Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance

This book does a great job of pointing out the inconsistencies in the industry - inconsistencies that led to the collapse of Subprime lending. The book is a flowing read that someone who does not know the industry can read and gain an understanding of the Subprime mess. Every potential homebuyer should read this book.

If you want a book that tells you why things went so wrong in subprime lending, this is the book. Not only is (or more correctly, was) the author an insider in the industry, he is bright, extremely perceptive, and, most importantly, he has a conscience. In addition, he is an extremely able writer. He takes a topic that others have reduced to technical mush and presents it in a clear, precise, pointed fashion. The book is a nice collection of on-the-ground examples placed in a perceptive and morally-balanced "big picture." There are insights here that you won't find anywhere else. Let me make it clear: I have no connection with the author in any way, shape, or form. I was looking for a good, well-written book that gave me new insights into the sub-prime mess. I bought five different books. This one was clearly the best. A couple of the others were useful, but they didn't have the appeal of hearing all of this explained by a very bright, extremely knowledgeable insider. If you want to know how all of those banks in Europe got duped into buying bonds backed by laugher mortgages, or how Bear, Stearns got taken down, you want to continue your search. But if you want to know how this massive market failure happened in the first place, this author, Richard Bitner, will tell you.

I read Richard Bitner's book from cover to cover and did not want to put it down. As one who has been in the mortgage business for over 30 years, working in various industry segments including retail origination, wholesale lending, correspondent lending and private mortgage guaranty insurance (residential loan default insurance), I was impressed by how Richard managed to put all the key pieces together on the subprime crisis and did it with such an honest, insightful and refreshing candor. After all my years in a business that insured lenders and mortgage investors against residential mortgage loan defaults, I understood we were headed for trouble with massive mortgage defaults, simply due to all the irresponsible lending practices with loan programs that had multiple layers of risk where buyers had little or no skin in the game and originators had even less. There is lots of blame to go around and Bitner does not spare any of the many participants from being assigned their contribution to the crisis. As my friend used to say: "This has got to be true because you couldn't make this stuff up." That clearly applies to Bitner's weaving of such a bizarre, but sadly true story. I used to use an expression of my Grandmother's about the subprime "stuff" I observed in the mortgage industry and what I felt would happen. I said: "The chickens will be coming home to roost." Bither gives a great account of how all those eggs got laid and how the fox was in charge of the hen house. This crisis in housing and mortgage finance has already been devastating and it is far from being over. This is an easy read to gain a keen insight in what happened and how it happened. Whether you in the lending industry or not, chances are you have been impacted directly or indirectly by this debacle. Reading this book will help you understand the who, what, when, where and why. I highly recommend it.

Bitner's take on subprime lending reads like an insider's indictment of a process that was doomed to fail the minute it first was set into place -- and he's not above blaming himself, which is refreshing. But his book gives the inside dirt that no reporter would ever get, on how borrowers were squeezed into loans and what brokers do to dupe lenders into making bad loans. It also gives some down-to-Earth suggestions on fixing this mess. I bought it because the WSJ reviewed it and gave the book a thumbs up. In this case, the WSJ was spot on -- this is a five star book all the way!

Bitner's book is a candid, insider's look at the subprime mortgage meltdown. He clearly explains the origins of the problem and how it became one of the most serious challenges to face the U.S. economy in the last 50 years. He also offers some solutions to help prevent this from happening again. The book is a must read for homeowners, investors and industry professionals trying to understand what happened in the subprime mortgage market, how it will potentially impact them, and what to do about it. A timely book!