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Now I’m Beginning To Get It – The Missing Brick In The Wall

My favorite Uncle, Fighter Pilot Dick, sent me this video the other day. I was flabbergasted, which is hard to accomplish lately. I then sent it to a couple of folks for whom I hold much respect, to gain their takes. Both of them are fellow Hounds, Brian Brady and Tony Gallegos.

I thought Brian’s most cogent reply to me during a little back and forth emailing, was the following: Note: The link in Brian’s quote was added by me. It goes to the original video. The embedded video here is the same, but has some CNN commentary up front.

I know the FDIC went out of its way to issue a Press Release, denouncing the guys at Thing Big Work Small.  I know those guys fairly well (had a few beers with them at the CAMB convention this summer).  The FDIC denounced the video as “factually incorrect”, a day after it came out…then…

One West Bank, who bought the IndyMac portfolio for $1.55 Billion, earned 1.57 billion in its first year of operation.  Now Jeff, youi’re a bright guy…what kind of bank earns 100% ROI in one year?

This video explains a whole lot, though I suspect I may be late coming to this party. Considering the reply received from Tony, who said he didn’t know the details of the transaction, I’m thinkin’ maybe we’ve all been missing this particular brick in the wall.

Though CNN doesn’t bollix it up too much, the really good stuff starts around 1:45 on the video. Would love to hear your take.

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  • 7 comments

    7 Comments so far

    1. [...] reading posts on the approximately 20 blogs I subscribe to, I came across a post By Jeff Brown on Bloodhoundblog.com that made my blood boil and I am certain yours will do so also after viewing this. The video is [...]

    2. Bryan McDonald February 23rd, 2010 11:15 am

      Thank you for posting this video. I watch Think Big Work Small every now and then but missed this video about IndyMac. I am speechless! I also watched the IndyMac Video with the FDIC rebuttal, it is almost unbelievable.

    3. Mike February 23rd, 2010 11:42 am

      My take? These guys are couple of fast talkers who play loose with the facts, and go straight to emotional manipulation; “Be sure to listen closely, because this is gonna git yer blood boilin”. Are they auditioning for Fox News?

      In their short sale example, they imply the FDIC has cut a check for $195,360 to cover the banks loss and then some. According to the FDIC, they have “yet to make a single loss share payment to OneWest”. Are they lying? Give us proof if they are.

      They also imply that the taxpayers are the ones who are paying for all of this. The fact is that every dime of the DIF has come from banking fees. This could change if things get much worse, but as of now no taxpayer money has gone into the FDIC’s DIF.

    4. Dirk Cahaan February 23rd, 2010 3:22 pm

      Great video and article. This is jaw dropping information and just almost doesn’t seem possible. The housing market is in for a lot of troubles if feuds and problems like these continue to arise. Lets hope something can stop all of this madness before it gets too out of hand.

    5. Sean Purcell February 23rd, 2010 5:49 pm

      As an ardent conspiracy theorist (well… maybe not ardent, but I’ve worn my fair share of Tin Foil Hats), I have to say that Mike’s comments are almost as cogent as Brian’s. The problem here, to this point, isn’t outright theft by these people (the FDIC is self-insured and thus far there seems to be no rebuttal to the FDIC statement that no loss payouts have been made). Their IS a problem though: it’s the same Good Old Boys network we continue to see throughout this administration (and to a slightly lesser degree, the last). How does a bank buy a failed asset and generate 100% ROI? Seems to be an awful lot of sweetheart deals (re: prices) being negotiated here. Lucky for these Goldman / Fed boys they don’t have to answer to the same “arms length” transaction rules we do here in the world of residential real estate.

      The TBWS guys might be stretching their story a little, but they’re still holding up an awfully big, smelly fish for all to see.

    6. Brian Brady February 23rd, 2010 7:01 pm

      A few thoughts:

      1- Jeff left out the prior email which said “I don’t know what to believe anymore”.

      2- The FDIC seemed awfully defensive about a YouTube video made by a couple of mortgage brokers from a little town in Northern California.

      3- Certainly, One West has more assets than IndyMac bank to earn that $1.56 Billion but not much.

      4- There is nothing wrong with the “sweetheart deal” OneWest got. You have to entice scavengers with the prospect of big profits.

      5- If OneWest is opting to foreclose instead of modify loans, they are breaching the contract with the FDIC.

      I’ll say it again, I don’t know what to believe anymore.

      Mike said:

      “The fact is that every dime of the DIF has come from banking fees.”

      …which does get passed onto each consumer of every FDIC-insured bank.

    7. Tom Johnson February 23rd, 2010 9:28 pm

      The DIF is indeed funded by banking fees generated by banks which have been bailed, guaranteed and backstopped by the US Treasury in order to make them sufficiently profitable to enable payment of the DIF. Please explain, how this is not taxpayer money?

      The NAR jumped on this story to defend the deal right away. In the 2/15 Update-
      http://www.realtor.org/fedistrk.nsf/pages/wk02152010?OpenDocument#report_1_02_15_2010

      NAR was into this food fight, maybe the supply of Maker’s Mark on K Street was in jeopardy.

      Perhaps the TBWS guys are on to something.