The Liar

Many of you may have already read, or heard about Christopher Warren. At the ripe old age of 19, he was hired by Ameriquest, and soon became one of their leading originators.

I have taken excerpts for your perusal, but reading the whole thing is amazing, and nauseating. The article, in pdf form, can be seen here. It is full of typos, misspellings, grammatical errors and general "I didn't care about booklearnin" mistakes.

Towards the end, he does make some salient points on how to clean up the system. Clever he is. Ethical? Well, you be the judge.

"As a 19 then 20 year old boy, my managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex, and money, money, and more money."

"....in the two and half years I was at Ameriquest I funded over $90,000,000 in mortgages, of which more then $75,000,000 contained some sorts of material frauds undetected by management and funders."

"So at the ripe old age of 22, I founded a mortgage brokerage/bank - WTL FINANCIAL INC., at 22, a fraudster trained by the best corporate environment for fraud, I built a company modeled after the movie boiler room and got WTL licensed in OR CA, MN, CT, RI, FL as a mortgage banking company. From 2004 until its grand 2007 collapse, WTL killed it."

"Our company boasted region-best 30,000 square feet, 120 employees, and handling a monthly gross revenue over $5m. Fraud was rampant. We found investors that were not re-pulling credit reports, so we would change a 500 fico to a 700 fico, a person in foreclosure and make It look like they were never late, fake w2s, pay stubs, bank statements, verification of deposits, none of which was being re-verified."

"These investors, who were securitizing these assets as AAA rated were not even verifying anything in the files? I am sure that their investors were assured everything from correspondents was being audited. Every time a lender caught a file we would “fire” the employee produce termination paperwork to the investor, and re-hire the employee under a different alias. Over the course of the 3 years, over $810,000,000 in mortgage backed securities originated from my companies. That’s a 24 year old selling a billion dollars in bad mbs securities which by 2008 were in default with out doubt."

"The very top ranks of the corporate ladders knew what was going on."

"The problem was this: it wasn’t just these independent or subsidiary companies at all. Deutche Bank, Merryl Lynch, Citi Group, all were purchasing insanely high volumes of funded loans with horrible underwriting guidelines that would have made an underwriter from the 70s or 80s complete scream at the top of his lungs in concern."

"Now, more then ever, in this market, as an industry insider I see more fraud happening now then in 2005. More fraud. Bigger fraud. Bigger profits. More defaults and foreclosure."
"I actually had an FBI agent ask me “how in this market with all the changes is it even still possible to get cash back on a purchase”. Any FBI agent who has to ask that question, shouldn’t be involved in a mortgage fraud investigation, period. This example brings us the second problem, and that’s the individuals fighting fraud are doing it completely backwards and with the wrong skill-sets."

One of the points he makes is the heads of the corporations buying the mortgages knew that fraud was rampant. He also insinuates they did not care. The large Wall Street firms were making too much money selling MBS and CDO's to worry about fraud. Besides, the Wall Street firms were selling the risk (defaults) to someone else. They wouldn't lose money on them, or have to worry about prosecution. They could always point to the originators as the source for illegality.

Funny thing is, it may have started out that way. But, just as with any lie, the liar at some point also begins to believe the lie. By 2006, most of Wall Street began buying their own CDO's, even though they knew how problematic they were.

Oh, what a tangled web we weave.........