How business works….

Posted on October 26, 2010
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The Monster : How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America–and Spawned a Global Crisis

Michael W Hudson

From Investor Insight

Up and down the line, from loan officers to regional managers and vice presidents, Ameriquest’s employees scrambled at the end of each month to push through as many loans as possible, to pad their monthly production numbers, boost their commissions, and meet Roland Arnall’s expectations. Arnall was a man “obsessed with loan volume,” former aides recalled, a mortgage entrepreneur who believed “volume solved all problems.” Whenever an underling suggested a goal for loan production over a particular time span, Arnall’s favorite reply was: “We can do twice that.” Close to midnight Pacific time on the last business day of each month, the phone would ring at Arnall’s home in Los Angeles’s exclusive Holmby Hills neighborhood, a $30 million estate that once had been home to Sonny and Cher. On the other end of the telephone line, a vice president in Orange County would report the month’s production numbers for his lending empire. Even as the totals grew to $3 billion or $6 billion or $7 billion a month—figures never before imagined in the subprime business—Arnall wasn’t satisfied. He wanted more. “He would just try to make you stretch beyond what you thought possible,” one former Ameriquest executive recalled. “Whatever you did, no matter how good you did, it wasn’t good enough.”

Inside Glover’s branch, loan officers kept up with the demand to produce by guzzling Red Bull energy drinks, a favorite caffeine pick-me-up for hardworking salesmen throughout the mortgage industry. Government investigators would later joke that they could gauge how dirty a home-loan location was by the number of empty Red Bull cans in the Dumpster out back. Some of the crew in the L.A. branch, Glover said, also relied on cocaine to keep themselves going, snorting lines in washrooms and, on occasion, in their cubicles.

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