Book Review: Confessions of a Subprime Lender
Interesting looking book flagged by the WSJ, called Confessions of a Subprime Lender.
The story is told by Richard Bitner, who founded his own subprime mortgage company right as the industry was taking off. Over five years, the company boomed.
Confessions of a Subprime Lender is his insider story -- disillusionment, fraud, greed, ignorance. A year after he gets out and leaves the industry, sub-prime imploded.
From the publisher: "Woven throughout his personal industry experiences is the fascinating story of how an industry started out helping disadvantaged customers buy houses, but soon lost its way due to greed, lack of financial control, and willful ignorance. This book reveals the truth about how various parts of the mortgage business yielded to the temptation to maximize profits, weakening the chain that held the system together."
The book covers:
Why nearly three out of every four mortgages were misleading or fraudulent;
How unscrupulous brokers tricked lenders and gullible borrowers;
How brokers and lenders turned unqualified applicants into "qualified borrowers";
Why Wall Street and the rating agencies are largely to blame for the collapse;
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Funny, nothing mentioned in the book about Predatory Borrowing.
Quotes:
"Bitner's thorough review of the subprime lending industry provides a behind-the-scenes look at the mortgage mess. From the broker on Main Street to the investor on Wall Street, it's an unabridged version of what went wrong and how it needs to be fixed." —Bill Dallas, founder, First Franklin Mortgage, one of America's largest subprime lenders, before it collapsed
"This is an in-depth, eye-opening examination of the problems impacting the housing and mortgage markets." —Matthew McIntyre, CEO, Puritan Financial Group, Inc.
This is definitely on my shortlist of Housing books to read . . .
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Sources:
Confessions of a Subprime Lender
Richard Bitner
Wiley, 186 pages, $19.95
Money for Nothing
JAMES R. HAGERTY
WSJ June 25, 2008; Page A13
http://online.wsj.com/article/SB121435152605601613.html
Monday, June 30, 2008 | 07:30 PM | Permalink
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Comments
I've read the first 40 pages or so at lunch today. Very folksy style, will be a fast read. He does give examples of what could be considered predatory borrowing, but thus far kind of portrays the people doing it as "Duke boys"--never meaning no harm (my characterization not his).
Most of the subprime mortgage brokers he worked with all sound like they could have doubled as bail bondsmen too.
Posted by: dingojoe | Jun 30, 2008 8:06:53 PM
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