Wednesday, June 20, 2012

Ex-'Stagecoach To Hell' Loan Officer Describes Experiences Peddling Subprime Mortgages For Alleged 'Ghetto Loans' Peddler

The Washington Post reports:

  • For nearly a decade, Beth Jacobson lived inside the vast machinery of subprime mortgages that shook the nation’s economy.

  • In sworn court testimony, she described watching loan officers comb through heavily African American areas such as Baltimore and Prince George’s County, forging relationships with churches and community groups to sell their members shoddy mortgages.

  • She says she processed loans for homeowners with sterling credit ratings with higher interest rates than they needed to pay. And she says she pumped out millions of dollars in mortgages to people with no paperwork and low incomes, becoming Wells Fargo’s top-producing loan officer.

  • The machine made her rich — the questions came later. Now, she has recast herself as a crusader for consumers in a battle that has pitted her against the system she once pushed.

  • The 51-year-old Maryland resident has emerged as a defining character in the ongoing saga of the country’s housing crisis, from the headiest days of the bubble to the current flood of foreclosures. Her scathing affidavit detailing “the stagecoach to hell” at Wells Fargo is a key part of the groundbreaking lawsuit filed by the city of Baltimore against her former employer. The case spawned copycats across the nation, and federal regulators launched investigations mirroring its allegations.
  • But some things poked at her conscience, she said. She said she grew uncomfortable after being excluded from meetings about marketing to black churches. She said that she later learned how sales pitches purposefully shunned the word “subprime” and that she was taken off the roster to speak at a “wealth-building” seminar in predominantly black Prince George’s County because she wastoo white.”

  • The point was clear to me: Wells Fargo wanted black potential borrowers talking to black loan officers,” she wrote in the affidavit.

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