The new new capitalism

Ex-Leaders at Countrywide Start Firm to Buy Bad Loans So, it's all good, right? Very good. “It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told [former Countrywide president] Mr. Kurland one morning last week in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished. “In fact, it’s off-the-charts good.” 'Off-the-charts' translates to 'awesome' unless you're in the business of trying to sell a CD or a book, which these guys aren't doing. It's like 'Hey, Margo, bring me those charts comparing our last quarter to the other mortgage bankers', and Margo goes 'No can do, boss, you can't even see the other guys unless I make the graph about twelve feet high'. 'Off-the-charts awesome, Margo, go buy yourself some heels'. “It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said Margo Saunders, a lawyer with the National Consumer Law Center. Whatever, Margo. I dunno, probably the Countrywide execs had trouble getting new gigs with the stuffed shirts who are still trying to stay afloat, but they haven't had any trouble raising money, and they're taking advantage of the wide-open lemonade market, buying up those bad mortgages from the zombies for pennies on the dollar, then re-financing them or foreclosing them for nickels on the dollar. “Kurland is seeking to capitalize on a situation that was a product of his own creation,” said Blair A. Nicholas, a lawyer representing retired Arkansas teachers who are also suing Mr. Kurland and other former Countrywide executives. “It is tragic and ironic. But then again, greed is a growth industry.” Which, economically, would appear to be a positive thing. All you need is a couple bottom feeders pulling in off-the-charts numbers, and before you know it, toxic assets are the hottest property in town. The Feds want somebody do this sort of work, they just didn't want these guys, but what the hey, even some homeowners are feeling the love. Just ask Margarita Laverde, proud owner of a $590,000 mortgage and a 7.25 rate that just got cut to 3.0. “I kept on asking, ‘Are you sure this is correct? Are you sure?’ ” Ms. Laverde said. Even with this reduction, PennyMac stands to make a profit of at least 50 percent, a company official said. Ms. Laverde could not care less that executives at PennyMac used to work at Countrywide. “What matters,” she said, “is that we know our house is secure and our credit is safe.” More lemonade, Margo. It's all good.