When the Federal Housing Finance Agency (FHFA) late Friday unveiled its $200 billion lawsuit against investment banking firms that sold faulty MBS to Fannie Mae and Freddie Mac, it also targeted executives who signed the original shelf registration documents on the securities in question.
In the case of Countrywide Financial Corp. (CFC), that means FHFA (at this time) is not pursuing claims against company founder and chairman Angelo Mozilo, but instead is suing former CFC executives such as Stanford Kurland, Eric Sieracki, and David Spector.
In FHFA's claim against CFC, Messrs. Kurland, Sieracki, and Spector are all named as defendants – because, as FHFA notes: they signed the shelf registration statements on nonprime MBS that were later sold to Fannie and Freddie.
Messrs. Kurland and Spector left CFC in 2006, about a year before that institution's problems became readily apparent. (Sieracki left in 2008.)
Kurland and Spector now work at PennyMac Mortgage Investment Trust, Calabasas, Calif., a publicly traded REIT that invests in nonperforming loans but also controls affiliates that have seller/servicer approvals with the GSEs and Ginnie Mae.
Kurland, who founded PennyMac, is chairman and CEO, Spector chief operating officer. A spokesman for PennyMac said they would not be commenting on the FHFA lawsuit at this time.