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]
brooklynlove — 8:45pm responding to your rant. Explain who funded Countrywide and the others – if not wallstreet. Without the funding the (subprime) market tanked and all of the loan applications that were in the pipe around January 2007 were pulled and those with bad credit and the flippers were doomed because they couldn’t go conventional. BTW – the entire flipping industry was built on the subprime market – over the last 10 years. If fact ask someone in the (predatory) mortgage business — if they are honest – they will tell you exactly when the “good times” ended — it was when wallstreet pulled the funding and stopped the cycle.
On a few side points, I am part of corporate america – so I don’t hate it – I just understand it — no funding – no subprime market — period. Also, I question how deceptive the lending really was — of course many were confused by the numbers and didn’t hire lawyers to conduct their closings and simply relied on the bank attorneys to explain the details, but, equally, many knew “the game” and were aware they wouldn’t be able to afford the mortgages once they “adjusted”. Also, because money was so “free” several “sub-primers” purchased multiple properties and are now taking advantage of the system and trying to get out by way of the “short sale” vehicle. Nothing wrong there. I have no response to your Bear Stean comment – other than the warnings were present for several months and wall street was not surprised.
I think that Greenspan got caught up in the celebrity of himself that this society is so expert at creating. He was so revered as the genius of our time and did act brilliantly and boldly with rate cuts at the right time; however, a slight blip and rates are cut and money is flowing. The Fed directly oversees lending practices of banks including sources and uses of funds and predatory lending. The size of this debt and overall contribution to the supposed “growth” was a clear red flag. Where will the growth come from now(watch out for the commodities scams). The fees and other income being generated was too overwhelming to question yet was so overwhelming and therefore should have been questioned. Why does it have to come to the point where it is so catastrophic – why is the notion of flat growth so unacceptable.
I looked at houses in CH/CG/BH in the late 90s. They were selling for about 500-700K. How can one possibly explain 400% + appreciation in less than 5 years. I bought one and can still admit this.
What – if your position is that greenspan is to blame for predatory lending then i think you’re lost. fraudulent originators are to blame. by your logic the nra would be responsible if someone breaks down your door today and puts a cap in your ass.
Brooklyn is like Manhattan’s mildly retarded sister who gives everyone hand jobs.
The What is like a crackhead Kevorkian.
Roland E. Arnall: a true American patriot
BrooklynLove Greensprem encouraged interest only mortgage in 2004. Just Google it. I know BrooklynLove you are seeing you “asset” slip away. Thats why you post stupid fucking shit. The FED looked the other way and predatory lending took off. 65%% of the people who got mortgages last year cannot get one today! You know why assfuck? The math doesn’t add up!!! BrooklynLove please kill yourself if you need help call me.
The What
Someday this war is gonna end….
8:22 – that’s the monday morning quarterback explanation. i want to hear how he caused subprime lending, not how he failed to stop it b/c i can point to many others in capable positions who failed to stop it. and if you’re answer is going to be low interest rates, then explain how else he should have addressed the sharp downturn in the economy at that time.
8:45 – that’s the retarded blame wall street explanation, actually your inclusion of the pull the plug piece makes it retarded+. question for you – if i’m willing to pay you a lot for sony flat-screens, is it my fault if you strip panasonics and re-brand them? from your comment, it’s obvious that you have no idea how the mortgage securitization market works or how deceptive lending infected the diligence process. anyway, your golden parachute comment makes it pretty obvious that you’re just trying to hate corporate america. how do you think alan schwartz is making out in the bear collapse? the answer would be not well. and many of bear’s employees are getting crushed, so get a clue and shut your ignorant hole.
Don’t blame Greenspan. Blame wallstreet. The entire subprime market was funded and created by wallstreet. When wallstreet knew that the exotic mortgages (in various forms), especially, the “so-called” stated income mortgages were heading towards their balloon payment point, all at the same time, without the hope of a re-fi at a reasonable rate — they pulled the plug on or about January 2007. By pulling the plug — without a gradually withdrawal of funding — wallstreet created the crisis. With no chance of a re-fi, due to bad credit, the buyers defaulted – mortgage backed (packaged) securities thus became worthless and b-firms took the losses. BTW – this was all anticipated by wall street when the first subprime mortgage was written. It was inevitable, and those at the top were prepared to take their golden parachutes and cashing out. The question is — what investment vehicle is next to restart the cycle. Greenspan’s control over monetary policy couldn’t control wallstreet, wallstreet controls monetary policy.