Relevant:
2007-12-18 — bloomberg.com
``If we had a prime borrower on the line, we hung up on them,'' Buksoontorn says. ``We were geared toward subprime because they were easier to close. We were giving them money no other bank would dare to give them.
...
In 2004, Bohan Group, a due diligence underwriting company, was hired by a bank to double-check the suitability of mortgages written by Quick Loan Funding that the bank was looking at buying and turning into securities. Bohan sent Nicole Singleton, 39, to the Irvine office. She reviewed 40 loans and rejected every one, she says.
We are left wondering if Citigroup is the "devil" the article's headline alludes to.
More great (damning?) excerpts from the article:
``I said I can't do this,'' Aultman says. ``They said take the mortgage, make the payments and once everything is paid off, within 30 days your credit will shoot up 150 points and we'll get you a better rate and everybody wins.''
They convinced him, he says. The company sent a notary to his house with the documents to sign. It was 9:30 p.m. Aultman was worn out from work and the rest of the family was in bed.
Aultman says he didn't see the pre-payment penalty in his contract. If he refinanced within two years, he'd have to pay six months interest.
...
He also says he didn't notice his income on the contract: $5,950 a month. At the time Aultman says he made $3,420.
...
For a $247,500 mortgage, Aultman paid Quick Loan Funding $10,813, including origination fee, application fee, processing fee, underwriting fee and quality control fee, according to his loan documents.
...
Sadek defends charging those fees by saying he took more of a risk by lending to people with such lousy credit. If legislators want to limit fees, they ought to pass laws against them, he says.
Boy, this guy is great at implicating himself. Elsewhere in the article he claims he would "fire employees on the spot" if caught falsifying loan information. Put aside for a minute the implicit argument that Daniel Sadek's all-seeing-enforcement-eye could somehow counteract the boiler-room culture he created: in the quote immediately above he basically says "why should I be good (ethical) unless lawmakers force me to be?"
That kind of dubious rationalization hardly instills confidence that everything was legit at QLF.
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