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Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance

Author : Richard Bitner Number of Pages : 208 Publisher : Wiley

Product Description

Former subprime lender Richard Bitner once worked in an industry that started out helping disadvantaged customers but collapsed due to greed, lack of financial control and willful ignorance. In Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance, he reveals the truth about how the subprime lending business spiraled out of control, pushed home prices to unsustainable levels, and turned unqualified applicants into qualified borrowers through creative financing. Learn about the ways the mortgage industry can be fixed with his twenty suggestions for critical change.

Customer reviews

Nontechnical yet thorough overview of What Went Wrong by .. D. Dorset (Nashville, TN)
I spent a weekend with Richard Bitner's book, hoping to find a more in-depth look at all sides of the current mortgage crisis. I had read plenty of articles, but the narrow focus in each write-up made it hard to carry the information from one story to the next. Bitner's book was exactly what I was looking for. He lays out in plain English how the subprime lending system works, and how it transformed into the dangerous and sprawling entity that wiped out the fortunes of so many people and corporations.




Bitner's understanding of the industry is remarkable, but he still keeps his book focused towards the layperson. Every aspect of the subprime lending process is spelled out with nice figures and plenty of review in later chapters. He even goes so far as to suggest ways to fix the lending industry, but I don't know enough to give a worthwhile evaluation of his suggestions.



What really struck me at the end was how so many little perversions in the system, so many people using a wide variety of dishonest tactics to help them take a little bit more than their allotted share, eventually caused the whole system to run off the rails. There was dishonesty and greed at every step of the process, and these little cracks in the facade eventually brought down the castle. Absolutely fascinating.

Great Book if you want to understand the Mortgage/Real Estate Mess by .. R. Contreras (WPB, FL)
This is a great book that explains in detail the excesses of the Mortgage Brokers, Realtors, Appraisers, Investment Firms, Rating Agencies, Lack of Government Oversight (Regulations) and Finally Consumers. The Book gives readers an in-depth view of how all the players manipulated the system to make a quick buck without any regards to the long term health and well being of their corporations/communities and/or fellow citizens. The "Democratization" of Finance is also explained very well in the chapter that talks about the Rating Agencies and Wall Street and the reasons why these guys should not be allowed to run the show ever again. The book also explains how with the excuse of Free Markets and Self-Regulating enterprises the Wall Street crowd was a prime contributor to the credit crisis. Greed at its best and making Chicken Soup out Chicken Sh_t are explained in detail. The Five Main take ways from the book are: 1-NEVER believe a Realtor, 2-NEVER believe a mortgage broker, 3-NEVER believe an appraiser, 4-NEVER believe everything Wall Street and Rating Agencies have to say and 5-Regulations as much as people like to decry them, are there for good reasons.

Doesn't get better than this by .. C. Blakely (Washington, DC)
To be honest, I was a little skeptical reading a memoir of the mortgage meltdown from a 6'4'' tall subprime lender with a thick goatee. However, after slowly creeping into the tales and unfoldings of Bitner's subprime lending company, my prejudgment began to fade and I was hooked. While allowing a smooth mixture of anecdotes from the subprime industry coupled with detailed descriptions of a few of the first mortgage backed securities which were sold to investment banks, there is a good chance that Bitner's book is most likely the best on the market for the mortgage and real estate non-savvy. Being a fairly easy and quick read (I read it on a plane ride from San Diego to Washington, DC), I learned more about the failing credit market reading this book than the likes of Philips' "Bad Money" and Morris' "Trillion-Dollar Meltdown". Bitner's description of how mortgaged backed securities are packed and sold from start to finish and how the incentives of credit rating agencies are completely lost and tangled up due to greed couldn't be more informative as well as entertaining.




One would tend to be swayed into thinking that Bitner lets himself and other subprime lenders off the hook in terms of being caught between greedy investors thirsty for more MBSs to tranche up and sell off and the sleaze-ball mortgage brokers looking everywhere they can to sell a corrupt loan package. However, we see clearly that when a mortgage broker commits fraud, the lender must prove it to make the broker buy the loan back; a nontrivial task requiring much capital. Thus, fraudulent brokers were simply denied business. The investment banks above the lenders who bought the mortgages only needed proof that fraud has occurred to force the originating lender to buy it back; an unfair disadvantage for lenders as Bitner tells us he found over 70% of brokered loan applications submitted to his firm were fraudulent, forged, or false. The real problem of the subprime meltdown? The sleazy mortgage brokers.



Quite an entertaining read of our latest financial disaster while being thoroughly educational. Bravo Mr. Bitner.

Descriptive, but lacking by .. another opinion ()
This book will basically confirm what you already know about Subprime loans, if you believe that lots of people knew the system was broken, but chose to look the other way because it was profitable. The author talks about how the system encouraged and accomodated fraudulent players, while "consciencious" players (such as the author's firm, of course) played by the rules and remained completely above the fray. The author was shocked by the behavior of other subprime middlemen, but his company made millions and grew due by focusing on these types of loans.



It's a quick read, and useful if you know nothing about the industry, as it identifies the basic players participating in the provision of subprime loans, and their functions. I suspect you could get as basic a primer on the internet for free, without the specific examples provided of system abuses.

prime time truths by .. John Garibaldi (Camano Is. , WA)
I liked the book, and it reminded me of how greedy and corrupt


human nature has become, all in the name of the almighty dollar.

This has been an extraordinary demonstration of pyramid schemeing

to the nth degree.