Former subprime lender Richard Bitner once worked in an industry that started out helping disadvantaged customers but collapsed due to greed, lack of financial control and willful ignorance. In Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance, he reveals the truth about how the subprime lending business spiraled out of control, pushed home prices to unsustainable levels, and turned unqualified applicants into qualified borrowers through creative financing. Learn about the ways the mortgage industry can be fixed with his twenty suggestions for critical change.
Confessions of a Subprime Lender
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Editorial Reviews
Review
"...packed with tales of crooked brokers, deceitful customers, avaricious Wall Street banks and all too obliging credit rating agencies." (The Guardian, September 19, 2008)
"If this is even near the truth, it is remarkable...Bitner's book was more firmly rooted in the world we live in." (Prospect Magazine, October, 2008)
"...pulls back the curtain on the players who created the subprime disaster...In a breezy style and from a special vantage" (Pensions World, November 2008)
From the Back Cover
Real Estate
One insider's rollercoaster account of the subprime implosion
Richard Bitner founded his own subprime mortgage company just as the industry took off. In five years, he watched his company grow from a tiny operation to a booming business. But something wasn't right...
As housing prices skyrocketed, Bitner watched greed and fraud overtake the industry. Eventually, he became disenchanted after foreclosing on a subprime borrower who was given a legitimate, industry-standard mortgage—a loan Bitner realized never should have been made. Seeing the ugly writing on the wall, he sold his stake in the business before the industry imploded under a mountain of bad debt.
Confessions of a Subprime Lender pulls back the curtain on the players who created the subprime disaster, including brokers, lenders, Wall Street investment firms, and rating agencies who worked the system to their advantage. From his unique perspective as a subprime lender, Bitner reveals:
Why nearly three out of every four mortgages were misleading or fraudulent
How unscrupulous brokers tricked lenders and gullible borrowers
How brokers and lenders turned unqualified applicants into "qualified borrowers"
Why Wall Street and the rating agencies are largely to blame for the collapse
Interwoven with dramatic personal anecdotes, Confessions of a Subprime Lender explains how the subprime industry blew up and concludes with a comprehensive solution for rebuilding it by forcing changes on all the key players.
"Bitner's thorough review of the subprime lending industry provides a behind-the-scenes look at the mortgage mess. From the broker on Main Street to the investor on Wall Street, it's an unabridged version of what went wrong and how it needs to be fixed."
—Bill Dallas, founder, First Franklin Mortgage, one of America's largest subprime lenders, before it collapsed
"This is an in-depth, eye-opening examination of the problems impacting the housing and mortgage markets."
—Matthew McIntyre, CEO, Puritan Financial Group, Inc.
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Customer Reviews
Most Helpful Customer Reviews
36 of 37 people found the following review helpful
By P. B. Sims
Format:Paperback
Wow(!), there sure are a lot of reviews here that make this book sound like the definitive work for explaining the mortgage meltdown. I'm not the smartest bulb in the room (at all) when it comes to this kind of stuff, but I found I knew most of what was discussed in the book before I read it. To be sure, it's an easy read (of the lazy summer weekend kind) and a fun one (lots of incompetent borrowers, sleazy brokers and greedy investors - this is mostly an anecdotal book), and it does a pretty good job of simplifiying things, but in the end, I was disappointed. Worth the money and the time, but less substance than I expected.
The thing that irked me the most is that Bitner REALLY lets himself (and to a large degree, other lenders) off the hook here. Oh sure, in the end he says he blames himself too, and 'gee gosh', he should have known better, but I never get the impression he really means it or takes any real responsibility. Of all the institutions and people he blames for this mortgage mess, he makes it sound as if his group is the least culpable,- caught between crooked brokers and greedy investors. I just don't buy it. In the end, he's too self-serving, and trying to have it both ways. I get the impression he wants the reader to feel sorry for him, and I don't.
While I appreciate the fact that he did write this rather light examination of the subprime industry, I can't get past the fact that he made lots and lots of money exploiting the system, as he exploits the mess now by selling a book about it. And all the time, there are a lot of folks who have been screwed and thier lives turned upside down, partially because of his actions.
In the end, all of us are paying and will continue to pay for his (and of course, many others') unethical behavior.
Doesn't sound to me like he's changed; he's just found another angle.
The thing that irked me the most is that Bitner REALLY lets himself (and to a large degree, other lenders) off the hook here. Oh sure, in the end he says he blames himself too, and 'gee gosh', he should have known better, but I never get the impression he really means it or takes any real responsibility. Of all the institutions and people he blames for this mortgage mess, he makes it sound as if his group is the least culpable,- caught between crooked brokers and greedy investors. I just don't buy it. In the end, he's too self-serving, and trying to have it both ways. I get the impression he wants the reader to feel sorry for him, and I don't.
While I appreciate the fact that he did write this rather light examination of the subprime industry, I can't get past the fact that he made lots and lots of money exploiting the system, as he exploits the mess now by selling a book about it. And all the time, there are a lot of folks who have been screwed and thier lives turned upside down, partially because of his actions.
In the end, all of us are paying and will continue to pay for his (and of course, many others') unethical behavior.
Doesn't sound to me like he's changed; he's just found another angle.
12 of 13 people found the following review helpful
Format:Paperback
I read Richard Bitner's book from cover to cover and did not want to put it down. As one who has been in the mortgage business for over 30 years, working in various industry segments including retail origination, wholesale lending, correspondent lending and private mortgage guaranty insurance (residential loan default insurance), I was impressed by how Richard managed to put all the key pieces together on the subprime crisis and did it with such an honest, insightful and refreshing candor.
After all my years in a business that insured lenders and mortgage investors against residential mortgage loan defaults, I understood we were headed for trouble with massive mortgage defaults, simply due to all the irresponsible lending practices with loan programs that had multiple layers of risk where buyers had little or no skin in the game and originators had even less. There is lots of blame to go around and Bitner does not spare any of the many participants from being assigned their contribution to the crisis.
As my friend used to say: "This has got to be true because you couldn't make this stuff up." That clearly applies to Bitner's weaving of such a bizarre, but sadly true story. I used to use an expression of my Grandmother's about the subprime "stuff" I observed in the mortgage industry and what I felt would happen. I said: "The chickens will be coming home to roost." Bither gives a great account of how all those eggs got laid and how the fox was in charge of the hen house. This crisis in housing and mortgage finance has already been devastating and it is far from being over. This is an easy read to gain a keen insight in what happened and how it happened. Whether you in the lending industry or not, chances are you have been impacted directly or indirectly by this debacle. Reading this book will help you understand the who, what, when, where and why. I highly recommend it.
After all my years in a business that insured lenders and mortgage investors against residential mortgage loan defaults, I understood we were headed for trouble with massive mortgage defaults, simply due to all the irresponsible lending practices with loan programs that had multiple layers of risk where buyers had little or no skin in the game and originators had even less. There is lots of blame to go around and Bitner does not spare any of the many participants from being assigned their contribution to the crisis.
As my friend used to say: "This has got to be true because you couldn't make this stuff up." That clearly applies to Bitner's weaving of such a bizarre, but sadly true story. I used to use an expression of my Grandmother's about the subprime "stuff" I observed in the mortgage industry and what I felt would happen. I said: "The chickens will be coming home to roost." Bither gives a great account of how all those eggs got laid and how the fox was in charge of the hen house. This crisis in housing and mortgage finance has already been devastating and it is far from being over. This is an easy read to gain a keen insight in what happened and how it happened. Whether you in the lending industry or not, chances are you have been impacted directly or indirectly by this debacle. Reading this book will help you understand the who, what, when, where and why. I highly recommend it.
3 of 3 people found the following review helpful
Format:Paperback|Amazon Verified Purchase
This book will basically confirm what you already know about Subprime loans, if you believe that lots of people knew the system was broken, but chose to look the other way because it was profitable. The author talks about how the system encouraged and accomodated fraudulent players, while "consciencious" players (such as the author's firm, of course) played by the rules and remained completely above the fray. The author was shocked by the behavior of other subprime middlemen, but his company made millions and grew due by focusing on these types of loans.
It's a quick read, and useful if you know nothing about the industry, as it identifies the basic players participating in the provision of subprime loans, and their functions. I suspect you could get as basic a primer on the internet for free, without the specific examples provided of system abuses.
It's a quick read, and useful if you know nothing about the industry, as it identifies the basic players participating in the provision of subprime loans, and their functions. I suspect you could get as basic a primer on the internet for free, without the specific examples provided of system abuses.
Most Recent Customer Reviews
4.0 out of 5 stars
It Ends In Chapter Seven!
Confessions... contains seven chapters (get it- as in Chapter 7 of the US Bankruptcy Code?!?) that delve into a witty, somewhat light-hearted and often comical examination of a... Read more
Published 15 months ago by Gregory McMahan
4.0 out of 5 stars
insightful
The book assumes too much knowledge on the part of the reader but is not geeky. You can figure terms out as you go along. Read more
Published on June 10, 2010 by Sandra M. Brown
5.0 out of 5 stars
Right on the Money!
Knowing several people who worked in this business, the author is right on the mark.
Published on May 30, 2010 by S. Fisher
1.0 out of 5 stars
You are being suckered!!!!
What is the obsession in this country with wanting to read people's confessions? Why are you giving this greedy jerk MORE of your money? Read more
Published on December 17, 2008 by Annoyed American
4.0 out of 5 stars
A Layman's Summary to Subprime
This is not an in depth study of subprime but is a worthwhile "layman's" review. Basically he was a subprime lender who sold his part of the company prior to the collapse. Read more
Published on December 13, 2008 by R. Spell
4.0 out of 5 stars
Absolutely worthwile. An industry exposed by an insider
I really enjoyed reading this book.
In an easy-to-read style the author takes the reader on a road down the gory details of the subprime lending industry. Read more
In an easy-to-read style the author takes the reader on a road down the gory details of the subprime lending industry. Read more
Published on November 30, 2008 by M. Drees
5.0 out of 5 stars
Excellent Book of Blame...
I disagree with some of the critics about this book. I read the original version early this year, and I thought it spelled out very nicely that there was plenty of blame to go... Read more
Published on November 28, 2008 by Robert Wilfinger
5.0 out of 5 stars
Blame all around
Well written, informative and authoritative view of the real estate fiasco. There is enough blame to go around from the buyer all the way to the top. Read more
Published on October 30, 2008 by Grandpa D
5.0 out of 5 stars
Wonderful!
A wonderful explanation as to how we are in the financial crisis we are in. It was an easy read. I highly recommend it.
Published on October 24, 2008 by Thomas Fortino
5.0 out of 5 stars
An Inside Look
This is the fourth book I have read where greed and avarice equals debacle. Don't we get it yet, or is this just an innate human condition. Read more
Published on October 18, 2008 by Randolph Eck
