|
Clinton Campaign Manager’s Role in Collapsed Lender
Although Sen. Hillary Clinton (D-NY) has emerged as a strong critic of subprime lending practices, her campaign manager played a major role as a director on the board of now-collapsed subprime lender Delta Financial Corp.
In recent months, Clinton has come out strongly against subprime practices as she contends for the Democratic nomination.
Clinton wrote a letter to Treasury Secretary Henry Paulson last December, calling for a 90-day moratorium on subprime foreclosures and a five-year freeze on the current rates on for subprime adjustable-rate mortgages (ARMs).
“After all, it is indisputable that brokers and mortgage companies lured families into mortgages which were designed to end in foreclosure,” wrote Clinton on asking to extend the rate freeze and possible loan modifications to borrowers who have fallen behind on their payments.
Among a series of proposals Clinton unveiled last week, the Senator pushed to end the practice of charging prepayment penalties.
Clinton's campaign manager, Maggie Williams, served as a director on the board of the Woodbury, New York-based subprime lender that charged such fees before it collapsed into bankruptcy the same month as Clinton’s letter was sent.
Williams earned approximately $200,000 for her advisory and oversight role at the company, which spanned from April 2000 until Delta filed for Chapter 11 protection last year.
When Williams joined Delta, the firm had already been the subject of numerous lawsuits charging the subprime lender with predatory lending practices.
A series of state and federal predatory investigations resulted in roughly $12 million in settlements to borrowers, although Delta maintains no wrongdoing on its part.
After serving as the former first lady’s chief of staff from 1993 to 1997, Williams was recruited to establish a new code of "best practices" and improve Delta's crisis management operation following the predatory lending charges.
For her services on the board, Williams received about $30,000 per year plus expenses and at least 25,000 stock options, according to Securities & Exchange Commission (SEC) filings.
As of September 2007, Williams owned 12,500 shares of Delta’s common stock and had earned at least $175,000, according to the filings.
September marked the end of Delta’s final period of quarterly reporting before the company collapsed during the fourth quarter.
Delta reported a $39.6 million net loss for the third quarter as loan loss provisions more than tripled to $21.5 million, up from $6.9 million a year earlier
As of September 30, Delta said loans delinquent more than 90 days constituted 9.1% of the outstanding loan balance on its portfolio.
With the collapse of a deal with a major shareholder to buy up more than two-thirds of the company last December, Delta was notified by its warehouse lenders of defaults on its loans and soon began winding down through bankruptcy proceedings.
Williams took over as the campaign manager for Clinton in February, after the campaign withstood a disappointing Super Tuesday contest with little in the way of preparations – or cash on hand – for the extended primary battle to come.
Despite growing pressure to bow out as the likelihood of winning the nomination dwindles, Clinton has vowed to soldier on with the race for the Democratic nomination.
Note: This article won't be on the internet until tomorrow morning.
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
