April 13, 2014

Great moments in Community Fulfillment

From Lost Bank by Kirsten Grind, the story of Washington Mutual (a bank I profiled at length in VDARE in 2009), here's an account of WaMu's President's Club mortgage sales conference in Hawaii in 2006:
Meola's next award recipient was Tom Ramirez, a WaMu loan consultant who had become a mortgage lender legend in Southern California. Ramirez worked out of WaMu's office in Downey, a largely Hispanic neighborhood of cracked sidewalks and graffiti-marked homes, east of downtown Los Angeles. WaMu called the Downey officer a Community Fulfillment Center, the bank's name for home loan branches that served minority communities. Those centers often used even looser guidelines for making loans, allowing lower credit scores and less income documentation. Ramirez specialized in Option ARM lending.  
... He had pioneered a program that allowed real estate agents to collect referral fees for sending clients to WaMu. Those agents made 1 percent off the total loan cost, which the borrower paid at closing. (Whether the borrower knew this remains unclear.) Real estate agents loved the idea. They arrived in Downey from all over Los Angeles with loan applications. Because the program proved so successful, Wa Mu expanded, filling a neighboring building with more loan processors. 
At WaMu ... also had a stellar reputation. ... [CEO Kerry] Killinger had singled him out for praise, lauding his work with minority borrowers. ... Ramirez and his loan consultants wanted to approve borrowers with lower FICO scores, bypassing a senior underwriter's approval, and allow assets to count on a loan application, even if they weren't yet in a customer's account. By counting money in a bank account before it was deposited, for example, a customer might qualify for a loan even if the money ultimately didn't show up. [COO Stephen] Rotella didn't think Ramirez's demands were unreasonable. "I met them last year and I was so impressed, I suggested we use them to spawn similar operations in Hispanic communities across the U.S., if possible using them to model, train, and certify the work," Rotella write in a glowing e-mail about Ramirez and his team, which also questioned [David] Schnieder for failing to meet the group's demands. "Frankly, not much has happened," Rotella wrote. "We should fall all over ourselves to have a business segment that attracts minorities, is almost all Option ARMS, is not price driven, delivers great quality, and is oriented toward the average guy, our market." 
For 17 straight years, Ramirez had received one of the highest honors at the President's Club, the number-one loan consultant. He had funded more units than any other WaMu office nationwide. In 2005, he made more than 2300 mortgages, a feat announced that night at President's Club. ... 

At prices prevailing in 2005 at the peak of the bubble, 2300 mortgages would be about $1 billion dollars. That's ten million dollars in kickbacks paid to real estate agents.
"In our world of superstars, he is bigger than a Brad Pitt, George Clooney, or Tom Cruise. He's at the Henry Fonda, Burt Lancaster, John Wayne legendary status," Meola said in announcing Ramirez's award. 
Several months earlier a disturbing internal report had come out about the quality of the loans made in the Downey branch, as well as that of another Community Fulfillment Center in the neighboring East Los Angeles city of Montebello. For three years, rumors had circulated at WaMu about fraud in the two locations.

Never trust Montebello. I had my 7 and 9-irons stolen at the Montebello municipal golf course ten years ago. I've often left a couple of unused irons on the tee of a par 3 like that, but every other time some fellow golfer behind me brings them along. It's not like a couple of random golf clubs are worth much to the thief (but it's very expensive for the victim to replace them with clubs that match the rest of his set). Montebello is the only golf course where my clubs have vanished.
... In the summer of 2005, WaMu launched a review of the mortgages made in Downey and Montebello. The review found an "extensive level of fraud," as was later noted in an email circulated among mangement. Among the hundreds of loans that borrowers had received from the Downey office in the previous two years, nearly half contained fraud. At Montebello, fraud rates exceeded 80 percent.

Not too mention golf club theft rates. But I'm not bitter ...
All of it, the reviewer wrote in the email, was "attributable to some sort of employee malfeasance or failure to execute company policy." The fraud was outrageous, even in the age of bloated incomes on mortgage applications and false bank statements.  
On one loan application, everything about the buyer was made up ... "The credit package was found to be completely fabricated," the review concluded. ... 
The fraud report had come out not long before President's Club, yet here was Tommy Ramirez, the top producer not only in the Downey office but in the country, walking up on stage to shake Killinger's hand accept his trophy. Of loans that had been referred to Ramirez, 58% contained fraud, a rate that one WaMu executive would later describe as "eye-popping." 
Luis Fragoso, another high-volume loan consultant at the nearby Montebello office, posted a fraud rate of 83% for loan referrals. He was also honored at President's Club. 

Not the Montebello Municipal Golf Course
I'd assume Fragoso was the guy playing behind me at the Montebello muni who stole my clubs, except he probably plays only at the Fazio-designed Ocean course at Pelican Hill.
"No one in history has put more people into their first home," said Meola, up on stage. "Please put your hands together for an extraordinary man, Tom Ramirez!" The audience cheered. In 2005, WaMu made $3.4 billion in profit.

Of course, a lot of that "profit" was not exactly cash flow, but was instead deferred interest on negatively amortizing Option ARM mortgages.

Here's another classic WaMu TV commercial from the series that was playing on TV as they went belly-up.
     

51 comments:

Anonymous said...

Any thoughts about the KC shooting? Looks like the SPLC got one right.

Anonymous said...

Ramirez worked out of WaMu's office in Downey, a largely Hispanic neighborhood of cracked sidewalks and graffiti-marked homes, east of downtown Los Angeles. WaMu called the Downey officer a Community Fulfillment Center, the bank's name for home loan branches that served minority communities. Those centers often used even looser guidelines for making loans, allowing lower credit scores and less income documentation.

And here I thought NAMs were discriminated against and not given loans as readily as whites.

Anonymous said...

SPLC's file on the shooter: http://www.splcenter.org/get%20informed/intelligence%20files/profiles/Glenn%20Miller#.U0s8Ga9Dftc.twitter

Anonymous said...

Any thoughts about the KC shooting? Looks like the SPLC got one right.

At least two of the victims Sunday attended a United Methodist Church. I wonder if this will get picked up in the narrative.

Anonymous said...

Looks like after Mr. Ramirez left WaMu in 2008, he started a new job at Primary Residential Mortgage in January 2010, and now works at something called imortgage, whose slogan is, "We have a loan for every home...simple as that." His linkedin is https://www.linkedin.com/in/tomram

Anonymous said...

Looks like the SPLC got one right.

The shooter had such a long and public history of crazy that the SPLC can hardly have said anything about him that wasn't blindingly obvious.

Anonymous said...

"That's ten million dollars in kickbacks paid to real estate agents."

An agent's dream. Find an unqualified buyer, haul them in and get them a mortgage, get the commission and one percent on top.

Grey Enlightenment said...

I remember the commercials. Wish I had shorted it ..would have made a tidy sum

Anonymous said...

I remember the commercials. Wish I had shorted it ..would have made a tidy sum

I did short a company that had that crap in their MBS tranches and am now enjoying a comfortable early retirement. Thanks Crystal River!

Anonymous said...

Asking why some people would bother to steal your seven iron is like asking Sir Edmond why he would climb Everest.

Gilbert P

Anonymous said...

http://www.newrepublic.com/article/117335/mad-men-premieres-matthew-weiner-overrated

Anonymous said...

This sort of white-collar crime is more damaging to the country than regular violent crime, yet it goes mostly unpunished.

Anonymous said...

That's ten million dollars in kickbacks paid to real estate agents


The real estate "business" has always struck as being run by the sort of people who make the drug cartels appear honest and respectable. It's a scam from top to bottom.

Anonymous said...

"What is the crime of robbing a bank compared with the crime of founding one?"

Anonymous said...

OT:

Asians at Sands Bethlehem casino 'ride bus to live'

http://articles.mcall.com/2014-03-29/news/mc-sands-bethlehem-asian-bus-20140329_1_casino-bus-sands-bethlehem-sands-casino

Anonymous said...

The shooter had such a long and public history of crazy that the SPLC can hardly have said anything about him that wasn't blindingly obvious.

He was even once a guest on the Howard Stern Show.

Anonymous said...

Lady wears a hijab in public as part of a psychology class expecting white people to become overtly racist and nasty. Finds out people actually treat her NICER. Conclusion: White people are tricky devils. #microaggression http://www.dailymail.co.uk/news/article-2603480/Canadian-college-student-experiments-wearing-hijab-finds-people-NICER-her.html

randomizer said...

Pelican Hill is a gorgeous resort. When I stayed there a few years ago for a business conference, the most striking thing to me was the "complexion" of the staff -- all white. Young white kids were employed in the lower-end jobs, which would normally be filled with Hispanics.

It's no wonder the rich don't think there's too much Hispanic immigration. With the exception of their own maids, gardeners, etc., they never see them.

not a hacker said...

I've never been tempted to take anyone's golf club because I don't like to garden, and y'all use such grateful oversized garden implements.
Real men play blades.

Anonymous said...

Why not bring the clubs with you? The next tee will be somewhere around the green you hit to. So why would you do this?

peterike said...

Tommy Ramirez: a one man community wrecking crew.

And yet another example of a NAM exploiting their own community.

Anonymous said...

Hundreds of thousands of homes got built in the suburbs and exurbs. Banks like WaMu go under providing loans to fill them while politically connected banks get bailed out. Now the extra housing supply sits there waiting for buyers at cheaper prices. Will HUD be getting the bargains? Will property management companies who rent houses out be getting the bargains? They love Sec8 vouchers for those who dont know. Will the amnestied be getting the bargains if Paul Ryan and a couple of California Republicans in the House can sneak it through attatched to funding legislation ( they have tried according to Vdare)?
In 20 years this may be seen as a success story by the left on how the suburbs got diverse and the choice parts of many cities got gentrified, while many public housing eyesores got torn down. Im watching it in slow motion in my MSA.

Anonymous said...

Hey Steve, if you do a search for name on Google now, it will bring up other people like yourself that have similar viewpoints: John Derbyshire, Peter Brimelow, etc... accompanied by photos. However the picture of Gregory Cochran is not the Gregory Cochran we know, it's some crooked lawyer from Houston, Texas. Google is putting this guy's face to Gregory Cochran's bio. Another example of someone at Google covertly grinding political axes?

doombuggy said...

Luis Fragoso, another high-volume loan consultant at the nearby Montebello office, posted a fraud rate of 83% for loan referrals. He was also honored at President's Club.

83%? Some people get sent to the lower levels of Hell. And some people are warmly greeted by Satan and given a seat next to the throne.

Anonymous said...

http://www.linkedin.com/pub/luis-fragoso/18/b9a/189

Fragoso is still doing the same crap, with a smaller outfit.

dark matter said...

You were golfing in Montebello? What, does their course have a nice scenic view of the Long Beach Freeway?

#BoycottMontebelloLinks said...

The tragic decline in golf etiquette continues apace, whoopty-do; tell Paulina Gretzky about it. Some people have real problems to worry over, you know, like the denizens of Washington D.C. who might get nuked any moment now

Anonymous said...

Anon at 8:52PM found Tom Ramirez's LinkedIn page, here is Luis Fragoso's:

http://www.linkedin.com/pub/luis-fragoso/18/b9a/189

Let's underscore the fact that none of these illegal mortgage brokers ever get a slap on the wrist (and probably never lost a night of sleep). No executive at WaMu ever got a slap on the wrist (Killinger and a couple others went before Congress to have Carl Levin frown upon them) - It's so infuriating to read this stuff. I think of all the people in jail for minor things or the countless people who have hardships or disputes with the IRS or got socked with six figure hospital bills, etc. Then I see these people who are willingly responsible for thousands of fraudulent mortgages, indirectly sending the economy into a tailspin, and all I can think of is that they must really love their 5 car garage.

Maxwell Power said...

Any thoughts about the KC shooting? Looks like the SPLC got one right

What's their batting average

Svigor said...

Looks like the SPLC got one right.

They called him a card-carrying Democrat?

Sgt. Joe Friday said...

"...in Downey, a largely Hispanic neighborhood of cracked sidewalks and graffiti-marked homes."

Downey used to be a nice, middle class white suburb, home to Karen and Richard Carpenter, and oh, I don't know, maybe 50,000 good paying aerospace jobs. IIRC, the Saturn rocket for the Apollo program was build in a plant in Downey.

To a large extent, you can trace the demise of middle class southern California to the end of the Cold War.

Anonymous said...

I like this one:

http://www.youtube.com/watch?v=laot_Eomr3s

"The uncertainty of getting a home loan made Paul irritable - then he went to Washington Mutual - thanks to their flexible lending rules, Paul got quick approval"

"FLEXIBLE LENDING RULES" wink wink

Anonymous said...

Ramirez worked out of WaMu's office in Downey, a largely Hispanic neighborhood of cracked sidewalks and graffiti-marked homes, east of downtown Los Angeles.

I may be unkind to Ms Grind here but when reading that kind of thing I usually take it as a subtle implication that, somehow, cracked sidewalks and graffiti-marked homes are merely an act of God endured by those Hispanics. Rather than the Hispanics themselves in any way being the agents of that environmental degradation.

Anonymous said...

He ran for office as a republican too. Did you know him online?

Anonymous said...

I knew a guy from Montebello.

He's now a venture capitalist in Palo Alto, after having graduated from Sloan MBA and before that Harvard College with a CS degree.

Oh yes -- he's also ethnically Chinese (via Central America).

As I've learned from Steve over the years, it's not too surprising that ancestral genes and culture win out over environment.

In contrast, liberal members of the media like to write about places as though there's something inherent to a particular place that makes it "violent" or "rough."

Steve's ascribing untrustworthiness to Montebello, as a place, was a momentarily unexpected echo of the liberal media.

Steve Sailer said...

Montebello will eventually gentrify. It's extremely conveniently located and it has the kind of rolling hills that Angelenos love. The golf course is pretty nice -- it's from 1928 and is fully treed and has a few fun downhill holes. I wouldn't be surprised if it becomes a second Whittier (Nixon's old town), which is where wealthy Mexican-Americans now go. But I haven't been there in years so I'm not up to date.

Maxwell Power said...

He ran for office as a republican too. Did you know him online?

A change little noted and not long remembered. For infamous North Carolina Republicans of the late 80s he might crack the top 500 list. Anyway he was obscure outside white supremacist/SPLC circles until his big break with that Howard Stern interview

sphere said...

Steve's ascribing untrustworthiness to Montebello, as a place, was a momentarily unexpected echo of the liberal media.

So I take it you've never been to Montebello yourself and observed the large metallic graffiti-riddled placards at the freeway exits reading "STATE PRISON / DO NOT PICK UP HITCHHIKERS / DO NOT LEAVE GOLF CLUBS UNATTENDED"

Anonymous said...

Steve likes to combine his politics blog and his Yelp profile into one convenient site

Steve Sailer said...

Not that I'm bitter or anything ...

the agony and the ecstasy said...

Google is putting this guy's face to Gregory Cochran's bio. Another example of someone at Google covertly grinding political axes?

Yeah, they also have a whole division in Redwood City devoted to hurting Sailer's pagerank for "the distinguished Senator from Hadassah" and other very commonplace queries that otherwise would be on every revolutionary's lips. In the old days he got blackballed by William F. Buckley -- or Bob Bartley, or Bob Barker; can't recall -- today he's being airbrushed out of existence by Eric Schmidt (though some might consider this an upgrade)

Steve Sailer said...

But there was the time I came to the 18th hole at Oak Quarry needing a birdie and hit a big drive down the middle and could see the ball rolling past the 150 yard marker and stopping 145 yards from the pin: a perfect distance for a smooth 7-iron. But somebody in Montebello (most likely the entire Washington Mutual executive staff from Kerry Killinger on down) had stolen my 7-iron, so I had to try to crush an 8-iron. The shot was dead on the flagstick all the way, but would it be long enough?

No -- it caught top lip of the front bunker.

Steve Sailer said...

Also, Angelo Mozilo was probably in on the 7-iron heist, too.

Just sayin' ...

Anonymous said...

An super-PC white colleague called Whittier the "Hispanic Beverly Hills."

Anonymous said...

Also, OT:

http://www.slate.com/articles/health_and_science/science/2014/04/what_do_sat_and_iq_tests_measure_general_intelligence_predicts_school_and.2.html

Anonymous said...

http://www.slate.com/articles/health_and_science/science/2014/04/what_do_sat_and_iq_tests_measure_general_intelligence_predicts_school_and.html

Anonymous said...

Funny how California played such a big role in WaMu's downfall. Is it possible the Washington-based executives couldn't fathom the rampant fraud in SoCal because that kind of stuff wouldn't fly in the Northwest? I don't want to believe they were that naive, probably obscene greed.

Steve Sailer said...

I've thought the same thing. If WaMu had stayed in the Northwest, they'd be around today. It was their three huge SoCal acquisitions: Roland Arnall's subprime Long Beach mortgage, Ahmanson, and Golden West that did them in. The latter two were good S&Ls when WaMu bought them in the late 1990s, although anything Arnall touched was sleaze.

Anonymous said...

Reading Roland Arnall's Wikipedia page:

http://en.wikipedia.org/wiki/Roland_Arnall#Ambassador_to_the_Netherlands

"On August 1, 2005, President George W Bush nominated Arnall to become the U.S. ambassador to the Netherlands."

Well boy isn't that interesting - Then I went to search to see what the news release said during that time to see if he was a personal friend of GWB or what the deal was...Got this:

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/28/AR2005072801842.html

"On the same day that the White House announced that President Bush is nominating California billionaire Roland E. Arnall to be ambassador to the Netherlands, the company he controls said it would set aside $325 million for a possible settlement of allegations of predatory lending tactics....Arnall is the firm's principal shareholder. He, his wife and their companies have been the biggest political contributors to Bush since 2002"

Steve Sailer said...

Arnall was also the biggest donor to both Democrat Grey Davis and Republican Arnold Schwarzenegger (or something like that). He gave so much money to Gov. Davis that Davis presided over Arnall's wedding.

Still, the states' attorneys general did a better job of cracking down on Arnall's Ameriquest than the feds did. State laws tend to be older, less free market uber alles ideological, so they were more useful.

Anonymous said...

ey Steve, if you do a search for name on Google now, it will bring up other people like yourself that have similar viewpoints: John Derbyshire, Peter Brimelow, etc... accompanied by photos. However the picture of Gregory Cochran is not the Gregory Cochran we know, it's some crooked lawyer from Houston, Texas. Google is putting this guy's face to Gregory Cochran's bio. Another example of someone at Google covertly grinding political axes?

No, I think it's just an example of your stupidity. "Greg Cochran" is a much more common name than "John Derbyshire" or "Peter Brimelow."