward O’Donnell, a mortgage executive whom Ms. Mairone passed over for a promotion, stands out in this regard. 
It would be Mr. O’Donnell who would bring the case to the government. In the wake of the jury’s decision, he is expected to earn a $1.6 million whistle-blower reward after the case is resolved.

Whistleblower = Good
Male Whistleblower = Probably a lying backstabber pretending to be good
It is unclear yet what penalties Ms. Mairone will face, as they will be set by the presiding judge at a later date.
In court depositions, however, female Countrywide employees expressed admiration for Ms. Mairone’s take-charge ways. In their view, Ms. Mairone’s stylish dress and demeanor, along with her business acumen, were just what was needed to shake up the backslapping boys’ club of bankers that sold mortgages nationwide.

Oh boy ...

While I can understand the New York Times' argument that she must be innocent by reason of not being a man, let me point out that by the same logic, she must be guilty by reason of being white.

It's a conundrum ...

19 comments:

elvisd said...

Hefty manjaw.

Anonymous said...

I'm still trying to understand why Franklin Raines isn't wearing an orange jump suit. I could be wrong, but I think if the people who looted Fannie and Freddie in the 90s had gone to prison, it might have had a chilling effect.

Cail Corishev said...

I'm not surprised that her female coworkers cited her "stylish dress" as a primary reason for backing her. I'm a little surprised the NYT would let that slip into the story, though.

I guess when you feel like you're in charge of everyone else's words, you don't have to watch your own.

Anonymous said...

I have always felt that Aril Glaspie, (US ambassador to Iraq pre Gulf War 1), was unfairly let off the hook because she is a woman.
Famously she told Saddam that the USA had 'no opinion' over an invasion of Kuwait by Iraq. Of course, nopthing could be further from the truth.

Not trying to rub it in, for the sake of nstiness, think of all the negativity that arguably flowed from Gulf War 1, (perhaps Twin Towers, Afghan invasion, economic crisis etc etc), and waht could have been avoided if a sager ambassador held that position.

Bill said...


Anonymous said . . .

I have always felt that Aril Glaspie, (US ambassador to Iraq pre Gulf War 1), was unfairly let off the hook because she is a woman.
Famously she told Saddam that the USA had 'no opinion' over an invasion of Kuwait by Iraq. Of course, nopthing could be further from the truth.


You could react to this the way you do, pointing it out as one of life's great mysteries. Or, you could react to it the way I do: observing that the fact that she wasn't punished is evidence (though not proof) that she was following her boss's instructions rather than ad libbing.

Anonymous said...

I've noticed( I have no credentials) that women get top jobs in an organization just before a collapse ensues.
Either they are the straw,or millstone, that breaks the company's back or it is a principle built into life that the girls' prominence guarantee the doom of an enterprise, no matter how venerable the organization is.
Cue Janet Yellen.

Anonymous said...

Male Whistleblower = Probably a lying backstabber pretending to be good

I think you have that slightly wrong:

Male Whistleblower who blows the whistle on a female executive = Probably a lying backstabber pretending to be good.

Big Bill said...

Don't buy that "Preet Bharata, hard-charging Manhattan Federal Prosecutor" stuff.

He/she is employed to spend tons of money doing discovery, identifying as many crimes as he/she can, and then entering into cheap financial settlements with the Bankstas that:

(1) immunize the corporations and their leadership from future prosecution for those specific crimes, and

(2) immunize them from OTHER crimes that might be constructed out of the same transactions and occurrences.

The Bankstas know that Preet will agree to a settlement in which (1) no one goes to jail, (2) they only have to pay pennies on the dollar, and (perhaps best of all) (3) no one else can come after them later.

They LOVE it when they have a pretend fight with Preet!

Anonymous said...

Ha, ha! So, the NYT touts that she had, " . . stylish dress and demeanor."?? And this is part of the reason she was well-liked and successful (and possibly innocient)???

The NYT -- so sexists, so hypocritical!

Mr. Anon said...

"Anonymous said...

I have always felt that Aril Glaspie, (US ambassador to Iraq pre Gulf War 1), was unfairly let off the hook because she is a woman.

Famously she told Saddam that the USA had 'no opinion' over an invasion of Kuwait by Iraq. Of course, nopthing could be further from the truth."

She claimed that her instructions came directly from James Baker, and that it long been American policy that the Iraq/Kuwait dispute was none of our business.

Anonymous said...

Would she have been treated so deferentially if she were ugly?

Kaleberg said...

It's actually a sign of progress. Now a woman can be one of the protected good old boys. Granted, she had to stand trial, unlike the rest of the criminals, but at least she got off just as if she were a man.

E. Rekshun said...

SS: "...she must be innocent by reason of not being a man, let me point out that by the same logic, she must be guilty by reason of being white."

Race trumps gender.

14 y/o daughter, 19 y/o son. Hhhmmm, two different fathers?

At least she was a stylish dresser.

Anonymous said...

"The quality of lenders had been dropping spectacularly year after year."

Don't you mean the quality of borrowers had been dropping?

Anonymous said...

It seems to me that the NYT was just repeating the argument of the lawyer. Sailer is really good at seeing what he wants to see regarding media bias.

Eluy said...

Steve, what made you think the Housing Bubble had quietly burst around August 1st 2007?

Harry Baldwin said...

I've noticed . . . that women get top jobs in an organization just before a collapse ensues.

I've noticed that blacks get the top leadership position in a nation just before a collapse ensues.

Anonymous said...

"Would she have been treated so deferentially if she were ugly?"

Dude... but she is ugly.

whistlin' in the wind said...

Plenty of female whistleblowers have been put through hell. It's just that you are not going to hear about them unless the stuff they're whistling about is approved for public consumption. Karen Silkwood is a good example. Catherine Austin Fitts only survived in good measure because of her wealth and shrewdness. Plenty of female whistleblowers have gone down in flames. But in some circumstances they may do better, because they are often minorities in the environments they're working in, and no one wants to be seen persecuting "minorities." That changes as the environment changes. Being female is no protection for a whistleblower unless the MSM wants to use her as a holier than thou story that makes them look like good whistleblowers too.