perpetuated primarily by subprime lenders, it appears that those most at fault for originating, selling and packaging predatory subprime loans are fully back in business. Most now agree that lowered lending standards, predatory loans, and an insatiable Wall Street appetite for packaging loans into investment instruments, all at massive profit margins, led to the 2007-08 implosion of global markets. Now, those individuals most responsible for creating the reckless loans that enabled the crisis have reentered the lending market after facing next to no genuine discipline for their recklessness.
According to The Center for Public Integrity's report Subprime Lending Execs Back in Business Five Years After Crash: "Five years after the financial crisis crested with the bankruptcy of
Lehman Brothers Holdings Inc., top executives from the biggest subprime
lenders are back in the game. Many are developing new loans that target
borrowers with low credit scores and small down payments, pushing the
limits of tighter lending standards that have prevailed since the
crisis. Some experts fear they won’t know where to stop.
The Center for Public Integrity in 2009 identified the top 25 lenders by subprime loan
production from 2005 through 2007. Today, senior executives from all 25
of those companies or companies that they swallowed up before the crash
are back in the mortgage business. Most of these newer “non-bank”
lenders are making or collecting on loans that may be too risky to
qualify for backing by the U.S. government. As the industry regains its
footing, these specialty lenders represent a small but growing portion
of the market."
As always seems to be the case when financial fraud and debauchery are involved, U.S. citizens continue to struggle economically, as foreclosures and joblessness continues, meanwhile, banking executives that engaged in the reckless lending that led to the market collapse are back at it with very little meaningful or realistic consequences. Later this week, I will post the list of the top 25 subprime lenders from 2005 to 2007, whose executives are now fully re-engaged in the loan business.