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572 Notes to Chapter 7

41. Angelo Mozilo, email to Carlos Garcia (cc: Kurland), subject: “re: Fw: Bank Assets,” August 2,
2005.
42. Countrywide, 2005 Form 10-K, p. 57; 2007 Form 10-K, p. F-45.
43. See Washington Mutual, 2006 Form 10-K, p. 53.
44. John Stumpf, interview by FCIC, September 23, 2010.
45. Countrywide, 2007 Form 10-K, p. F-45; 2005 Form 10-K, p. 57
46. Washington Mutual, 2007 Form 10-K, p. 57; 2005 Form 10-K, p. 55
47. Kevin Stein, testimony before the FCIC, Sacramento Hearing on the Impact of the Financial
Crisis–San Francisco, day 1, session 2: Mortgage Origination, Mortgage Fraud and Predatory Lending in
the Sacramento Region, September 23, 2010, transcript, p. 72.
48. Mona Tawatao, in ibid., p. 228.
49. Real Estate Lending Standards, Federal Register 57 (December 31, 1992): 62890.
50. Ibid.
51. Office of the Comptroller of the Currency, Board of Governors of the Federal Deposit Insurance
Corporation, Office of Thrift Supervision, “Real Estate Lending Standards: Final Rule,” SR 93–1, January
11, 1993.
52. Office of the Comptroller of the Currency, Board of Governors of the Federal Deposit Insurance
Corporation, Office of Thrift Supervision, “Interagency Guidance on High LTV Residential Real Estate
Lending,” October 8, 1999.
53. Final Report of Michael J. Missal, Bankruptcy Court Examiner, In RE: New Century TRS Hold-
ings, Chapter 11, Case No. 07-10416 (KJC), (Bankr. D.Del.), February 29, 2008, pp. 128, 149, 128.
54. Yuliya Demyanyk and Otto Van Hemert, “Understanding the Subprime Mortgage Crisis,” Review
of Financial Studies, May 2009.
55. Sandler, interview.
56. CoreLogic loan performance data for subprime and Alt-A loans, and CoreLogic total outstanding
loans servicer data provided to the FCIC.
57. Christopher Mayer, Karen Pence, and Shane M. Sherlund, “The Rise in Mortgage Defaults,” Jour-
nal of Economic Perspectives 23, no. 1 (Winter 2009): 32.
58. William Black, testimony for the FCIC, Miami Hearing on the Impact of the Financial Crisis, day
1, session 1: Overview of Mortgage Fraud, September 21, 2010, p. 27.
59. Richard Bowen, interview by FCIC, February 27, 2010.
60. Jamie Dimon, testimony before the FCIC, January 13, 2010, p. 60.
61. This particular deal would be described as an excess-spread over-collateralized-based credit en-
hancement structure; see Gary Gorton, “The Panic of 2007,” paper presented at the Federal Reserve Bank
of Kansas City’s Jackson Hole Conference, August 2008, p. 23.
62. FCIC staff estimates based on analysis of data from BlackBox, S&P, and Bloomberg. The prospec-
tive loan pool for this deal originally contained 4,507 mortgages. Eight of these had been dropped from
the pool by the time the bonds were issued. Therefore, these estimates may differ slightly from those re-
ported in the deal prospectus because these estimates are based on a pool of 4,499 loans.
63. Ibid.
64. Federal Register 69 (January 7, 2004): 1904. The rules were issued in proposed form at Federal Reg-
ister 68 (August 5, 2003): 46119.
65. See OTS Opinion re California Minimum Payment Statute, October 1, 2002, p. 6.
66. Comptroller of the Currency John Hawke, remarks before Women in Housing and Finance,
Washington, D.C., February 12, 2002, attached to OCC News Release 2002-10, p. 2.
67. John Hawke, quoted in Jess Bravin and Paul Beckett, “Friendly Watchdog: Federal Regulator Of-
ten Helps Banks Fighting Consumers,” Wall Street Journal, January 28, 2002.
68. Oren Bar-Gill and Elizabeth Warren, “Making Credit Safer,” University of Pennsylvania Law Re-
view 157 (2008): 182-83, 192-94.
69. See Watters v. Wachovia Bank NA, 550 U.S. 1 (2007).
70. John Dugan, testimony before the FCIC, Public Hearing on Subprime Lending and Securitization
and Government-Sponsored Enterprises (GSEs), day 2, session 2: Office of the Comptroller of the Cur-
rency, April 8, 2010, transcript, p. 150.
71. Lisa Madigan, testimony before the FCIC, First Public Hearing of the FCIC, day 2, panel 2: Inves-
tigations into the Financial Crisis—State and Local Officials, January 14, 2010, transcript, p. 104.