Customer Reviews

Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance

5 star:		(20)
4 star:		(9)
3 star:		(1)
2 star:		(2)
1 star:		(2)

 

 

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.

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.

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.

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. The most worthwhile parts of the book are his overview of the industry and his account of the loosening of underwriting standards that led to more abuse. He gives good accounts of selling a loan, risks to the lender, and how self interests of the parties got in the way of a credible industry.

This is a good book for someone that doesn't understand what happened but doesn't have a large finance background. As a mortgage trader who buys and sells loans, it's not great depth. But, what do I know. I lost plenty of chips in this mess although it now has helped my business as more creditable loans are being sold but in lower quantities.

If you want a book that tells you why things went so wrong in subprime lending, this is the book. Not only is (or more correctly, was) the author an insider in the industry, he is bright, extremely perceptive, and, most importantly, he has a conscience. In addition, he is an extremely able writer. He takes a topic that others have reduced to technical mush and presents it in a clear, precise, pointed fashion. The book is a nice collection of on-the-ground examples placed in a perceptive and morally-balanced "big picture." There are insights here that you won't find anywhere else.

Let me make it clear: I have no connection with the author in any way, shape, or form. I was looking for a good, well-written book that gave me new insights into the sub-prime mess. I bought five different books. This one was clearly the best. A couple of the others were useful, but they didn't have the appeal of hearing all of this explained by a very bright, extremely knowledgeable insider.

If you want to know how all of those banks in Europe got duped into buying bonds backed by laugher mortgages, or how Bear, Stearns got taken down, you want to continue your search. But if you want to know how this massive market failure happened in the first place, this author, Richard Bitner, will tell you.

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. I found it fascinating from the overall perspective of lending and risk management (for any purpose). Definitely an accessible read for the layperson with at least a little bit of knowledge of the acronyms.

Knowing several people who worked in this business, the author is right on the mark.

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. Richard Bitner takes us on an unbelievable journey through the system that resulted in the subprime implosion. He should know; he worked in the business co-founding the company Kellner Mortgage.

As one reads the book, one gets a better picture of how this debacle is the result of the perfect storm. There is plenty of blame to go around. Here is the list:
* The borrowers who should have know better than take on the risks they did.
* The brokers who were held accountable to no one but themselves.
* The appraisers who inflated property values that lenders accepted.
* The lenders who made crazy loans that shouldn't have been made.
* The rating agencies that were supposed to do what?
* The investment banks who securitized everything into CDO's, CMO's CLO's and who knows what else.
* The financial institutions and other investors who purchased this stuff with little understanding of what they were buying.
* The government that exercised little or no oversight and inhibited regulatory efforts.

Did I miss something - probably. Nevertheless if you want to delve into the machinations of this morass of "greed, fraud and ignorance" as the title of the book suggests, I would recommend this book.

Although this book was not as technical or in-depth as I would have liked it to be, I found it interesting and informative nonetheless. Most of the information I knew but I did not realize how involved the rating companies were in this mess as well. What I did not like and it goes for what other people are saying and what other books are saying is the lack of finger-pointing at the homeowners. While some of the elderly people may have been duped, as a RESPONSIBLE (read...did my homework and saved money and did not buy more house than I could comfortably afford) homeowner, I do not feel sorry for the individuals facing foreclosure because they bought a 250,000 dollar house and they only made 35,000 dollars/year and had nothing in savings and no real job security. Then they want my tax dollars to bail them out and help them keep their home, ABSOLUTELY NOT!!!! Honestly, they knew they could not afford to buy that house and were just being greedy, where is the personal responsibility factor in all of this mess????

I spent a weekend with Richard Bitner's book, hoping to find a more in-depth look at all sides of the current mortgage crisis. I had read plenty of articles, but the narrow focus in each write-up made it hard to carry the information from one story to the next. Bitner's book was exactly what I was looking for. He lays out in plain English how the subprime lending system works, and how it transformed into the dangerous and sprawling entity that wiped out the fortunes of so many people and corporations.

Bitner's understanding of the industry is remarkable, but he still keeps his book focused towards the layperson. Every aspect of the subprime lending process is spelled out with nice figures and plenty of review in later chapters. He even goes so far as to suggest ways to fix the lending industry, but I don't know enough to give a worthwhile evaluation of his suggestions.

What really struck me at the end was how so many little perversions in the system, so many people using a wide variety of dishonest tactics to help them take a little bit more than their allotted share, eventually caused the whole system to run off the rails. There was dishonesty and greed at every step of the process, and these little cracks in the facade eventually brought down the castle. Absolutely fascinating.