twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map
Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.

Former AIG Chief Reflects on Financial Crisis

Edward Liddy speaks in Naples

April 4, 2016

By JUNE FLETCHER Naples Daily News (Tribune News Service)

Edward M. Liddy knows what it's like to be at the center of a maelstrom.

Not long after he took over troubled insurer American International Group at the height of the financial crisis, at the request of then-Treasury Secretary Henry Paulson and others, he began receiving death threats.

"It was really terrifying," said Liddy, who was given the job of straightening out the balance sheet of the giant insurer, which had fallen deeply into debt -- but was about to be bailed out by the federal government to the tune of $85 billion.

Even though he had not been in charge of the company when the debt had been incurred, he expected to be a scapegoat if his efforts were unsuccessful.

"I would have been in jail," he told a crowd of about 300 members of the Forum Club on Friday at the Naples Beach Hotel & Golf Club in Naples, Florida.

Ultimately, Liddy did succeed in bringing the company back to health by performing financial triage, dramatically downsizing the giant insurer by quickly selling off unprofitable units.

The scaled-down company eventually returned to financial health and paid off its loan from the federal government, which had ballooned to $182 billion before the crisis passed.

"Every penny was paid off," he said. "I was very proud of that."

Yet his tenure, which lasted from September 2008 to August 2009, was controversial.

A month after he took over AIG, Liddy was in the news for defending a retreat for top-performing salesmen at the swank St. Regis Resort in Monarch Beach, California.

Although Liddy later defended the retreat before Congress as "standard practice in our industry," the bills that the retreat racked up -- which included $200,000 for rooms, $150,000 for meals and $23,000 for the spa --did not make pretty headlines.

During the presidential debate that October, Barack Obama criticized the expenditures and said, "The Treasury should demand that money back, and those executives should be fired."

In the wake of the controversy, Liddy urged employees to return $165 million in bonuses, which also drew congressional criticism from both sides of the aisle.

Later it was revealed that Liddy had accelerated more than a quarter of AIG's financial products bonuses by three months.

Liddy contended that the company was obligated by law to honor pre-existing contracts and pay the employee bonuses, no matter the source of the funds.

Liddy also drew fire from Congress in April 2009 for the more than 27,000 shares he owned in Goldman Sachs, which had also received bailout money from the federal government.

Owning the shares created a conflict of interest, his critics said. Liddy was serving on Goldman Sach's board when he was asked to head AIG.

In May 2009, Liddy said he would resign from AIG when replacements could be found for the chairman and chief executive jobs; in August 2009, he did so.

Now 70, he recalls the time as one of "great personal cost."

Even so, Liddy -- who received a salary of $1 per year to head AIG -- said he probably would do it all again out of a sense of patriotic duty during a time of unprecedented national financial stress.

And he was able to point to some accomplishments during his short tenure as the boss of AIG, including convincing the government to lower its initial interest rates for the bailout loan.

"The terms were brutal," he recalled.

By quickly selling off unprofitable units of AIG, he was able to downsize the insurer dramatically and turn the leaner company toward financial health.

Consequently, the company became stable and did not fall into bankruptcy, he said.

In response to a question from the audience about whether the government should have let troubled banks and other institutions fail in 2008, Liddy was emphatic that the government had made the right move.

If they had not bailed out these institutions, "it would have been catastrophic," he said.

Liddy said the crisis was caused by a multitude of factors, from ratings agencies that gave too-favorable ratings to shaky companies, to mortgage companies that were too lax in making loans. Homebuyers who purchased houses they couldn't really afford were also to blame.

"They all lost their way," he said.

And while the ship has largely righted itself, Liddy said he's concerned to see some of the harbingers of the crisis, like low- or no-documentation mortgage loans, "creeping back into the system."

"There's a shortness of collective memory," he said.

e-mail writer: [email protected]

AIG profile

next story

back to current headlines

Financial Regulation News | Mortgage Regulations
Bank and mortgage regulators, regulations and regulatory actions. Coverage of regulatory legislation and testimony.

Political Mortgage News | Mortgage Laws
Mortgage people in politics. Political contributions by mortgage companies. Coverage of political support by lenders and executives. GSE lobbying and issues.

To see more of the Naples Daily News or to subscribe to the newspaper, go to

Copyright (c) 2015, Naples Daily News, Florida

Distributed by Tribune News Service.

This story was distributed by TNS - Tribune News Service
Logout forgot

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders