How a Gang of Predatory Lenders and Bankers Fleeced America

[SHRED]

Oh I'm sorry...I mean't it was ACORN...you know...it was them colored people getting loans and stuff they couldn't afford... :sarcasm:

The Monster: How a Gang of Predatory Lenders and Bankers Fleeced America, and Launched a Global Crisis
By Michael Hudson, Times Books
Posted on October 22, 2010,

The following is an excerpt from Michael Hudson's THE MONSTER: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America – And Spawned a Global Crisis (2010, Times Books)

A few weeks after he started working at Ameriquest Mortgage, Mark Glover looked up from his cubicle and saw a coworker do something odd. The guy stood at his desk on the twenty-third floor of downtown Los Angeles's Union Bank Building. He placed two sheets of paper against the window. Then he used the light streaming through the window to trace something from one piece of paper to another. Somebody's signature.

Glover was new to the mortgage business. He was twenty-nine and hadn't held a steady job in years. But he wasn't stupid. He knew about financial sleight of hand -- at that time, he had a check-fraud charge hanging over his head in the L.A. courthouse a few blocks away. Watching his coworker, Glover's first thought was: How can I get away with that? As a loan officer at Ameriquest, Glover worked on commission. He knew the only way to earn the six-figure income Ameriquest had promised him was to come up with tricks for pushing deals through the mortgage-financing pipeline that began with Ameriquest and extended through Wall Street's most respected investment houses.

Glover and the other twentysomethings who filled the sales force at the downtown L.A. branch worked the phones hour after hour, calling strangers and trying to talk them into refinancing their homes with high-priced "subprime" mortgages. It was 2003, subprime was on the rise, and Ameriquest was leading the way. The company's owner, Roland Arnall, had in many ways been the founding father of subprime, the business of lending money to home owners with modest incomes or blemished credit histories. He had pioneered this risky segment of the mortgage market amid the wreckage of the savings and loan disaster and helped transform his company's headquarters, Orange County, California, into the capital of the subprime industry. Now, with the housing market booming and Wall Street clamoring to invest in subprime, Ameriquest was growing with startling velocity.

Up and down the line, from loan officers to regional managers and vice presidents, Ameriquest's employees scrambled at the end of each month to push through as many loans as possible, to pad their monthly production numbers, boost their commissions, and meet Roland Arnall's expectations. Arnall was a man "obsessed with loan volume," former aides recalled, a mortgage entrepreneur who believed "volume solved all problems." Whenever an underling suggested a goal for loan production over a particular time span, Arnall's favorite reply was: "We can do twice that." Close to midnight Pacific time on the last business day of each month, the phone would ring at Arnall's home in Los Angeles's exclusive Holmby Hills neighborhood, a $30 million estate that once had been home to Sonny and Cher.On the other end of the telephone line, a vice president in Orange County would report the month's production numbers for his lending empire. Even as the totals grew to $3 billion or $6 billion or $7 billion a month -- figures never before imagined in the subprime business -- Arnall wasn't satisfied. He wanted more. "He would just try to make you stretch beyond what you thought possible," one former Ameriquest executive recalled. "Whatever you did, no matter how good you did, it wasn't good enough."

MORE: http://www.alternet.org/story/148577/

[Turbineguy]

1. They could not have been so successful

if it were not for the help of Republicans or the Bush Administration.

[Demeter]

2. And the DINOS

Patrick Leahy, for example--trying to bury the mortage/foreclosure fraud with a stealth bill on notaries...

[dixiegrrrrl]

3. Roland Arnall was appointed Ambassador to the Netherlands, by Bush.

In the 2003-2005 period, Arnall and his wife raised more than $12 million for George W. Bush's political efforts, including $5 million for the Progress for America Voter Fund, a self-proclaimed "conservative issue advocacy organization dedicated to keeping the issue record straight." In 2004 he was one of the top 10 donors to the Republican Party.<12>

Mrs. Arnall also served as a co-chair for the 2004 Republican Convention and hosted a $1 million Bush-Cheney fund-raiser at the couple's 10-acre (40,000 m2) home in Holmby Hills. In 2005, Ameriquest Capital and three of its subsidiaries comprised four of the 53 entities that each contributed the maximum of $250,000 to the second inauguration of President George W. Bush.

http://en.wikipedia.org/wiki/Roland_Arnall

The guy died in 2008.

[tinrobot]

4. I think I got scammed by these crooks.

What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower.

In 2003, I took out a second mortgage and requested a fixed rate. Two years later, the payment started going up - suddenly it was adjustable. I never figured out how that happened, but the article seems to explain it. They either forged or slipped new documents into the paperwork.

Thank goodness I was able to dump those creeps and refinance it as a fixed.

Crooks.

[CanonRay]

5. Great read.

On my to-read list.