Executives From Biggest Subprime Lenders Are Peddling Risky Mortgages Again - HuffPo

[WillyT]

Executives From Biggest Subprime Lenders Are Peddling Risky Mortgages Again
Center for Public Integrity/HuffPo | By Daniel Wagner
Posted: 09/11/2013 6:01 am EDT

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Andy Pollock rode the last subprime mortgage wave to the top then got out as the industry collapsed and took the U.S. economy with it. Today, he’s back in business.

Pollock was president and CEO of First Franklin, a subprime lender whose risky loans to vulnerable consumers hastened the downfall of Merrill Lynch after the Wall Street investment bank bought it in 2006 for $1.3 billion. He was still running First Franklin for Merrill in 2007 when he told Congress that the company had “a proven history as a responsible lender” employing “underwriting standards that assure the quality of the loans we originate.”

The next year, federal banking regulators said First Franklin was among the lenders with the highest foreclosure rates on subprime loans in hard-hit cities. Standard & Poor’s ranked some of its loans from 2006 and 2007 among the worst in the country. Lawsuits filed by AIG and others who bought the loans quoted former First Franklin underwriters saying that the company was “fudging the numbers” and calling its loan review practices “basically criminal,” with bonuses for people who closed loans that violated its already-loose lending standards.

Merrill closed First Franklin in 2008 after the subprime market imploded and demand for risky loans dried up. For Pollock and his contemporaries, who have survived decades of boom and bust in the mortgage trade, the recent near-toppling of the global economy was a cyclical, temporary downturn in a business that finally is beginning to rebound.

Five years after the financial crisis crested with the bankruptcy of Lehman Brothers Holdings Inc., top executives from the biggest subprime lenders are back in the game. Many are developing new loans that target borrowers with low credit scores and small down payments, pushing the limits of tighter lending standards that have prevailed since the crisis.

Some experts fear they won’t know where to stop.

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More: http://www.huffingtonpost.com/2013/09/11/subprime-loans_n_3903290.html?utm_hp_ref=business&utm_hp_ref=business

[FreakinDJ]

1. Why not - Feds are buying $85 Billion in Toxic Assets a month

Sounds to me "If the Bitch keep paying I'll keep playing"

[dixiegrrrrl]

2. Yep..got an invite from my current mortgage servicer for one.

They are trying SO hard to pump that bubble back up.

[hootinholler]

3. Good maybe I can qualify for a mortgage

It's about time to get some property.

[Hydra]

4. *lmao*

"Who could have predicted..."

[WillyT]

5. Yep...

[City Lights]

6. No one could have predicted...nt