What flavor loan is in your future?
May 9, 2007
I haven't commented much about the current sub-prime mortgage mess except an article a few months ago about a friend that I believe was duped into an option ARM. Not only is the press rampant about the behavior of the sub-prime mortgage foreclosure rates, we also are beginning to read about the bad (also know as sleazy) behavior within the industry. Making easy money "selling" loans attracts many into the industry, the growth of the industry becomes Wall Street's darling, stockholders, investment banks as well as revenue and earnings growth requirements put pressure on executives, executives pressure the troops and dangle more commissions, the troops get commission greed and greed manifests bad behavior and perhaps, illegal activity.There is an interesting piece in the Washington Post this morning focused on the vicious cycle of industries gone bad:
Industries Could Take Cues From Hollywood on Self-ControlAnd, this featured article from a couple of days ago (In The News, above):
By Steven Pearlstein
Wednesday, May 9, 2007; Page D01
Hardly a day goes by that you don't read another account of sleazy business practices among subprime mortgage bankers or student loan companies or the private health plans under Medicare.
You know, the stories about mortgage companies that pressured appraisers to approve loans for amounts in excess of house values, and Wall Street investment banks that demanded more and more mortgages to package even if it meant lowering underwriting standards.
Pressure at Mortgage Firm Led To Mass Approval of Bad LoansThen there is the constant stream of spam solicitations coming across my FAX machine like the one pictured above. Not to mention email spam and Blog comment spam. The interesting aspect of the solicitation above is the block just below the center of the page:
By David Cho
Washington Post Staff Writer
Monday, May 7, 2007; Page A01
Maggie Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!
" 'You cut my [expletive] deal!' " she recalls one man yelling at her. " 'You can't do that.' " Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said.
- Debt Consolidation
- 100% Financing (actually I saw one a few days ago advertising 125% Financing)
- Bankruptcy OK
- Foreclosure OK
- UNLIMITED Cash Out
- No Income Verification (ie; a liar loan)
Where there is money there will be greed. Where there is greed there will be bad behavior and illegal, fraudulent activity. It doesnt discriminate by industry. They are all susceptible. Even real estate. When industries cannot regulate themselves, guess who will. And, the sooner the better.
Excuse me. I just received two more one-page faxes. I'd better go see what deals I am missing this morning.
Ahhh...Air Duct Cleaning (appealing to my sense of health) and the repeated FINAL NOTICE memo to All Corporate Employees RE: Employee Vacation Time.
Air Ducts: no. But, I do need a vacation...so...I'm calling right away! My next article is from Cancun.
Comment on What flavor loan is in your future?. Follow this article is off. More articles like this one filed in: Opinions
Subscribe to eMail Notifications
Enter your email address in the appropriate box below (email never disclosed)Blogs that link here
Copy this link (Trackback URL) to track this article.Comments
I had the misfortune of working with Maggie Hardiman as the appraisal clerk (my job was to assist her and the other appraisal reviewer) in the New Century branch she's talking about in this article and I have to say that not only is every word she said in that article a lie, she left out the fact that she was a difficult unreasonable monster to work with. She would reject loans because there was a shadow on the roof from nearby trees or in some cases simply because she didn't like the appraiser. I remember one time she had me spend all day gathering information on a certain appraiser she knew personally in order to get him blacklisted from New Century. When the information I provided showed he was a competent appraiser she got mad and accused me of working against her.
Paranoia was a common theme with her. Whenever anyone disagreed with her she would accuse the whole office of being against her.
Yes, it's true that when she would reject something, they would bring it to the other reviewer. But again, she neglects to mention that he was a well respected, competent appraiser with years of experience. And he didn't always overturn her decision, just the insane ones. While we're on that note, I should mention that whenever he rejected an appraisal, she would seek out the account executive and do anything in her power to accept it just to spite him. Since he only rejected appraisals for legitmate reasons that means many loans that never should have made it out did because of her.
I'm not normally one to celebrate another person's misfortune but the day she was fired was a great day for me and my job became so much more enjoyable after she was gone. The whole office breathed a sigh of relief that day.
I'm not saying things like this don't happen or that my office was perfect, and I wasn't aware of every single dealing in that office. I can only say that what Maggie Hardiman says in this article is completely false and I can't stand by and see my former co-workers and friends slandered like this.
I could go on but I'll leave it at this. If anyone is interested, you can email me at duanehamm@yahoo.com and Maggie if you read this, shame on you.
One last thing about Maggie, google "Margaret Hardiman" "Hopkinton" for a nice little story about the nightmare she put a small RI town through in her next job.
Scott, thanks for stopping by. I just returned from visiting your Blog. Great start! Best wishes and much success. Blog on!
great site- very informative
R. Sleeeeaaaaazzze. It is amusing in a sad sort of way. DITECH continues to do the same ads on TV! Unfortunately, people are still compelled, for some ungodly reason, to be attracted to these.
That advertisement is shameless. That you are still getting this type of ad illustrates that credit standards won't have truly tightened until the last teaser rate/ no doc/ interest only / no down payment loan factories are out of business. Many of the big guys' new mortgage guidance doesn't take effect until July 1. It will be interesting to see what happens if / when mortgage brokers have to qualify borrowers based on their ability to actually repay the loan.
Put a fork in it, this housing bubble is done.
Subscribe to: 
Valid CSS and
