Some Out-Of-Work Mortgage Brokers Now Training To Undo The Unaffordable Loans They Once Originated
- NACA is working with borrowers facing foreclosure all over the country, refinancing or restructuring their unaffordable subprime loans. Bruce Marks heads up NACA and now helps retrain former subprime loan brokers. Who better to untangle these unaffordable loans than the brokers who helped set them up, he says. The former brokers understand the "exploding ARM loans" and the "pick-a-pay loans," Marks says. "They are the experts, because they were a part of that industry, and they know that business inside and out."
- "The bottom line is that the lender offered an incentive of
3 percent to the broker if they put [a client] into that particular loan," [broker Amber] Barbosa says. On a $500,000 home in California, brokers could make $15,000 to $20,000 or more in kickbacks on every single one of these risky loans. "Obviously, tons of people got pushed or thrown in that direction," Barbosa says.
- According to [broker Anthony] Narag, an account executive from the now bankrupt lender New Century told brokers like him not to worry about that letter. "He would tell people, 'I have a CPA in my back pocket if you need one,'" Narag says. Narag says that meant he could get brokers bogus accounting letters so that fraudulent loan applications could get approved. New Century declined to comment for this story.
- Narag says he also observed brokers printing fake bank statements or other income documents, and that there was a black market for these items. Everybody — including the lenders and banks buying these loans — looked the other way, Narang says, because the money was so good.
For more, see Ex-Subprime Brokers Help Troubled Homeowners.
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