Ex-Golden West exec now HUD's top lawyer
Michael Flynn named acting general counsel
By Inman News, Monday, November 3, 2008.The Department of Housing and Urban Development's legal staff of 370 attorneys will be overseen for the remainder of the Bush administration by Michael Flynn, who was the top lawyer at Golden West Financial Corp. during the housing boom.
Flynn served as senior vice president and senior counsel at Golden West -- known for its "pick-a-pay" adjustable-rate mortgages -- from December 2001 to January 2007.
Golden West was acquired by Wachovia Corp. in 2006, and Wachovia was itself taken over by Wells Fargo last month as mounting losses left the company undercapitlized. Former Golden West chief executive Herb Sandler, who with his wife Marion was ridiculed in a recent "Saturday Night Live" sketch, has said pick-a-pay mortgages were not the cause of Wachovia's demise.
At Golden West, Flynn managed a team of lawyers that oversaw the legal aspects of the company's mortgage lending practices, including originations, litigation, servicing, regulatory disputes, and compliance matters.
As HUD's new acting general counsel, Flynn will oversee about 370 attorneys and 320 additional staff, and serve as the chief legal advisor to Secretary of Housing Steve Preston and other top managers. He will maintain his current position as counselor to the HOPE for Homeowners board of directors.
Flynn succeeds Robert Couch, a former president of Ginnie Mae who had served as HUD's general counsel since June 2007.
***
What's your opinion? Leave your comments below or send a letter to the editor.
All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Pamela Mackenzie on November 3, 2008 - 12:40pm.
Am I the only person here who thinks this is outrageous?
Golden West, alias World Savings, was purchased by Wachovia, a move which did more than anything else to put Wachovia under. And why was that? Because Golden West/World Savings only made one kind of loan, Option ARMS, which were in most cases predatory. Paul Bishop, a former Golden West/World Savings loan officer is suing Wachovia, now Wells Fargo, I guess, in court in Oakland for wrongful termination because he wanted to blow the whistle on them for their predatory lending practices.
I can't say that this Michael Flynn was personally responsible for predatory lending, but to have someone who was once chief legal council for an organization such as Golden West/World Savings be the chief council for HUD is absolutely outrageous. Thank God the Bush administration is almost gone.
What are these folks thinking???????
Pam MacKenzie
Real Estate Editor
The Courier News, mycentraljersey.com
Submitted by Michael Espiritu on November 3, 2008 - 5:00pm.
Typical Washington play... let a guy who is directly involved in the mess we are in, rewarded for deceit, further rewarded as the warden of the prison??? Does not make any sense at all! This guy should be in jail.
No credibilty with John Q. Public when they appoint flakes like this guy!
You could not make this stiff up in a sit-com!
Michael Espiritu
Copeland Wealth Management
SoCal
Submitted by Lenn Harley on November 4, 2008 - 5:04am.
I suspect that Mr. Flynn is the beneficiary of a bit of cronyism, of which the Bush and all administrations, Democratic and Republican, are influenced.
That said, I don't believe that the "pay option" mortgage instrument was responsible for the mortgage mess. Many of my buyers over the years used this loan for their home purchase and all are still in their homes. Not one has failed. The pay option offerd opportunities for home owner control of their finances that the more structured amortization loans do not.
Seems to me that it was the laissez faire regulation and opportunistic securitization of these loans and the total corruption of Fannie Mae and Freddie Mac that led to the mortgage mess.
No need targeting Mr. Flynn without targeting the regulators and law makers who planned and executed the mortgage mess for their own benefit. I would target the law makers who took political contributions from the lobbyist for Fannie and Freddie. Mr. Flynn is small potatoes in this stew of corruption.
Lenn Harley
Broker
Homefinders.com
http://www.homefinders.com
Submitted by Pamela Mackenzie on November 4, 2008 - 5:56am.
Lenn,
You're probably a responsible broker who took the time to explain to your buyers how an Option ARM works, how they need to make more than the minimum payment most months so that they don't end up with negative amortizaiton.
I don't know what state you're in, but in Wisconsin, a couple sued Chevy Chase bank under the Truth in Lending Law for not making this clear. They won. This case will go all the way to the US Supreme Court and the judge in the initial decision has made this a class-action suit. Do you know what will happen to the hundreds of thousands, if not millions, of option ARMS if this couple ultimately wins? It's something the banks never want to see happen.
Here in NJ, there were plenty of builders offering option ARMS who advertised them as 1% loans. They never said it was 1% for one month. I don't think they were alone.
Pam MacKenzie
Real Estate Editor
The Courier News, mycentraljersey.com
Submitted by Gregory Schreiber on November 4, 2008 - 1:45pm.
Who put Joe Kennedy in charge of the SEC?