“Lehman Was the Leading Purveyor of Liar’s Loans in the World” — Incidents of Fraud at 90% — “Lehman Sold This to the World”
April 23rd, 2010I also handled issues for the used-car-salesman-type ‘account executives’. Just before I left, the company switched loan origination systems. The people writing these loans were pissed because they were no longer able to get loans approved for people with fraudulent social security numbers. They would actually complain because the system was telling them that the would-be borrower was using a false/fake/invalid SSN.
“The old system never gave me these problems. How am I supposed to get any work done?! I hate this new system.”
But wait, there’s more.
As part of my daily duties, I had to take remote control of the systems that these donkeys were using. Occasionally, (a couple of times per day, at least) I would see the credit summary screens for the loan applicants. The highest credit score I ever saw was something like 615. The lowest was 520. Sprinkled with bankruptcies, unpaid credit cards, default this, late that.
Every once in a while, I’d chuckle and ask the person on the phone, “And this guy can buy a $400,000 house with no money down!?”
Absolutely God damned right!
That’s what this company did. All day. Monday through Friday.
—Life Inside a Wall Street Chop Shop, from 2006
Hint to investigators: Aurora was generating the high quality stuff! The Lehman entities that you should be looking at, if you really want a thrill, are Finance America and BNC Mortgage.
Finance America was rolled into BNC and BNC was rolled into Aurora.
With regard to Finance America, pay special attention to all of the loans that were originated with the ALE Systems software. If you’re looking for the most serious fraud, this is likely where the lowest hanging fruit are located. Somewhere, I have no idea where, there is going to be a record of manual overrides—approvals—on individual loans. Find the people who did the manual overrides (managers on the production floor in Irvine) and ask them who gave them the authority to do that. My guess is that they will have all kinds of interesting information about how that process worked. Prosecutors should be able to very easily follow the path from the base of the pyramid (that production floor in Irvine), all the way up.
Hint to everyone else reading this: Don’t hold your breath for these prosecutions to ever happen.
Have a nice day.
Via: YouTube / CSPAN:
