The deposition of Glenn Hubbard has been making the rounds this week. If
you have ever watched the documentary, Inside Job, then you may be familiar
with Glenn Hubbard -- he is the one who tells of an interviewer saying,
"This isn't a deposition."
It turns out that Mr. Hubbard was
actually deposed as part of a rather massive lawsuit against Countrywide. I have barely
had time to skim the 80-page document, but fortunately,
Matt Tiabbi has had more time. Based on Tiabbi's writeup, it looks like the deposition yields some
In one line of questioning, Hubbard admits that he was paid $1,200 an hour
by Countrywide to review loans. However, it would appear that this loan
review did not involve reviewing the underwriting of the loan. For those
who aren't familiar with how loans are issued, the underwriting process
is where the bank verifies income and the overall creditworthiness of
Hubbard was hired to review the loans as part of the litigation -- he was
to issue an opinion regarding whether the loans were any worse than other
loans issued by other banks. Keep in mind that the litigation involves
allegations that Countrywide sold loans that it fraudulently guaranteed
as good/performing loans. Those loans were then included in mortgage securities.
Those securities failed. Miserably.
But Hubbard didn't review the documents that would prove whether the
loans should have been issued in the first place. He states in the deposition
that it was not necessary to do so. How he could have adequately reviewed
the loans without looking at how the loans were issued is a mystery to me.
Hopefully, I will get a chance to review this deposition more thoroughly.
From what I have read so far, it promises to be an entertaining read.