"Baseball Bat" Intimidation Used At New Century, Says Former Employee

A recent Washington Post story describes the "pressure cooker" atmosphere experienced by in-house appraisers and underwriters at New Century Financial Corporation to approve loans where the underlying documentation for the loans "had problems."

The article is reportedly based on accounts from former New Century rank-and-file workers who worked at five different branches that handled subprime loans all over the country. In agreeing to give interviews for the article, all except one former employee spoke on condition of anonymity, citing recent e-mails from the firm telling them not to comment publicly.

Among the details in the story was the reported use of yelling and slamming desks with baseball bats by salespeople (who worked on commissions) when one in-house appraiser rejected their deals. According to one former employee whose job it was to approve or reject the loan documentation on pending mortgage applications:

• “There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals.”

Reportedly, "the pressure to meet [...] expectations was so unrelenting that a worker in Foxboro, Mass., collapsed from stress and was taken to the hospital."

For more, see Pressure at mortgage firm led to mass approval of bad loans (reported at the Florida Association of Realtors website).

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