The State: A subprime lender with ties to Edwards has moved to foreclose on more than 130 SC homes

[flpoljunkie]

Posted on Sun, Sep. 09, 2007

Ties to lender may cost Edwards
Company’s subprime loans, home foreclosures trouble supporters

By AARON GOULD SHEININ
[email protected]

A subprime lender with ties to Democratic presidential hopeful John Edwards has moved to foreclose on more than 130 homes in South Carolina since the S.C. native went to work for its parent company, an analysis of courthouse records shows.

The lender, Green Tree Financial, also was once the subject of a $30 million class-action verdict involving thousands of South Carolinians.

<>From October 2005 through 2006, Edwards worked for Fortress Investment Group, a hedge fund. Its subprime lending subsidiaries, Green Tree Financial and Nationstar, foreclosed on 34 homes owned by victims of Hurricane Katrina, The Wall Street Journal reported in August.

<>Edwards’ campaign spokeswoman Teresa Wells told The State last week any lender that uses deceptive practices, hidden fees and abusive terms “are predatory, and (Edwards) opposes these shameful lending practices that compromise our economic security as a nation and hurt working families.” She said Edwards never “invested a dime with Green Tree, never worked for Green Tree and had nothing to do with its operation.”

http://www.thestate.com/news/v-print/story/168046.html

[Inspired]

1. That is really stretching it, don't you think? n/t

[flpoljunkie]

2. What's most interesting is this is a very long article in a very influential SC newspaper

[DURHAM D]

4. I am not supporting Edwards

but that is an unfortunate article in an important newspaper. Too bad really.

[msongs]

3. so, where is the direct connection to edwards and bogus activities? nt

[flpoljunkie]

7. Apparently none, other than Green Tree is a subsidiary of Fortress Investments Group.

[JDPriestly]

5. The article is very vague about just what Edwards' tie to

Green Tree is. Green Tree doesn't just make sub-prime loans. They do a lot of lending. This article raises issues, but doesn't fully provide facts. It just says there is some relationship between Green Tree and Fortress. It does not state that there was really any tie between Green Tree and Edwards. I personally have money in a money market fund that had an interest in Countrywide (bonds I think but not sure). That does not mean much. Edwards may have had absolutely no say in whether Fortress dealt with Green Tree. More information is needed. This looks like a smear piece. It is particularly suspect because it goes into all the "scandal" about Edwards' hair. Disgusting. Inappropriate on DU. Why was this propaganda posted here? It deserves no further attention. Let Edwards respond and ignore it.

[Inspired]

6. It looks like they did respond but for some reason

the response was ignored.

[cascadiance]

18. My sister works for Countrywide, and had to lay a bunch of people off a week ago...

... and I know she HATED doing it.

The mortgage marketplace is very complicated now. Are all of those involved guilty in "predatory loan" practices? Hardly! But we really do need regulation to draw the lines of what is acceptable and what is not, or that line is going to continue to be crossed by companies looking to bend it for profit.

This article smells like PURE smear on Edwards!

[karynnj]

22. I think it is somewhere between your case and the impression the

article hopes to give.

Edwards has over $10 million invested with Fortress. He also earned nearly half a million dollars working for Fortress - a few days a month in some months and not at all in others. He said he took the position to learn about poverty.

[Seabiscuit]

32. This is nothing more than a smear piece.

It keeps reiterating "ties" between Edwards and Green Tree where absolutely none exist. Edwards had absolutely no business and absolutely no involvement nor any contact whatsoever with Green Tree.

Deplorable yellow journalism.

[Beaverhausen]

8. She said Edwards never "invested a dime with Green Tree,

from the article:

==She said Edwards never "invested a dime with Green Tree, never worked for Green Tree and had nothing to do with its operation."==

==Since then, his campaign said, Edwards has worked to increase the minimum wage in six states, started a college-for-everyone program for poor communities, helped organize thousands of workers into unions and done humanitarian work in Africa.==

==When he first joined Fortress, Edwards told the Journal last month, "I made clear that I didn't want to have anything I was investing in to be anti-labor or involved in predatory lending practices."==

==However, Clemson University political scientist Bruce Ransom is not sure Edwards should be held accountable for the activities of Fortress' subsidiaries.

"Let's face it, he's a wealthy guy, and he's got investments, and he works with the hedge fund which owned Green Tree," Ransom said. "Where do you draw the line in terms of how involved and how knowledgeable he should be about firms he may have some financial relationship with that might also own other firms that might be called into question?"==

[JDPriestly]

9. Edward found out about this Aug. 17 and is divesting his interest in these funds.

Edwards has reported $29.5 million in assets, more than half of which are invested in the hedge fund Fortress Investment Group., a company that paid him nearly half a million dollars last year for consulting advice.

Fortress has investments in lenders that offer subprime mortgages, higher priced loans for borrowers considered greater risks. The Wall Street Journal on Friday identified 34 New Orleans homeowners who face foreclosure actions from lenders connected to Fortress.

"My reaction is I'm going to help these people," Edwards said in a telephone interview. "I just learned about this. I don't know the details, I will find out and I will find a way to help them."

cut
http://www.wtop.com/?nid=213&sid=1223744

It would be irresponsible to end the investments all at once. Many people would be hurt even more if the lenders completely lose their shirts.

[Adelante]

11. Correction to "Edward found out about this Aug. 17"

It was in the Washington Post in mid-May.

Edwards said yesterday that he was unaware of the push by the firm, Fortress Investment Group, into subprime lending and that he wishes he had asked more questions before taking the job. The former senator from North Carolina said he had asked Fortress officials whether it was involved in predatory lending practices before taking the job in 2005 and was assured it was not.

-snip

Largely as a result of the rise in subprime lending and the cooling housing market, home foreclosure filings rose to 1.2 million in 2006, an increase of 42 percent. At the same time, the drop in value of subprime lenders has presented a buying opportunity for investors such as Fortress.

Fortress hired Edwards as an adviser in October 2005, nearly a year after his losing campaign as Democratic vice presidential candidate. At the time, it owned a major stake in Green Tree Servicing LLC, which rose to prominence in the 1990s selling subprime loans to mobile-home owners and now services subprime loans originated by others.

-snip

Fortress’s growing role in the subprime lending market provides a second contrast between the firm’s business practices and the positions Edwards has taken as the presidential candidate who has made poverty a major campaign theme. The Washington Post reported last month that Fortress’s partners and its foreign investors benefited from the kind of offshore tax breaks Edwards has criticized as a candidate.

-snip

Subprime loans have been particularly prevalent in New Orleans, which Edwards has made a focal point of his campaign. He formally announced his bid in a Katrina-ravaged neighborhood there and returned for a visit last week.

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/10/AR2007051002277.html

[The Count]

16. And we don't know if he divested in August either. He "promised" - which,

coming from Edwards means very little.
The correct action - back in May - would have been to take all the profit from Green Tree and donate it to wherever he wants US to donate. Until then - talk is cheap.

[txaslftist]

19. This is why I'm voting for Ron Paul.

Watching the spectacle of a good man like John Edwards being torn down by the partisans of other Democratic candidates over this kind of bullshit makes me sick of Democratic Party power politics. Almost as sick as watching party leaders throw the antiwar crowd under the bus on the issue of Iraq and Iran.

Hell, I might as well have voted for GOP candidates. The only difference in policy has been a few entertaining sideshows like Gonzales.

[The Count]

29. Ron Paul? he's against separation of church & state, hate crime laws and generally

batshit crazy... There are some better candidates on this side of the aisle. Unless someone I really like jumps in the race, I am voting Gravel or DK.

[Clark2008]

25. Bad things are bad...

Bahahahahahahahaha!

:rofl:

[1932]

35. Haven't I read somewhere that Edwards donates over a third of his income to charity?

[JDPriestly]

24. As you can see, the article I found is dated Aug. 17.

[Adelante]

28. However, Edwards knew about in May

Hence the correction.

[sandnsea]

10. Rich people aren't accountable for their money

I guess only poor people who lie their way into mortgages and spoil it for the rest are accountable for their money, or lack of it.

[txaslftist]

12. I own shares in half a dozen mutual funds.

It's the most idiotic thing in the world for someone to try to hold me responsible for the actions of some company that Calamos happens to hold shares in.

This is the kind of crap we have to put up with from the likes of Bill O'Reilly.

Sad to see it here, too.

[Lex]

13. agreed

nt

[ripple]

15. Edwards did consulting work for the lending company

I don't think his investments are necessarily at issue here.

[txaslftist]

17. Edwards did consulting work for a company that acquired the lending company.

He was never connected to it in any way.

Don't let that stop you, though.

[Adelante]

20. He has $16 Million invested in the parent company, Fortress

That's at least half his wealth and I would think a household of two lawyers would know where they are putting half their wealth. The man is running for president, for Christ's sake. He is not an ordinary citizen with a 401K.

[1932]

34. Who has more culpability here: Edwards, who worked as a consultant for and was an

investor in the investment company which invested in this company, or the president of the US who is responsible for passing laws that protect home onwers and regulate investment companies?

And who doubts that Edwards would be a better president than Bush or anyone else, for that matter, for individuals whose homes are subject to foreclosure and for middle class and working class americans who need to accumulate more wealth and to be able to protect that wealth from avaricious corporations?

[Adelante]

36. It's Congress who is responsible for passing laws

including those which "protect home owners and regulate investment companies." When Edwards sat on the Senate Banking Committee he did the precise opposite of protect the middle and working class, hand in hand with the financial services lobby, and, yes, he should be held accountable for where that has led us to the current financial fiasco. Better president than Bush no doubt, but better than anyone else? Not hardly.

[1932]

37. Can you name more than one bill that fits that characterization?

[Adelante]

39. It was a goddamned big bill, let's face it

Once again we had Edwards sitting on a key committee fighting for legislation that's led to absolutely tragic and devastating results for this country. Repealing the New Deal era protections for consumers and markets may not have caused the subprime mortgage fiasco, but certainly kept it from being prevented as when separate banks and brokerages were regulated for conflicts of interest and to protect against market collapse. We'll only begin to see the full effects next year when we're trying to win an election, but the mortgage crisis is forecasted to cost the American economy $350 billion. The banking reform bill also opened up the invasive privacy assaults on financial records we so bemoan and gave us the biggest and baddest corporate entities imaginable.

But yes to your question, I would add the China trade bill, which even Jesse Helms had the good sense to oppose, and which may even outdo NAFTA, in the end, for doing harm to American labor and the rest of the world's markets and workers.

[1932]

40. It's funny that you picked China trade -- Edwards had a better record on trade bills than Kooch

and Gephardt. He had a lower CATO free trade rating than both of them, China trade vote notwithstanding.

So, he clearly isn't helping the banks on trade issues.

So, can't think of any other bank-friendly bills.

You just have one bankruptcy bill and a totally spurious argument about free trade?

I distinctly remember an article about Edwards in '03 in which a banking lobbyist said that Edwards never returned his calls. This was in a NC paper and was meant to be a hit on Edwards because banking is the state's biggest industry.

[Adelante]

41. I was talking about the banking reform bill

Which you seem to want to avoid.

Frontline did a good documentary on it in case you don't know about it.

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

At the time, Edwards was known as a "Citibank Democrat" and as one of the "Mercantile 8" along with Chuck Schumer and six Republicans - here's why.

Citigroup: The standard in political corruption

Citigroup played the lead role in ushering the “Financial Services Modernization Act” through the US Congress, in the process joining with the rest of the financial services industry to set a new standard in legalized bribery. The Act will tear down the regulatory walls between banks, and insurance companies and securities firms, paving the way for a massive concentration of financial wealth and a future of industry bailouts, weakening the Community Reinvestment Act and permitting huge intrusions on consumer privacy.

Mother Jones 1/4/00
http://www.motherjones.com/news/feature/2000/01/fotc16.html

“Several weeks after testifying to two subcommittees of the Senate Banking Committee, Fed Governor Laurence Meyer received a letter from eight senators admonishing the Fed for its stance on merchant banking and demanding a more lenient approach.

But only the Merchant Banking Eight have so wholeheartedly aligned themselves with the grievances of Chase, Wells Fargo and the largest financial conglomerates.

Dear Governor Meyer,

On behalf of the Securities and Financial Institutions Subcommittees of the Senate Committee on Banking Housing and Urban Affairs, thank you for appearing as a witness on June 13 to discuss the Board’s Interim and Proposed regulations concerning merchant banking activities.

Your testimony was helpful in clarifying your intent to consider carefully the views of members of Congress, the financial services industry and other interested parties concerning your proposed regulations. Your assurances that the Board’s goal is to encourage Financial Holding companies (FHCs), bank holding companies and banks to engage in innovative and progressive private equity investment activities while preserving the safety and soundness of the financial services system is welcome….”

MERCHANT BANKING EIGHT
Jack Reed (D-RI)
Charles Schumer (D-NY)
Mike Crapo (R-ID)
Robert Bennett (R-UT)
Rod Grams (R-MN)
Jim Bunning (R-KY)
Chuck Hagel (R-NE)
John Edwards (D-NC)

Financial Markets Center Alert 10/3/00
http://www.fmcenter.org/atf/cf/%7BDFBB2772-F5C5-4DFE-B310-D82A61944339%7D/sept00.pdf

This is just one of those things for me, like the IWR, mountaintop mining, etc., where Edwards reinvents himself and people like you assist.

I'll leave you to it, because you'll just keep moving the goal post and I'm busy right now :hi:

[1932]

45. Your bottom link shows financial industry contributions to the "8" -- Edwards is lowest, and has no

contributions from Chase or Wells Fargo. And he's never taken PAC money ever, so the financial services industry money he did get is from employees.

So what's his incentive?

Banking is the biggest industry in NC.

So, perhaps, he really felt that he was helping NC workers with this bill? And, since banking industry lobbyists said he was unreachable, and since he gets such high ratings on issues ranging on fair trade and labor issues, and all the important issues to me, I really don't see a better democrat running...

[ripple]

21. My apologies. He worked as a consultant for the hedge fund

that the lending companies were subsidiaries of.

I haven't passed judgment on this issue, so I don't know what you mean by "don't let that stop you".

We don't know what sort of consulting Edwards specifically provided, so there really is no way of knowing what, if any, role he might have played in the unethical lending practices mentioned. For that reason, I don't see this as a big deal when taken at face value.

[draft_mario_cuomo]

30. What a difference 24 hours make... nt

[karynnj]

23. Did they also hire you and pay you nearly a half million dollars?

How did he work for them at all and not learn what they did with hedge funds and subprime lenders? his involvement was not just passive.

[ChiciB1]

26. My Roll-Over Of A 401K Is Handled By Morgan Stanley & The Things

I've heard about them make my blood boil! I WOULD take it all out, but I then would have to pay a penalty. As it is, we are taking money out slowly, still I pay a fee each time to the broker, and also because it was tax-deferred we have to watch that we don't remove so much that it will put us into a different tax bracket! Not that I'm rich or anything, just that my husband is retired and is getting SS, and I'm on Disability. I've heard of people getting Disability for several different problems, I wonder if it's true. I have two right now that would qualify!

I know Edwards can afford to pay the fees, but this is just an example of things that happen. I don't KNOW who Morgan Stanley deals with because I'm not that savvy and it's complicated. I'm sure my money is being used for things I would really really dislike!

[txaslftist]

27. If I wanted to be a "morally responsible" investor, I don't think I could

invest in anything. Certainly not a mutual fund. I'd be stuck buying gold and profiting, no doubt, from slave labor in Chinese or South African gold mines.

As for a lawyer advising clients, I'm a criminal defense attorney. I've represented stone cold killers and given them the best advice I know how. You don't judge the character of an advisor by the character of his clients.

This is one of the things that sickened me about John Kerry. He said he stopped taking criminal cases because he couldn't bring himself to defend people he knew were guilty.

Christ did, but of course, that's a different story. We can't all hang out with sinners, thieves, publicans and tax collectors. We'd soil our skirts.

[karynnj]

44. Kerry said he knew they needed to be defended, he just did not want to do it

I see nothing with wrong with the fact that he clearly far preferred his time as a prosecutor to the time where he made far more money as a trial attorney. He clearly found it more satisfying personally to work as a public servant - as a prosecutor, who set up one of the earliest victims support centers, a lt governor, and Senator. He had the right to determine how to use the skills and talents he has.

[bagrman]

14. Undoubtably some of YOU have money in funds were making money from,

these sub-primes, having been packaged and repackaged to be sold to retirement funds and other legitimate funds. So when times are good and your making money off the ignorant masses it's good but the pendulum swings the other way, and the dumbing down of America rears it's ugly head, and these foolish loans start to hurt people then out come the crying towels and the finger pointing. Save it.

[draft_mario_cuomo]

31. This newspaper also ran an editorial calling JE a "big phony" earlier this year

Where is the faux outrage from Obama fans who whined about the similar thread on Obama's hospital?

[Trajan]

33. That RAT BASTARD ! .. Now I HATE HIM !

That is what you are looking for here ... right ?

Imagine a world, for a moment, where EVERYONE, at EVERY TIME, took your word for absolute gospel, and lived without deviation with your every foible, creed and belief ....

That is one pretty fucked up world, in my book ....

A kind of Carrollian Twilight Zonish nightmare ... dont you think ?

AINT gonna start now ..... Let's end that horror show right here ...

Edwards gets my vote if he wins the Democratic party nomination ..... notwithstanding your shrill, highly biased and absolutely fallacious declamation ....

Even if he is eating sweet little babies with pitchforks ..... :sarcasm:

[PurityOfEssence]

38. Let this be a lesson: never try to help the poor, and you can get away with all sorts of things

How much are Hillary's various properties worth? How much does one of those coiffings go for? Remember that old commodities killing she made? (Don't? If she's nominated, you will...)

Imagine the stink if Elizabeth was entangled with corporate medical predators like Obama's wife.

If you don't make a big deal about the poor, you can skate on a lot of scrutiny.

That's right, folks: care less and you'll fare better.

Poverty's just bad business.

[Ethelk2044]

42. Your post is bullshit. She works for a hospital I guess all the doctors and nurses are

corporate predators too. They work for the same hospital or hospitals like the one Michelle works for.

[karynnj]

43. As you seemed to rule out all of the top three

maybe you should continue. Is there anyone running who is pure enough? (Obama's wife works for a large Chicago hospital - what's wrong with that?)

[zulchzulu]

47. "entangled with corporate medical predators"....

Wow. Desperate much?

[zulchzulu]

46. To be fair, this story is a stretch

The Edwards campaign said that he never “invested a dime with Green Tree, never worked for Green Tree and had nothing to do with its operation.”

Fortress Investment Group (where Edwards worked) has Green Tree listed as a subsidiary company. I'm not sure that Edwards' work touched Green Tree's efforts. I'm willing to give Edwards the benefit of a doubt on this.

It sure does make for a great lazy journalist hit piece though.

:thumbsdown: