Wednesday, November 26, 2008

Mortgage Story of the Year

Tom Friedman's article today tells a story from a brilliant and stunning article by Michael Lewis, author of one of my favorite books ever Moneyball.

We all have heard stories about how we got into this mess, the following story will do that rare thing of making you laugh and then get angry when you think about it.

Long Beach Financial (then part of now bankrupt WaMu) was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking homeowners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible.

In Bakersfield, Calif., a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.”

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