Closing Bell: Architect of Subprime Crisis Dies
Roland E. Arnall, the founder of the Ameriquest Mortgage Company, died earlier this week. Arnall, whose personal fortune was pegged at $1.5 billion by Forbes last year, was a top donor to the Republican party and was named the U.S. Ambassador to the Netherlands in ’06. Ameriquest, which went out of business last August, was…
Roland E. Arnall, the founder of the Ameriquest Mortgage Company, died earlier this week. Arnall, whose personal fortune was pegged at $1.5 billion by Forbes last year, was a top donor to the Republican party and was named the U.S. Ambassador to the Netherlands in ’06. Ameriquest, which went out of business last August, was one of the largest subprime lenders in the country and was the target of dozens of lawsuits over its allegedly deceptive lending practices. Arnall was 68.
Roland Arnall, Mortgage Innovator, Dies at 68 [NY Times]
BrooklynDouche
How do you define financial risk vs. system wide fraud that built nothing except the general population’s appetite for buying things (many useless) that they don’t need.
Here’s how I define proper alignment of financial risk with rewards. Promote investment in medical research and technologies. Promote green policies and reward those individuals and companies that risk their capital for such.
Selling high yield securities backed by questionable to non-existant cash flows does nothing except reward the pillagers with profits. It degrades our valuations, morals and misallocates resources.
intelligent response. hopefully the investment in your home is yielding better returns than the investment in your education.
BrooklynDouche
3.20 9:25pm – i don’t know what blog you’re reading b/c that’s exactly what the posts above started out saying. if you want to come off that and call him a facilitator/enabler/whatever that’s fine but it’s still a silly proposition. see nra analogy at 3.20 8:11am. if you want to live in an economy where the govt completely deprives its citizens of the freedom to take financial risk (and reap financial reward) you’ve picked the wrong country.
BrooklynLove… nobody said Greenspan was responsible for deceptive lending practices. Go back and read the words. But he certainly was an enabler. His Mr. Magoo act was a fraud – he knew the deal, and knew that people stupid enough to buy into bad loans would get screwed eventually. He bears some responsibility.
3.20 10:25 – you’re making no sense. the fact that investment banks were buying and securitizing pools of loans doesn’t make them responsible for (a) lenders who chose to delude borrowers or doctor apps in order to pump out loans in return for $ or (b) borrowers who chose to game the mortgage system and housing market unsuccessfully. a hungry mbs market can be blamed for low conforming fixed rate mortgage rates if you need to blame something on wall street. your logic makes no sense at all. and i have no idea where you’re going with this whole pulling out angle. wall street stopped buying up loans when the secondary mbs market seized and it was impossible to do a trade. what should they have done at that point in your opinion? once spreads narrow, that market will pick up again. re bear, your comment is simply stupid – if there was no surprise by a death run on bear then it would’ve never happened in the first place b/c the fed would’ve made their window available to ibanks before that happened instead of after that was no longer possible for bear.
I can’t believe I am saying this, but I agree with the What.
Many did not know the game. I don’t think that you appreciate how truly financially ignorant the vast majority of people are.
They might have known that their cash flow in 1.5 to 2 years from now would be too much for their income but they assumed then they could refinance again and that their house would be worth more. They didn’t care if fees were being tacked onto their principal as long as they could stay out of the hole and they certainly had no clue that this was like a roulette wheel and the losers would be the investors chasing yield where they thought the risk was managed through diversification and the common folk.
Bear’s management was in too deep – their business lines were apparently not diversified enough. Even if they did forsee this – as a major market maker, originator, financier to hedge funds they couldn’t bail on the industry.