Goodtimepolitics

The Wall Street Journal, citing government documents filed in federal court, reports that after the Federal Deposit Insurance Corp. seized control in 2001 of Superior Bank, a national subprime lender based in Illinois, it continued to shell out high-interest, subprime mortgages. Some of these mortgages were granted for more than the homes in question were worth, and sometimes without verification of the borrowers’ incomes. The paper writes, “With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data,” and then proceeded to sell a big chunk of those loans to another bank. Hundreds of borrowers of those loans have since lost their homes to foreclosure, the Journal says. The paper also reports that, before the bank’s collapse made it the biggest failure of a thrift in nearly a decade, Penny Pritzker served as its chairman and later sat on the board of its holding company. Ms. Pritzker is now Sen. Barack Obama’s national campaign-finance chairwoman, and her past could prove to be an embarrassment to the campaign, the Journal writes.