Until recently I was an underwriter for a sub-prime mortgage company that is about to close.  It seems that most media outlets and government officials fain ignorance about the real underlying cause of the problem.  There is either a tendency to blame the borrower or act as though no one in the industry {or outside of it} saw this coming.  They fail to mention that those who gained the most financially got off scot free while leaving the mess behind for everyone else to clean up.  In my former company, the sales managers and loan officers "held the keys to the safe" while deciding which guidelines to ignore sometimes going so far as to bribe fellow underwriters to "look the other way".  Sales managers often overrode an underwriter's decision they did not agree with.  Other times fellow underwriters would be threatened with their job for "impeding company growth and progress" just because they refused to go along with the flagrant disregard of guidelines .  I complained to the sales managers about the bribing but all I got was a formal write-up for making "inappropriate comments". 

There was absolutely no support from the owner of the company all the way to the human resource representative.  This company is as corrupt as they come.  I can't tell you the number of sexual affairs that occurred between married and unmarried people; primarily among the management staff {at the workplace itself}.  Promotions were strictly political thus moving people "up the ladder" who never proved themselves worthy or were on a final written warning to be terminated {for poor performance}.  As a result of the corrupt management of this company, I and several hundred others were laid off.  I believe the federal government needs to investigate this company and bring to trial those corrupt individuals who broke the law.  This would set an example for the rest of the mortgage industry that absolute corruption corrupts absolutely.

^ Then what are you doing hanging out on this board with us deadbeats?  You've got a screenplay to write.  Call Oliver.  Hop to it!
;)

^ Then what are you doing hanging out on this board with us deadbeats?  You've got a screenplay to write.  Call Oliver.  Hop to it!
;)


Already been done:  Glengarry Glen Ross, and Boiler Room.

My take on the meltdown -- in a free market, there ought to be no bailouts.  If that means everyone from E*Trade and Citigroup burn, so be it.

What perplexes me is how the big-name financial houses and investment banks got taken.  When enough NINJA (No Income, No Job, Assets) loans were being originated that there was a cute acronym for the term, even dumbarse retail investors like me could see that CDOs weren't worth the paper they were printed on. 

But denial is a funny thing.  I write the preceding paragraph knowing nothing more today than I did a year ago -- and yet, did I short CFC? C? WM? FNM? FRE?  Nope.  Because if people with that kind of capital were dumb enough to buy loans from mortgage originators and resell the resulting CDOs to even dumber pension fund managers, who was I to say that the emperor had no clothes, especially when the emperor had no shame.

Turns out, the market doesn't care whether the emperor has no shame.  A one-way bet is still a one-way bet, and from the sidelines, I salute those who profited from shorting those names.  They put their money where their mouths were, and they earned their profits.  Wish I'd have had the testicular fortitude to do the same.  That was some of the easiest money of the decade, and I was too cowardly to pick it off the floor.

Already been done:  Glengarry Glen Ross, and Boiler Room.

My take on the meltdown -- in a free market, there ought to be no bailouts.  If that means everyone from E*Trade and Citigroup burn, so be it.

What perplexes me is how the big-name financial houses and investment banks got taken.  When enough NINJA (No Income, No Job, Assets) loans were being originated that there was a cute acronym for the term, even dumbarse retail investors like me could see that CDOs weren't worth the paper they were printed on. 

But denial is a funny thing.  I write the preceding paragraph knowing nothing more today than I did a year ago -- and yet, did I short CFC? C? WM? FNM? FRE?  Nope.  Because if people with that kind of capital were dumb enough to buy loans from mortgage originators and resell the resulting CDOs to even dumber pension fund managers, who was I to say that the emperor had no clothes, especially when the emperor had no shame.

Turns out, the market doesn't care whether the emperor has no shame.  A one-way bet is still a one-way bet, and from the sidelines, I salute those who profited from shorting those names.  They put their money where their mouths were, and they earned their profits.  Wish I'd have had the testicular fortitude to do the same.  That was some of the easiest money of the decade, and I was too cowardly to pick it off the floor.

^ Right there you sound like Alec Baldwin in Glengarry Glen Ross!

I got into the NINJA life due to my illness.  Once you've been in it for over a decade, it seems like you're never going to get out.  I'm still working on it.  I sabotaged my credit from the start with student loans, which I still haven't paid back, and failure to take responsibility in the fog of severe depression. 

I became a firm believer in "If it sounds too good to be true, it is."  I would never buy sub-prime property.  Long before the scandal broke I saw people buying houses I knew they couldn't afford.  Three different people I know, two of them with children to support.  I knew they'd been turned down by the banks, then suddenly they've signed a mortgage. 
"How  did you do that?"
"Oh, it was real easy...."
I kept it zipped, but I wanted to say, "In three years, you're going to be in a world of hurt."
I was right.
Worse than the sub-prime scam is the student loan racket.  If I'd had the foresight and the decision-making ability when I was 20, I would never have signed those promissary notes!
::)

Bring back debtors' prison.  If people have to worry about jail time for defaulting on loans, then they'll be more reluctant to get them in the first place.

Right there you sound like Alec Baldwin in Glengarry Glen Ross!


Why, thank you!  :)


I became a firm believer in "If it sounds too good to be true, it is."


That's the funniest part of the whole mess.  It required self-delusion on the part of those at the top and the bottom of the lending/CDO pyramid.

A bunch of underqualified borrowers -- because they believe the house will be worth more than enough to refinance when the teaser rates expire -- borrow more than the house is worth.

...but at the same time, it couldn't have happened unless a bunch of overqualified lenders -- because they believe enough of the subprime borrowers will be able to make good on their payments to justify a AA or A rating on a tranche of debt -- slaps the rating on the tranche, and the pension fund managers, who ought to be just as able to see through the bull, lap it up.

Like I said, the Emperor has no clothes. The hardest thing to do over the past year was to do more than say it, you had to actually put your money onto it.  Very, very few managers had the guts to do that.


Worse than the sub-prime scam is the student loan racket.  If I'd had the foresight and the decision-making ability when I was 20, I would never have signed those promissary notes!


At least a student loan is a good bet: yeah, there are no guarantees, but the odds are very good that postsecondary (and in some fields, postgraduate/postdoctoral) education will give you enough of a salary boost upon graduation that you'll be able to pay back the loans, with interest, and still have enough money left over to provide you with a good return on your investment.  You don't get a chance to market-time your education -- and since you can't control the timing, and since nobody has perfect knowledge of the markets, investing in your education still gives you a hell of a lot better odds than any market.  (Your education is something you control; market conditions, not so much.)

That's the funniest part of the whole mess.  It required self-delusion on the part of those at the top and the bottom of the lending/CDO pyramid.

That is one of life's little ironies, isn't it?

Another of them is that after a working life of self-employment (and paying way over the odds for mortgages as a result), I'm about to get a full-time job... the thought of remortgaging and getting one of those whizzy deals the banks have never given me now that I'm salaried was a bonnie one... yet now it seems that interest rates are higher than ever, and I'll be no better off... all thanks to a combination of greed and negligence a few thousand miles away.