A Banker Speaks, With Regret

[groovedaddy]

If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the country’s housing mess.

As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were “no documentation” mortgages.

“On the application, you don’t put down a job; you don’t show income; you don’t show assets,” he said. “But you still got a nod.”
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One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?nl=todaysheadlines&emc=tha212

[Ship of Fools]

1. Absent jail time, regret helps.

:sarcasm:

[Uncle Joe]

2. I would say this was probably a motivating factor.

One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

But who could've possibly foreseen what would happen?:shrug:

I also wonder how much commission was made on the secondary market when they bundled those subprime loans and sold them to investors, state pension funds and such as AAA paper and has anyone been indicted or prosecuted for this institutional fraud yet?

Thanks for the thread, groovedaddy.

[xchrom]

3. +1

[underpants]

4. Great article

rec'd

[katty]

5. yup, a friend of mine was at BofA a few yrs back and they

pushed them to make loans with less income info than you need to purchase a new car, or big loan-happily they quit BofA.