WASHINGTON, DC — Among CFPB Director Kathy Kraninger’s new appointees to the Bureau’s Consumer Advisory Board (CAB) is Rebecca Steele, a former mortgage banker who was once dubbed the “new face of the housing crisis” by the New York Times for her role in saddling federal home loan companies Fannie Mae And Freddie Mac with toxic mortgages that led to over a billion dollars in losses during the financial crisis. In response, Jeremy Funk, spokesman for consumer watchdog group Allied Progress issued the following:
“What made Director Kraninger look at someone who was at the center of the subprime mortgage crisis and think, ‘That’s exactly who I should lean on for advice?’ With mortgage debt now at an all-time high, the Director ought to seek counsel from people interested in ensuring fairness and transparency in the home-lending market – not a Wall Street banker who got rich pushing riskier and riskier mortgages in the lead up to the financial crisis. If only the Director valued the opinions of consumers half as much of those of industry insiders. Based on her spate of anti-consumerrulemaking, that’s just not the case. One shudders to think of the consequences for consumers if the ‘New Face Of The Housing Crisis’ ever compares notes with the ‘Foreclosure King,’ Trump’s Treasury Secretary Steve Mnuchin.”
WHAT YOU NEED TO KNOW:
Rebecca Steele of the CFPB Advisory Board
The CFPB Has Appointed A Former Mortgage Banker That Has Been Called The “New Face Of The Housing Crisis” To Serve On The Bureau’s Consumer Advisory Board – Just As Mortgage Related Debt Exceeds “Any Other Point In U.S. History.”
The CFPB Has Appointed Rebecca Steele, A Former Mortgage Banker Who Has Been Called The “New Face Of The Housing Crisis,” To Serve On The Bureau’s Consumer Advisory Board.
On October 3, 2019, The CFPB Announced The Appointment Of Rebecca Steele, President And CEO Of The National Foundation For Credit Counseling, To The Bureau’s Consumer Advisory Board. “Consumer Financial Protection Bureau Director Kathleen L. Kraninger today announced the appointment of members to the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), Credit Union Advisory Council (CUAC), and Academic Research Council (ARC). These experts advise Bureau leadership on a broad range of consumer financial issues and emerging market trends. […] The following members will serve on each of their respective committees: Consumer Advisory Board (CAB) […] Rebecca Steele, President/CEO, National Foundation for Credit Counseling (Washington, DC)” [Press Release, Consumer Financial Protection Bureau, 10/03/19]
In October 2013, The New York Times Referred To Rebecca Steele, Then Rebecca Mairone, As The “New Face Of The Housing Crisis” Due To Her Role In “Saddl[ing] The Housing Giants Fannie Mae And Freddie Mac With Bad Mortgages That Resulted In Over $1 Billion In Losses.” “More than five years after the housing bust, the roll call of banking executives who have been blamed by the public for the crisis has grown ever longer. But when it comes to top managers who have been hit with a jury verdict for pushing dubious mortgages, the list is small indeed. The new name added this week was Rebecca S. Mairone, a midlevel executive at Bank of America’s Countrywide mortgage unit, who was held liable by a federal jury in Manhattan for having saddled the housing giants Fannie Mae and Freddie Mac with bad mortgages that resulted in over $1 billion in losses.” [Landon Thomas Jr., “Bank’s Midlevel Executive Becomes a New Face of the Housing Crisis,” The New York Times, 10/25/13]
While Steele Led The “Full Spectrum Lending Division At Countrywide,” A Federal Judge Ordered Bank Of America Pay $1 Billion For Defrauding Fannie Mae And Freddie Mac By “Selling Toxic Mortgage Loans To The Government-Sponsored Enterprises” – Even Steele Herself Was Issued A $1 Million Fine For Her Role. Though A Federal Court Of Appeals Ultimately Threw Out The Fines.
In 2013, While Rebecca Steele Served As The “Chief Operating Officer Of Full Spectrum Lending Division At Countrywide,” A Federal Jury Found That Bank Of America And Countrywide “Defraud[ed] Fannie Mae And Freddie Mac By Selling Toxic Mortgage Loans To The Government-Sponsored Enterprises.” “Rebecca Steele, who the New York Times once referred to as the ‘face of the housing crisis,’ has now been hired as the president and CEO of the National Foundation for Credit Counseling. But taking up the mantle of CEO of a credit education nonprofit is a far cry from the world Steele came from. Steele formerly served as the chief operating officer of the Full Spectrum Lending Division at Countrywide. Under her leadership, the Full Spectrum Lending Division underwent reorganization and implemented Countrywide’s ‘High Speed Swim Lane’ or ‘HSSL’ loan origination process. The HSSL or ‘Hustle’ program was known for its breakneck pace of loan underwriting. In 2013, a federal jury ruled that Bank of America and Countrywide were liable for defrauding Fannie Mae and Freddie Mac by selling toxic mortgage loans to the government-sponsored enterprises.” [Jeremiah Jensen, “Rebecca Steele, the ‘face of the housing crisis,’ finds new home at nonprofit credit counselor,” HousingWire, 07/19/18]
- In July 2008, Bank Of America Purchased Countrywide Financial In A Move That Created The “Nation’s Leading Mortgage Originator And Servicer.” “Bank of America Corporation today completed its purchase of Countrywide Financial Corp. to create the nation’s leading mortgage originator and servicer. Bank of America will focus on responsible home lending, serving as a reliable source of mortgages for the American consumer. Bank of America also will assist new and existing customers with selecting the right product to meet their needs.” [Press Release, Bank of America, 07/01/08]
In 2014, Bank Of America Was Ordered To “Pay More Than $1 Billion In Fines For The Hustle Loan Sales,” And Rebecca Steele Was Required To “Pay A Fine Of $1 Million.” “In 2014, a federal judge ruled that Bank of America was required to pay more than $1 billion in fines for the Hustle loan sales, despite the government seeking more than $2 billion. The judge also ruled that Steele was required to pay a fine of $1 million.” [Jeremiah Jensen, “Rebecca Steele, the ‘face of the housing crisis,’ finds new home at nonprofit credit counselor,” HousingWire, 07/19/18]
Ultimately, A Federal Court Of Appeals Threw Out The Fines Against Bank Of America And Rebecca Steele As The “Government Did Not Prove That Countrywide And Steele Committed Fraud When They Sold Toxic Mortgages To Fannie And Freddie.” “But then the Court of Appeals ruled in Bank of America’s and Steele’s favor and threw out the fine against each. The court ruled that the government did not prove that Countrywide and Steele committed fraud when they sold toxic mortgages to Fannie and Freddie.” [Jeremiah Jensen, “Rebecca Steele, the ‘face of the housing crisis,’ finds new home at nonprofit credit counselor,” HousingWire, 07/19/18]
Current Mortgage Related Debt Has Exceeded “Any Other Point In U.S. History” While Becoming More Risky – The Federal Housing Administration Estimated That “57 Percent Of The Loans It Insured Breached The High-Risk Echelon.”
Fannie Mae, Freddie Mac, And The Federal Housing Administration Currently Guarantees “$7 Trillion In Mortgage-Related Debt, 33 Percent More Than Before The Housing Crisis.” “The federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay. Now, Fannie Mae, Freddie Mac and the Federal Housing Administration guarantee almost $7 trillion in mortgage-related debt, 33 percent more than before the housing crisis, according to company and government data. Because these entities are run or backstopped by the U.S. government, a large increase in loan defaults could cost taxpayers hundreds of billions of dollars.” [Damian Paletta, “Federal government has dramatically expanded exposure to risky mortgages,” The Washington Post, 10/02/19]
There Is Currently “More Government-Backed Housing Debt Than At Any Other Point In U.S. History” And The Federal Housing Administration Estimated That “57 Percent Of The Loans It Insured Breached The High-Risk Echelon.” “In 2019, there is more government-backed housing debt than at any other point in U.S. history, according to data from the Urban Institute. Taxpayers are shouldering much of the risk, while a growing number of homeowners face debt payments that amount to nearly half of their monthly income, a threshold many experts consider too steep. Roughly 30 percent of the loans Fannie Mae guaranteed last year exceeded this level, up from 14 percent in 2016, according to Urban Institute data. At the FHA, 57 percent of the loans it insured breached the high-risk echelon, jumping from 38 percent two years earlier.” [Damian Paletta, “Federal government has dramatically expanded exposure to risky mortgages,” The Washington Post, 10/02/19]