Wow. Reuters has this look today at the “path of destruction” left by risky mortgages.
Check out the doggedness of this broker:
On September 15, 2004, the clock was ticking on Lelon DeWitt’s life and his subprime loan.
When the transmission repairman underwent open-heart surgery, he told his mortgage broker he didn’t want a housing loan that was in the works.
“I didn’t know if I was going to be dead or alive,” DeWitt later recounted.
But the mortgage broker, Troy Musick of Wholesale Mortgage Co., was so eager to clinch the deal, he followed the couple into the hospital, said DeWitt’s wife, Ruth DeWitt.
As a surgeon cracked Mr. DeWitt’s chest open for a quadruple heart bypass, the broker approached her in the waiting room of Elkhart General Hospital in Elkhart, Indiana.
“It’s now or never,” she remembers him saying.
Afraid of losing out on the chance to buy a home, she left the hospital and signed the loan documents. Lelon DeWitt survived the surgery, but not the $143,400 loan from Irvine, California-based Argent Mortgage.
That kind of stubbornness among mortgage brokers during the housing heyday earlier this decade was documented in a must-read story in yesterday’s Washington Post. The reporter, David Cho, describes a scene from one of the offices of New Century Financial Corporation, the now infamous poster child for the subprime mortgage meltdown.
Maggie Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!
“‘You cut my [expletive] deal!” she recalls one man yelling at her. “‘You can’t do that.’” Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said.
But “you didn’t want to turn away a loan because all hell would break loose,” she recounted in interviews. When she did, her bosses often overruled her and found another appraiser to sign off on it.