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Hillary camp’s subprime sanctimony

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By Michelle Malkin  •  March 31, 2008 11:19 AM

From the lender-bashing Hillary Clinton campaign, we learn via Newsday, that campaign chief Maggie Williams (already tainted by the Johnny Chung scandal) got rich while serving “on the board of a Long Island subprime lender that charged prepayment penalties – a practice that Clinton, a critic of the subprime industry, now seeks to eliminate.” It’s the monumental hypocrisy, stupid:

Hillary Rodham Clinton’s campaign manager, Maggie Williams, earned about $200,000 on the board of a Long Island subprime lender that charged prepayment penalties – a practice that Clinton, a critic of the subprime industry, now seeks to eliminate.

Williams, who took over the reins of Clinton’s campaign in early February, served as a director on the board of the Woodbury-based Delta Financial Corp. from April 2000 until the firm declared bankruptcy in December, according to Securities and Exchange Commission records.

She was recruited by former New York City Deputy Mayor Bill Lynch, a Delta consultant. Her assignments were to create a new code of “best practices,” and to improve the company’s crisis management operation in the wake of state and federal predatory lending probes that resulted in a $12 million payout to borrowers.

Her hiring coincided with stepped-up Delta outreach efforts in minority communities, where the company made a large number of its loans, an initiative that included parties for homeless children and mortgage seminars in Brooklyn and Queens.

Williams, 53, isn’t the only Clinton insider who made money from an industry the candidate has demonized. A month ago, The Wall Street Journal reported that Clinton ally and former HUD Secretary Henry Cisneros grossed more than $5 million in stock sales and board compensation from Countrywide Financial, one of the nation’s largest subprime lenders.

Once a poster child for predatory practices, Delta’s reputation improved substantially until it buckled, as executives avoided adjustable-rate mortgages for fixed-rate loans, which have fewer defaults.

To boost revenue in the absence of high-profit adjustable loans, the company charged relatively steep interest rates – 11 percent in 2007 – and levied higher-than-prime-loan closing costs.

And Delta assessed penalties to borrowers who paid off before their loans matured – a practice Clinton frequently decries on the campaign trail.

“I would eliminate the prepayment penalties that lead to such high rates of default,” Clinton said in a March 24 speech at the University of Pennsylvania. “I would require lenders to take into account the borrower’s ability to pay property taxes and insurance fees when deciding whether to make a loan in the first place.”

Subprime loans come with higher interest rates and are offered to borrowers with poor credit. The loans soared along with the housing boom and are an underlying cause of the current credit crisis.

Williams downplayed her role at the company, saying, through an assistant that she served only in “an advisory/oversight capacity.”

Hey, how ’bout returning the money earned through practices your boss so despises, Maggie?

Cue the chirping crickets.

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On a related note, check out the new “Don’t Foreclose Me, Bro!” t-shirts now on sale:

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