A screenshot from the PennyMac website
(WXIA) -- In September, a new finance company -- PennyMac -- opened its first retail office in Pasadena, Calif. According to Fortune, the company is run almost entirely by former staffers from Countrywide Financial.
Heading up the office, Fortune says, is Stephen Brandt. A Congressional report from this summer said Brandt ran Countrywide's "Friends of Angelo" program, which handed out hundreds of "sweetheart loans" to members of Congress along with their staffs and other government employees. The "Angelo" in the program's name was Countrywide's ex-CEO Angelo Mozilo.
PennyMac CEO Stanford Kurland was the number two man at Countrywide before leaving in 2006. After starting PennyMac in 2008, the company began to recruit other former Countrywide staffers to create their new firm, whose business plan states, according to Fortune, buying "delinquent mortgages on the cheap, offer loan modifications and make some money in the process."
Fortune notes that of the 313 PennyMac executives listed on LinkedIn, 75 of them had worked at some point for Countrywide.
Countrywide was accused of being one of the companies at the center of the housing bubble, resulting in charges that loan officers regularly charged higher rates and fees to minority home borrowers over those charged to white borrowers. Bank of America, who acquired and absorbed Countrywide in 2008, ended up paying about $335 million to settle those charges.
Some former Countrywide employees have come forward and said they had tried to warn federal authorities about lending practices that would be considered abusive, but were either silenced by their superiors or shown the way out of the company.
Kurland, Brandt and the other ex-Countrywide staffers at PennyMac were not tied directly to the scandals that brought down Countrywide, however, Kurland has been sued by former Countrywide shareholders.