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|Wednesday, January 26, 2011|
By Ben Jacklet
Oregon has filed two lawsuits against the infamous subprime mortgage lender Countrywide in an attempt to recover $14 million in losses to the state's pension and worker's comp funds.
The state bought and sold Countrywide shares on behalf of the public employees retirement fund and the SAIF worker's comp investment fund during the height of the subprime madness, between 2004 and 2008. But they didn't sell quickly enough. Attorney General John Kroger and State Treasurer Ted Wheeler argue that Countrywide misled investors about the high risk of its mortgages.
The state was due to receive $500,000 as part of a national class action settlement but Kroger and Wheeler elected to reject that settlement and to file their own lawsuits. Their complaints allege that Countrywide made "numerous statements of material facts in reporting its financial results" while aggressively selling risky products for short term gain. One high risk product that brought short term gains and long term disaster was the "pay-option" adjusted rate mortgage, which led frequently to negative amortization. The longer the borrower held the loan, the more he or she owed on it.
Not surprisingly, Countrywide went down in flames during the subprime meltdown. Bank of America bought up the remains in January 2008.
At least some of the resulting mayhem could have been avoided. The Oregon complaints, filed today in Multnomah County Court, offer numerous examples of Countrywide executives expressing deep concerns about big risks internally. The company's chief risk officer directly warned his colleagues about "high expected default rates and losses." But those concerns never made it out to investors until it was too late.
Ben Jacklet is managing editor of Oregon Business.
Friday, April 04, 2014
BY ERIC FRUITS
The rapidly rising cost of higher education has left even the smartest researchers and the wonkiest of wonks wondering what’s happening and where’s all that money going. More and more, prospective students—and their families—are asking: Is college worth the cost?
Tuesday, April 01, 2014
BY APRIL STREETER | OB CONTRIBUTOR
Three years ago, PPS set out to begin to convert the 1930s-era boilers from diesel/bunker fuel to cleaner-burning natural gas. Oregon’s largest school district has realized impressive carbon dioxide emissions reductions, setting an example for public and private institutions.
Thursday, April 10, 2014
BY JESSICA RIDGWAY | OB WEB EDITOR
SEMpdx hosted a workshop this week for entrepreneurs, website developers and others interested in search engine optimization (SEO). Here are a few tips and tricks aimed at bumping up your search engine rankings.
Thursday, April 17, 2014
BY JASON NORRIS | OB BLOGGER
The “polar vortex” of 2014 seems to have finally thawed and we believe this change in weather will bring more sunshine to the U.S. economy as well.
Thursday, March 27, 2014
BY MARY SPILDE | OP-ED CONTRIBUTOR
Community college career, technical and workforce programs present an opportunity to bring business and education together as never before.
Thursday, February 27, 2014
BY ERIC FRUITS
Because they have little chance of working for someone else, today’s teens need to be entrepreneurs. But, first, we must teach our teens that entrepreneurship starts small.
Tuesday, February 25, 2014
BY BRANDON SAWYER
Sales of small businesses surged in 2013 according to the biggest Internet marketplace of such transactions, BizBuySell, increasing to 7,056 reported sales, a 24% increase over 2012, when they dropped 7%. Portland Metro sales tracked by the site grew 9% to 73, capping three years of solid growth. On top of that, Portland’s median sale price jumped 67% to $250K, versus just 13% to $180K nationally. Portland was one of just six metros tracked where the median sale price matched the median asking price, with sellers getting, on average, 92% of what they asked.
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