Pressure at Mortgage Firm Led to Mass Approval of Bad Loans

The Washington Post has a longish profile of mortgage firms, and their responsibility in the flood of bad loans that’s threatening 2 million homeowners with foreclosure.

The story starts with a group of salesmen knocking desks with baseball bats, and then recounts what sounds like pretty dire and severe working conditions.  "You didn’t want to turn away a loan because all hell would break loose," one ex-mortgage company worker revealed in an interview.

New Century Financial is the company of focus – a cesspool of creative loans and personality conflicts.  After filing for bankruptcy last year, New Century admitted that it underreported the number of bad loans it made in its financial reports for the first three quarters of 2006.  Former employees also alleged that there was intense pressure from bosses to approve loans, even those with obviously inflated housing appraisals or exaggerated homeowner incomes.

You can read the full story here.