Brilliant piece in Columbia Journalism Review on the innner workings of subprime crisis and links to fall of Lehmans etc.
"The piece quotes Mike Garner, who was recruited as an executive at Silver State Mortgage, Nevada’s largest mortgage lender, from his previous job—as a bartender. Garner’s new job was to send guys to cruise strip malls to buy up product from brokers like Glen Pizzolorusso, the Boiler Room guy, and sell it to guys like Morgan Stanley’s Francis. Garner says he noticed that every month guidelines got looser, to the point where loan officers refused to look at borrowers’ pay stubs or W-2 forms in order to properly “underwrite” a stated-income loan.
Mike Garner: Then the next one came along, and it was no income, verified assets. So you don’t have to tell the people what you do for a living. You don’t have to tell the people what you do for work. All you have to do is state you have a certain amount of money in your bank account. And then, the next one, is just no income, no asset. You don’t have to state anything. Just have to have a credit score and a pulse.
[reporter] Alex Blumberg: Actually, that pulse thing. Also optional. Like the case in Ohio where twenty-three dead people were approved for mortgages."
http://www.cjr.org/essay/boiler_room.php?page=4
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment