CRL in the News
New York Times: On the “Once Trusted” Mortgage Pioneers
12/25/08
At the center of the controversy is an exotic but popular mortgage the Sandlers pioneered that helped generate billions of dollars of revenue at their bank. Known as an option ARM — and named “Pick-A-Pay” by World Savings — it is now seen by an array of housing analysts and regulators as the Typhoid Mary of the mortgage industry.
While Mr. Sandler supported the center’s antipredatory goals, he disagreed with Mr. Eakes’s position on prepayment penalties and sought to change his mind. Mr. Eakes says the Sandlers convinced him to drop his opposition to prepayment penalties.
National Review: On the very people who “destroyed the American credit system”
11/17/08
The problem is that Golden West, then the nation's second-largest savings-and-loan, had specialized in adjustable-rate mortgages--and it "had been lending to people with weaker credit scores in places where housing prices are in decline, such as California and Florida,"
Topping all these groups, however, is the Center for Responsible Lending. Through the middle of last year, the Sandler Foundation had given nearly $20 million to the CRL, whose idea of "responsible lending" does not include loans that make economic sense for banks and their investors…
"These are the very people who have destroyed the American credit system," says Jerry Bowyer, the chief economist at BenchMark Financial Network.
The Capital Research Center on Self Help’s only real interest… Itself.
10/05
It’s unfortunate that the real victims of Self-Help’s campaigns are those Eakes claims to help: the poor and disadvantaged... It should come as little shock that Eakes exploits the vagueness of the term. Indeed, the CRL’s website leaves one with the distinct impression that predatory lending is whatever Martin Eakes says it is.
CRL Attacks Florida Competitors Without Understanding the Law
10/03/08
The CRL Report inaccurately reflects referenced information in state regulatory program reports published by Veritec that are based on millions of actual loan transactions. "For example, the CRL Report implies that Florida borrowers are 'trapped' into renewing an initial loan 8 times each year. This is absolutely wrong and reflects a misunderstanding of Florida law," according to Mr. Reinheimer. "Florida law prohibits multiple outstanding loans or loan renewals and requires a 24-hour waiting period between loans.
Confabulum Blog: On the Center for Shady Lending
01/09/09
According to Philanthropy Action, the servcies of CRL "are targeted specifically to the poor and charge extremely high interest rates on small amounts of money distributed in times of need. In essence, they are geared toward people with limited options, and often result in further accrual of debt and downward spiraling into poverty."
Herbert Sandler isn’t the only big-ticket CRL donor to score big from the subprime mortgage mess. As a new profile in Condé Nast Portfolio points out, CRL also received a $15 million donation from billion-dollar hedge fund manager John Paulson — the man who reaped the largest windfall in Wall Street history by betting against the subprime market.
Funny thing: While CRL has been rallying against certain kinds of lenders, the group’s leaders didn’t find it necessary to comment on their funders’ own illicit mortgage practices. That “responsible lending” tag loses credibility when the soapbox attacks on others come from an enormous glass mansion — funded by subprime pick-a-pay snakeoil lenders.
The Deceiver.com Blog on why the Sandlers really are “People Who Should Be Shot”
01/05/08
Here’s the Deceiver-worthy part: While Herbert Sandler is ripping off the poor, he’s giving gajillions of dollars to nonprofit groups that crusade against just this sort of thing. One of them is the Center for Responsible Lending, which he and his wife helped found.
Responsible Lending. Responsible Lending. Responsible Lending. If you say it enough times, it loses all meaning. Maybe that’s how Sandler did it too…Maybe the point is that if he funds them, he controls them. So they can criticize everybody buthim.
Conde Nast profiles CRL Funder: the “Man Who Made Too Much” from the Financial Crisis
01/07/09
Paulson got wind of the coming storm in the credit markets through the infallible barometer of prices. By 2005, the amount of money he could make on the riskiest securities was not enough to justify the risk he was taking. Pricing, in his view, made no sense. Paulson concluded that he could do better on the short side—wagering that prices of risky securities would fall.
“We felt that housing was in a bubble; housing prices had appreciated too much and were likely to come down,” he says. “We couldn’t short a house, so we focused on mortgages.” He began taking short positions in securities that he believed would collapse along with the housing market.
The best opportunities were in the junkiest portion of the housing market: subprime. Pricing of subprime securities “was absurd,” Paulson says. “It didn’t make sense.” Subprime securities graded triple-B—in other words, those that the credit-rating agencies thought were just a tad better than junk—were trading for only one percentage point over risk-free Treasury bills. This absurdity appealed to Paulson as easy money.
The end result of {CRL’s proposed} assistance may be to prolong the problems in the subprime market by extending the opportunity for borrowers to borrow to the point of default.
The Center for Consumer Freedom on
10/23/07
A hedge fund that made money betting against the subprime market has quietly joined interest groups lobbying to rescue homeowners from foreclosure — a trend more investment firms could follow.
One of the central themes that I’ve written about extensively over the course of the past few years here at HousingWire is that the current mess isn’t the result of any one single group — there are, of course, now no less than 25 books out there that you can buy that provide some detail on these sort of claims. But the one group that has clearly been given a free hall pass, at least thus far, are consumer advocacy organizations.
Politico on CRL receiving a $15 million contribution from a hedge fund sponsor
10/23/07
A hedge fund that made money betting against the subprime market has quietly joined interest groups lobbying to rescue homeowners from foreclosure — a trend more investment firms could follow.
Paulson & Co. Inc., a $20 billion New York investment firm, solidified its support for change by making a $15 million contribution this month to a consumer advocacy group lobbying to amend the Bankruptcy Code to benefit the delinquent borrowers.
The group, the Center for Responsible Lending, said the donation would be used to provide legal aid to people in danger of losing their homes.
The center is also a key supporter of pending legislation that would allow homeowners to reduce mortgage payments on their homes by declaring Chapter 13 bankruptcy, a change it says could save an estimated 600,000 people from foreclosure in the next two years.