What will we find out next ?
--- In Dems2008@yahoogroups.com, Rob Harrington <Eamon1916@...> wrote:
>
> http://www.newsday.com/news/nationworld/ny-
ushill305631627mar30,0,3896712,print.story
>
> WASHINGTON - Hillary Rodham Clinton's campaign manager, Maggie
Williams, earned about $200,000 on the board of a Long Island
subprime lender that charged prepayment penalties - a practice that
Clinton, a critic of the subprime industry, now seeks to eliminate.
>
> Williams, who took over the reins of Clinton's campaign in early
February, served as a director on the board of the Woodbury-based
Delta Financial Corp. from April 2000 until the firm declared
bankruptcy in December, according to Securities and Exchange
Commission records.
>
> She was recruited by former New York City Deputy Mayor Bill
Lynch, a Delta consultant. Her assignments were to create a new code
of "best practices," and to improve the company's crisis management
operation in the wake of state and federal predatory lending probes
that resulted in a $12 million payout to borrowers.
>
> Her hiring coincided with stepped-up Delta outreach efforts in
minority communities, where the company made a large number of its
loans, an initiative that included parties for homeless children and
mortgage seminars in Brooklyn and Queens.
>
> Williams, 53, isn't the only Clinton insider who made money from
an industry the candidate has demonized. A month ago, The Wall Street
Journal reported that Clinton ally and former HUD Secretary Henry
Cisneros grossed more than $5 million in stock sales and board
compensation from Countrywide Financial, one of the nation's largest
subprime lenders.
>
> Once a poster child for predatory practices, Delta's reputation
improved substantially until it buckled, as executives avoided
adjustable-rate mortgages for fixed-rate loans, which have fewer
defaults.
>
> To boost revenue in the absence of high-profit adjustable loans,
the company charged relatively steep interest rates - 11 percent in
2007 - and levied higher-than-prime-loan closing costs.
>
> And Delta assessed penalties to borrowers who paid off before
their loans matured - a practice Clinton frequently decries on the
campaign trail.
>
> "I would eliminate the prepayment penalties that lead to such
high rates of default," Clinton said in a March 24 speech at the
University of Pennsylvania. "I would require lenders to take into
account the borrower's ability to pay property taxes and insurance
fees when deciding whether to make a loan in the first place."
>
> Subprime loans come with higher interest rates and are offered to
borrowers with poor credit. The loans soared along with the housing
boom and are an underlying cause of the current credit crisis.
>
> Williams downplayed her role at the company, saying, through an
assistant that she served only in "an advisory/oversight capacity."
>
> In a statement released through Clinton's campaign, Delta senior
vice president Marc Miller said Williams "did not have a role in the
day-to-day operations and management."
>
> Calls to Delta executives, board members and their bankruptcy
lawyer weren't returned. The company's switchboard and Web site have
been deactivated in the last few days.
>
> Williams turned down repeated requests to be interviewed, although
her assistant, Amee Patel, provided brief responses to several
written questions by e-mail.
>
> Asked if Williams shared her experiences in the industry with
Clinton, Patel responded, "She generally does not discuss her
business, board memberships or organizational affiliations with the
Senator."
>
> For her services on the board, Williams was paid around $30,000
per year plus expenses and granted at least 25,000 stock options,
according to the SEC.
>
> Records show she was able to cash in some of the options for a
profit of about $15,000 during a temporary rise in Delta's stock
price in July 2007.
>
> "She lost remaining options due to the company bankruptcy,"
Patel wrote in an e-mail.
>
> A month later, in August 2007, Delta was shaken by a sudden
contraction of the credit markets and began a first wave of layoffs.
By year's end, the company had laid off all but 50 of its 1,350
employees after bailout attempts failed and the credit crisis
deepened.
>
> Like many prominent African Americans, Williams, who served as
Hillary Clinton's top White House adviser from 1993 to 1997,
initially had high hopes subprime lending would offer homeowning
opportunities to inner-city families long stymied by discriminatory
bank practices.
>
> Speaking to Directors & Boards magazine in June 2000, Williams
said she was excited about offering Delta's home equity loans to
working families trying to move into the middle class.
>
> "There are people who miss payments and have bad credit for all
kinds of reasons," she said. "It is a very middle-American kind of
problem, although I believe it does affect poor people
disproportionately."
>
> In the article, Williams said her first tasks were building a new
communications operation and learning the ins-and-outs of subprime
lending from Hugh Miller, the company's chief executive. "Hugh was
really my teacher in all of this," she told the magazine.
>
> If Williams was impressed, others remained skeptical of Delta's
reinvention, with some watchdog groups arguing the company continued
to aggressively market high-fee loans to low-income borrowers,
driving them deeper into debt.
>
> "There was some improvement after the settlement, but they were
still the most aggressive company," said Matthew Lee, founder of the
Bronx-based Fair Finance Watch, a nonprofit that monitors inner-city
lending.
> Slainte,
> Rob Harrington
>
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