Monday, September 29, 2008

John Courson - The Next MBA President?

From the Sacramento Bee:

A veteran Sacramento mortgage banker who has been lobbying Congress to pass the $700 billion bailout has been accused of defrauding 11 of his former branch managers and embezzling $879,000 from them in the collapse of his Folsom mortgage brokerage in 2007. The allegations against John A. Courson, owner of the defunct Folsom-based Central Pacific Mortgage Co., are described in a civil lawsuit filed last year by eight of Central Pacific's former branch managers in California, two in Maryland and one in Florida.

Courson, 66, is chief operating officer of the Mortgage Bankers Association of America in Washington, D.C...Courson, a resident of Rancho Murieta, was named chief operating officer July 22. He is scheduled to become MBA president in January.
...
Florida branch manager and owner Jenny Mann alleges she lost $20,000. "When I saw he was appointed chief operating officer, I nearly died," Mann said from North Florida, where she lives. "Don't they know he did this to us? I would have assumed he would never work in this industry again."
From the Sacramento Bee:
Bertram Chatham, owner of a Citrus Heights Halloween store, says he's just as good a businessman today as he was a year ago. So when Wells Fargo & Co. slashed his available line of credit this summer from $26,000 to $10,000, he knew he'd gotten snared by the nation's credit crunch. The reduced financing prodded him to scale back his operation this fall, at a cost to the economy of about 30 jobs..."Credit is drying up," Chatham said. "Not just for the big banks but the guys on the street."
...
"No matter how you feel about Wall Street and the high-finance executives on Wall Street, you have to understand that no matter what, this would eventually land on Main Street's door," said Joe Anfuso, president of Central Valley homebuilder Florsheim Homes. "It's going to end up on everybody's front door in terms of credit cards being revoked, no more home equity lines, small business lines of credit, payroll lines of credit."
From the Sacramento Bee:
Hard times are swelling attendance at job fairs both locally and across the state. At McClellan Park on Thursday, 400 job seekers went through in the first hour of the state Employment Development Department "talent transfer" fair, designed to help unemployed workers from the depressed housing industry get into jobs where their skills are in demand. The five-hour fair drew nearly 1,000. State officials said job fairs are seeing about twice as many participants as they were getting only two years ago. Local companies said they're seeing two to three times the candidates they had at recruitment events in 2006.
From News10:
At Sacramento Crisis Nursury, every bed has been filled the last two weeks and Director Sue Bonk says the economy is the reason. "There are no jobs, and the stress level in people's lives is just getting over the top," Bonk said....Domestic violence counselors say phone calls to crisis centers are up this year and that many victims are afraid to leave abusive homes and face a worsening economy.
From the Sacramento Business Journal:
Matt Lemos earned $80,000 a year as a customer relations manager at Pulte Homes Inc. when he was laid off in June 2007. This year, he expects to make $20,000 to $30,000 less from two companies he started using his landscaping background and development contacts.

Lemos is not alone. Personal income growth slowed in 2007 in most U.S. metropolitan areas, but Greater Sacramento fared worse than the national average, according to estimates released last month by the U.S. Bureau of Economic Analysis. “California is bearing a larger brunt of what started as the housing crisis,” said Suzanne O’Keefe, an economist with the Sacramento Regional Research Institute. “And we seem to be losing jobs in more and more sectors as the time passes.”
From News10:
A Stockton company that paints dead lawns green is busier than ever because of the foreclosure crisis. The business is called Greener Grass Company and 40 times a month [versus 10 times in the first six months], owner Nick Terlouw is making brown yards look green again.
From the Modesto Bee:
Mark Wilbur, owner, McRoy-Wilbur Communities Inc: "As a builder, it is very painful to deal with this foreclosure problem, but a hands-off approach will ultimately be best for everybody. Many of the people 'losing' their homes have simply chosen to walk away because of declining values. Making victims for political gain seems to be rampant in both parties.

"A major reason many loans have not been modified or rewritten is that the owners cannot show economic hardship. The current mentality is to ignore your debt if it is not financially beneficial. The media has been just as guilty as our politicians in convincing people they have been victimized rather than irresponsible."
From the Modesto Bee:
When the mortgage bubble burst, Americans were "shocked" at how many Wall Street buccaneers had been gambling in a vast pyramid scheme with someone else's money. Paper fortunes were made buying and selling questionable subprime mortgages on the silly assumption that such gargantuan inside profiting would always expand -- even as the number of home buyers able to buy overpriced properties was shrinking.
...
All that remains of this Ponzi scheme is the election-year blame game...Who re-elected these shady politicians of both parties?...We citizens did -- red-state conservatives and blue-state liberals, Republicans and Democrats alike. We may be victims of Wall Street greed -- but not quite innocent victims.
...
We created the cultural climate for this shared madness. Television shows advised how to "flip" a house after putting in cosmetic improvements. Real-estate seminars and popular videos convinced us that homes were not places to live in and raise a family but rather no different from piles of chips on a Vegas table.

8 comments:

Jacob said...

Real-estate seminars and popular videos convinced us that homes were not places to live in and raise a family but rather no different from piles of chips on a Vegas table.


I dissagree. Casinos are for gambling, and real estate was a sure thing since prices always go up...

sacramentia said...

$26,000 to $10,000, he knew he'd gotten snared by the nation's credit crunch. The reduced financing prodded him to scale back his operation this fall, at a cost to the economy of about 30 jobs..

Can someone explain to me how 16k of credit equals 30 jobs? It seems like BS to me, but maybe I don't get it.

UnrulyBushMan said...

"A Stockton company that paints dead lawns green is busier than ever because of the foreclosure crisis."

LMAO! This story is hilarious.

Deflationary Jane said...

No mentalia, you are correct and the writer was dishing out pooh. $16k = 30 FTEs is utter nonesense.

Buying Time said...

"$16k credit = 30 FTEs is utter nonesense."

The media makes it sound like the sky is going to fall tomorrow if this bill doesn't go through, but it is really hard to buy their argument when this is the only type of consequence they can come up with.

Diggin Deeper said...

""No matter how you feel about Wall Street and the high-finance executives on Wall Street, you have to understand that no matter what, this would eventually land on Main Street's door,""

Now there's talk about relaxing the "mark to market" financing rules and adding them to the bail out package. If that happens it's much like what happened in Japan in the 90's, where banks and the govt were allowed to hide their losses, by pushing them further and further downline.

Hank would get to buy assets on a mark to model basis, pay the mark to model price which is a helluva lot higher than they'd have to pay based on the current rules, and carry those credit instruments on the government's books until the investment fails, performs, or is sold. Based on performance of these assets over the last couple years, do we really want this to happen?

Damn, there's nothing left in the playbook except employing a failed model that put the world's second largest economy on it's heels for going on 18-19 years.

sacramentia said...

Thanks gwwenchster.

Deflationary Jane said...

"Thanks gwenchster."
LOL

Shana Tova >; )