A few things...

Reader comment on: U.S. Sues MortgageIt, Deutsche Bank

Submitted by Scott (United States), Aug 11, 2013 21:14

Great article, especially your final two paragraphs. I would however take exception to the narrative that seems to run through the news media (and government) that there was massive fraudulent underwring going on that attributed to the mortgage meltdown - and I'm not an underwriter. I worked at MortgageIT as an Account Executive both before and after it's aquisition by Deutsche and although I cannot say what may have taken place at other branches I can tell you that at the branches I worked with the underwriters were extremely honest and if anything they slanted toward the conservative. For real. Don't get me wrong, I have no doubt that there were loans tha got through on a rare occasion that should not have - but this idea that the underwriters were responsible for the meltdown by approving anything that came in the door is total bunk. The VAST majority of mortgage underwriters both then and now are honest, hard working folks who would never dream of allowing fraud. The problem was not the underwriters folks, the problem came from directly from Wall Street in the form of Pay Option ARM's, Interest-Only ARM's, ALT-A product, and Sub-Prime (and no, ALT-A was never Sub-Prime) - all of which were faciltated by cheap money from the Fed window and a NON-EXISTANT SEC. The banks credit commitees dreamed up the products in order to fill the buckets. The fools at Behr-Stearns dreamed up the SISA and the NINA products and handed down the underwring guidelines to only blame the underwriters later. And as for the FHA loans all I can say is that I never saw more than a handfull in several years time in those days. They were almost non-existant. And I'm betting that the FHA default rate nationwide was similar to MortgaeIT's in the same years. Where is thge data to prove me wrong? guarantee that the default rate with mortgageIT was similar to the default rate of other lenders, no?

Bottom line... the whole industry was complicit and so was the governmetn and Wall Street. Stop blaming the underwriters, LO's and buyers for using and approving the products that the banksters dreamed up. I have no love lost for the owners of MortgageIT and it sickens me that they have rode off into the sunset (or the SEC) but I still am of the opinion that this whole thing goes way deeper than we all know and that the purchase of MortgageIT by Deutsche (at the worst possible time - and as they were betting against the market) was for reasons that would get me called a conspiracy theorist. And I am just fine with that.

The banks, the Feds, and Wall Street made their beds... yet somehow the American tax payer now has to lie in it and the world is somehow supposed to believe that these evil underwriters were at the crux of the issue?

-Scott L

Phoenix, AZ

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