Group names 25 lenders responsible for economic meltdown

[Breaking News Breaking News]

[size="2"]Raw Story [/size][size="2"]
Thursday, May 7, 2009[/size]

[size="2"]US and foreign banks were not unwitting victims of circumstance but deliberately culpable in the financial meltdown that engulfed the United States last year, a campaign group said Wednesday.[/size]

[size="2"]The Center for Public Integrity named 25 “subprime” mortgage companies whose risky lending was blamed for the US property market collapse and the subsequent global economic crisis.[/size]

[size="2"]Many of the lenders were either controlled by US and European banks, or could not have indulged in their high-risk lending spree without the connivance of banks, the investigative journalism group said in a new study.[/size]

“[size="2"]The mega-banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves,” the center’s executive director Bill Buzenberg said.[/size]

“[size="2"]These banks were deliberate enablers that bankrolled the type of lending that’s now threatening the financial system,” he said.[/size]

[size="2"]The study was released as the US House of Representatives was set Wednesday to vote on a Senate-approved bill that would set up a 9/11-style inquiry into the root causes of the financial crisis.[/size]

[size="2"]The center said it analyzed US government data on nearly 7.2 million “high-interest” or subprime loans made from 2005 to 2007, when the real estate bubble was at its peak.[/size]

[size="2"]It said the “Subprime 25″ accounted for nearly one trillion US dollars or about 72 percent of industry-reported loans extended to risky borrowers who would not normally have qualified for a mortgage.[/size]

[size="2"]At least 21 of the 25 were financed by banks that received US government bailout money, and 11 of them have made hefty payments to settle prosecution claims of widespread lending abuses, it said.[/size]

[size="2"]Four of them have received bailout funds, including collapsed insurer American International Group and banking behemoth Citigroup. Other banks named included Britain’s HSBC and Barclays Bank.[/size]

[size="2"]Top of the list with at least 97.2 billion US dollars in subprime loans was Countrywide Financial, which was bought by Bank of America last year to avert bankruptcy for the giant mortgage company.[/size]

[size="2"]Second with 80.6 billion US dollars in loans was Ameriquest Mortgage, now part of the Citigroup family. Third with 75.9 billion was New Century Financial Corp, which went bust in 2007 and now faces a federal investigation.[/size]

“[size="2"]The center found that US and European investment banks invested enormous sums in subprime lending due to unceasing demand for high-yield, high-risk bonds backed by home mortgages,” the study said.[/size]

“[size="2"]The banks made huge profits while their executives collected handsome bonuses until the bottom fell out of the real estate market.”[/size]

[size="2"]The list of lenders (via Business Week) is:[/size]
[size="2"]1. Countrywide Financial[/size]
[size="2"]At least $97.2 billion[/size]
[size="2"]2. Ameriquest Mortgage/ACC Capital Holdings[/size]
[size="2"]At least $80.6 billion[/size]
[size="2"]3. New Century Financial[/size]
[size="2"]At least $75.9 billion[/size]
[size="2"]4. First Franklin/National City/Merrill Lynch[/size]
[size="2"]At least $68 billion[/size]
[size="2"]5. Long Beach Mortgage/Washington Mutual[/size]
[size="2"]At least $65.2 billion[/size]
[size="2"]6. Option One Mortgage/H&R Block[/size]
[size="2"]At least $64.7 billion[/size]
[size="2"]7. Fremont Investment & Loan/Fremont General[/size]
[size="2"]At least $61.7 billion[/size]
[size="2"]8. Wells Fargo Financial/Wells Fargo[/size]
[size="2"]At least $51.8 billion[/size]
[size="2"]9. HSBC Finance/HSBC Holdings[/size]
[size="2"]At least $50.3 billion*[/size]
[size="2"]10. WMC Mortgage/General Electric[/size]
[size="2"]At least $49.6 billion[/size]
[size="2"]11. BNC Mortgage/Lehman Brothers[/size]
[size="2"]At least $47.6 billion*[/size]
[size="2"]12. Chase Home Finance/JPMorgan Chase[/size]
[size="2"]At least $30 billion[/size]
[size="2"]13. Accredited Home Lenders/Lone Star Funds V[/size]
[size="2"]At least $29.0 billion[/size]
[size="2"]14. IndyMac Bancorp[/size]
[size="2"]At least $26.4 billion[/size]
[size="2"]15. CitiFinancial/Citigroup[/size]
[size="2"]At least $26.3 billion[/size]
[size="2"]16. EquiFirst/Regions Financial/Barclays Bank[/size]
[size="2"]At least $24.4 billion[/size]
[size="2"]17. Encore Credit/ECC Capital/Bear Stearns[/size]
[size="2"]At least $22.3 billion[/size]
[size="2"]18. American General Finance/American International Group[/size][size="2"] (AIG)[/size]
[size="2"]At least $21.8 billion*[/size]
[size="2"]19. Wachovia[/size]
[size="2"]At least $17.6 billion[/size]
[size="2"]20. GMAC/Cerberus Capital Management[/size]
[size="2"]At least $17.2 billion*[/size]
[size="2"]21. NovaStar Financial[/size]
[size="2"]At least $16 billion[/size]
[size="2"]22. American Home Mortgage Investment[/size]
[size="2"]At least $15.3 billion[/size]
[size="2"]23. GreenPoint Mortgage Funding/Capital One Financial[/size]
[size="2"]At least $13.1 billion[/size]
[size="2"]24. ResMAE Mortgage/Citadel Investment Group[/size]
[size="2"]At least $13 billion[/size]
[size="2"]25. Aegis Mortgage/Cerberus Capital Management[/size]
[size="2"]At least $11.5 billion[/size]
[size="2"]*Totals include subsidiaries[/size]
[size="2"]The Center for Public Integrity has more on its study here.[/size]
[size="2"]
http://www.prisonplanet.com/group-names-...tdown.html[/size]