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Report: SubPrime Lenders That Sparked Crises Received Bailout Money
By Racheli | May 8, 2009
The days of solely blaming subprime lending for the housing collapse are far behind us (I hope), but the risky, high-cost lending certainly played a hand in the mortgage crisis.
The Center for Public Integrity released an interesting report documenting the actions of so-called “mega-banks,” which supported such lending that set off a global economic meltdown.
Unsurprisingly, 21 of the top 25 subprime lenders were financed or owned by banks that received TARP money.
Investment banks Lehman Brothers and Merrill Lynch both owned and financed subprime lenders, while others like Credit Suisse and Goldman Sachs were major financial backers of subprime lenders.
Nine of the top 10 subprime lenders were based out of California, along with the top five, which include Countrywide Financial, Ameriquest Mortgage, New Century Financial, First Franklin, Long Beach Mortgage.
Of course, twenty of the top 25 subprime lenders have either closed shop, stopped lending, or have been sold to avoid bankruptcy.
Eleven lenders on the list have had to make payments to settle claims of widespread lending abuse, including four who received bailout money regardless.
Check out the list below detailing the insane loan volumes of “high interest” mortgages between 2005 and 2007; you’ll notice many of the names are no more.
Courtesy of www.TheTruthAboutMortgage.com
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