I was 20 years old and I needed a fucking job.
Very confident in my ability to sell anything--even something I didn't understand--I applied for a job as a Loan Officer with a company called Castle Point Mortgage. I had no fucking clue what I was doing.
This is the story of how I helped to severely damage the world economy.
Sometime at the end of my training, my duty as a loan officer became pretty clear. My job at Castle Point was to contact people who had applied online at LendingTree.com. These people were homeowners who wanted (needed) to restructure their deal with the bank.
I would gather their credit score, paystubs, and a home appraisal. Based on this info, I could look at a chart to offer the customer the best loan packages available. The chosen loan would then be forwarded to a team of underwriters who would approve the loan. After loan approval the customer goes to "closing" to sign their new mortgage and must now make payments based on its terms.
So why would someone want a new mortgage?
It's called refinancing. People do it to get into a loan that will cost less than the one they currently have. Another common reason to refinance is to cash out some of the money you have already paid on your mortgage. The amount is tacked on to the new mortgage and paid back with interest.
The assholes at Castle Point were in the business of selling sub-prime loans. A sub-prime loan is a loan that will probably not be paid back. But Castle Point didn't give a shit. They made a huge percentage on every loan and still made money even when the borrower couldn't pay.
The people I sold mortgages to were desperate. The bank was closing in on most of them, and it was up to me to find them a loan that would fit. Unfortunately, the loans we sold were like jamming a round peg into a square hole.
One tool we used to pass shitty loans was called "NINA." NINA stands for "No Income, No Assets." This means that if the borrower has a good enough credit score, we can work out a loan based on that condition alone, not taking into account income or equity in the home.
The result is that we were selling mortgages to people every day that would never, ever be paid back. And we all knew it. The borrowers were aware, Castle Point was aware, and the regulators were damn well aware.
We know today that the banks who sold these toxic mortgages repackaged them as derivative securities. They sold these securities to pension funds, other banks, and other investors as a sure deal. Meanwhile, the fuckers were betting on these securities to fail. When the housing market crashed, the architects of this plan made off with billions of dollars.
I only lasted at Castle Point for a few months before getting the fuck out. After I left, I learned that Castle Point was raided by the FBI. They found evidence that management were manipulating borrowers' w-2, paystubs, and appraisals in order to jam them into loans. Even the loose regulations weren't enough to satisfy Castle Point's lust for money.
The evil Castle Point may be gone, but the mortgage industry is still up to its dirty old tricks. People who cannot afford homes are signing new loans every day. Other Lenders, in league with greedy Wall Street fat cats, and D.C. regulators, are cooking up the next housing crash. Be prepared. The economic shit is not nearly done hitting the fan.