Former Countrywide officials profit from bad loans

CALABASAS, Calif. - Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation's economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans.

So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.

Stanford L. Kurland, Countrywide's former president, and his team have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.

As hundreds of billions of dollars flow from Washington to jump-start the nation's staggering banks, automakers, and other industries, a new economy is emerging of businesses that hope to make money from the various government programs.

Among them is PennyMac, led by Kurland, 56.

While some critics are distressed that Kurland and his team are back in business, the executives say that PennyMac's operations serve as a model for how the federal government, working with the nation's banks, can help stabilize the housing market and lead the nation out of the worst recession in decades. It is quite evident that their efforts are, in fact, helping many distressed homeowners.

But to some, it is disturbing to see Kurland and his former Countrywide executives in the industry again.

"It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it," said Margot Saunders, a lawyer with the National Consumer Law Center.