I distinctly remember the first time I saw the grotesquely-tanned Mozilo addressing a sizable contingent of his 'loyal minions' and throwing out the statistic that "20% of high risk loans end in foreclosure." Mozilo then asserted, "we are looking at this statistic all wrong" --pausing for dramatic effect-- "This means that 80% of high risk loans (emphasis his) are successful." Mozilo informed us that Countrywide intended to tap into this vast pool of potential borrowers--what he called the 'historically disenfranchised' borrowers--and went on to describe the new sub-prime products Countrywide was introducing to the public.
This was all smoke and mirrors. Every GOOD lender knows that credit-worthiness is the cornerstone of mortgage underwriting. But, it didn't take long for savvy loan officers to understand that anyone could be made 'eligible' for a home loan.
I had clients who wanted to 'buy' houses that were far outside their means, and they would NOT listen to my adjurations about being 'one paycheck away from financial catastrophe.' I realize now that these poor people just shopped around for a loan officer who would write the loan they wanted.
I could go on for days about how we were 'encouraged' to market the sub-primes. Of course, the big five were paying loan officers much higher commissions on the sub-primes, a fact that my manager threw in my face each time he berated me for not marketing those vile pieces of corporatist crap.
Most loan officers were totally on board the sub-prime bandwagon from the get go. Indeed, if I had been given my promotion when it was promised --in the spring of the first "year of the sub-primes"--I would have made a minimum of $40,000/month during those glory days, before I understood what these loans really represented. I was quite naive then. But, it didn't take me long to get the bigger picture. I now realize how lucky I was not to market OR write sub-prime loans. (I suspect that a few of my peers had similar experiences.)
I left (fortuitously) right before the internal auditors (Feds?) executed an early morning raid on our Galleria-area high-rise offices, re-keyed the locks, and confiscated all the files and computers. I had lunch with our admin one last time after that, but I don't know the legal outcome for my manager and his hotshot loan officers. Rumor has it they were writing homestead mortgages for a group of California real estate investors--a serious infraction both federally and internally.
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