The Mortgage Insider

Question: What made you decide to write this book?

Question: One of the things that you talk about was the decision to sell your interest in your company more than a year before the industry imploded? What prompted this decision?

Question: You mention that there is a more in-depth story to be told, can you elaborate on some of these things?

Question: Speaking of fraud, you provide some startling statistics regarding the manipulative nature of the broker-lender relationship. Let me make certain I’ve got this correct. In your experience, 70% of all the loans that came into your office to be underwritten were somehow manipulated, fraudulent or deceptive in some manner? Is that correct?

Question: You also point out that the smaller acts of deception can often cause the most damage. How does that work?

Question: Are you saying that 70% of all brokered loans were fraudulent or deceptive?

Question: Along the lines of creativity, you’ve devoted an entire chapter to how creative financing works. From what most of us have read in the media, it seems that a lot of people were just qualified under a stated income loan. But from what you write about, there appears to be a lot more to it. Tell us how creative financing works?
 
Question: You mention that automated underwriting played a significant role in helping borrowers who wouldn’t have qualified to get approved. How did that work?

Question: You devote a lot of time to discussing appraisals and the problems that arose with them. What did you see as the biggest challenge?

Question: From your perspective, how bad was the appraisal problem?

Question: So give us a sense of what you saw in the way of inflated values during your five years in business?

Question: So without getting into the technical details, how did you go about determining a house was overvalued?  




Question: You spend a lot of time in your book on the subject of appraisals and you don’t pull any punches when you talk about the appreciation rate of property values in this country and the roll the lending industry played. You believe that the mortgage industry was a major contributor to the rate that property values increased around the country. How did you come to that conclusion? Isn’t demand what drives value?

Question: Let’s change directions for a moment and talk about a different part of the food chain. Even with all the issues you’ve identified with the lending and brokerage world, you remain adamant that the greatest culprit in all of this is the rating agencies. Why do you single them out?

Question: Explain the role of the agencies?

Question: So what did the rating agencies do to create this problem?

Question: So by rating the securities as AAA, they gave the illusion that these loans were safer than they were?

Question: You mentioned at the beginning that you were motivated by the fact that you wanted to see the industry get fixed. What are your feelings about how things are progressing?

Question: What do you propose should be done with the agencies?

Question: What other types of action do you believe Congress should take?

Question: Another question and this is an area that’s perhaps the most controversial. Congress and the Federal Reserve are calling for an outright elimination of stated income loans, which you believe is not the smart course of action. Why is that?

Question: We’ve all read about the large number of adjustments for ARMs that will take place in the market over the next year or two. What do you see for the future of the real estate market in the near term?

Question: Do you feel any level of guilt or remorse from what has taken place?

Question: What advice do you have for any homeowners who are out there that might be struggling?

Question: If you had to do it all over again, what would you have done differently?