"The self-made billionaire Roland Arnall was a pioneer of sub-prime mortgages in the US, the collapse of which industry led to the present credit squeeze in the West and huge banking uncertainty. The reverberations of THE SUB-PRIME DISASTER HAVE BEEN FELT IN THE COLLAPSE AND TAKEOVER BY THE STATE OF THE NORTHERN ROCK BANK IN BRITAIN and the failure of the Bear Stearns investment bank in the US, bought for a song by its rival JP Morgan Chase last week.What follows is an excerpt from 'The Monster: How a Gang of Predatory Lenders and Bankers Fleeced America, and Launched a Global Crisis', by Michael Hudson:
ARNALL WAS ALSO… ONE OF THE BIGGEST DONORS TO THE REPUBLICAN PARTY and, latterly, a diplomat, being appointed US Ambassador to the Netherlands in February 2006. HE WAS ALSO A FOUNDING CO-CHAIRMAN AND TRUSTEE OF THE SIMON WIESENTHAL CENTRE…
BUT IT IS FOR HIS ROLE IN PROMOTING THE LENDING OF MONEY AT HIGH RATES OF INTEREST TO MILLIONS OF AMERICANS WITH POOR CREDIT RATINGS for which Arnall will chiefly be remembered. HIS LENDING COMPANY, AMERIQUEST… AND ITS WHOLESALE SISTER, ARGENT MORTGAGE, BECAME AMERICA’S BIGGEST SUB-PRIME LENDERS…
The business that styled itself the proud sponsor of the American dream was increasingly accused of operating 'boiler rooms' of agents who persuaded borrowers to take out loans that they could ill afford with fees buried in the small print and interest rates higher than promised. The number of borrowers’ complaints mounted, and in 2006 no fewer than 49 state attorney-generals launched class-action suits charging the company with using 'bait and switch' schemes to cheat borrowers into taking out costlier loans than they seemed…
Roland Edmond Arnall was born in Paris in 1939 to East European Jewish parents who had fled to the French capital and was brought up as a Roman Catholic to evade the Nazi deportations…
He began investing in property in the 1970s and expanded into financial services, oil and technology. HE SAW A NICHE MARKET AMONG THOSE UNABLE TO GET BANK LOANS THROUGH TRADITIONAL METHODS AND PROVIDED THEM WITH THE MONEY BY AGGRESSIVE SELLING TECHNIQUES. In 1979 he founded the Long Beach Savings and Loan company which became Ameriquest in 1994 and eventually AMERICA’S LARGEST SUB-PRIME MORTGAGE PROVIDER…
In a single year it generated loans worth $83 billion… But rising interest rates led to a steady increase in the number of defaults by borrowers unable to pay, the business found itself in trouble and in 2007 the bubble burst.
Arnall and his wife, Dawn… were generous Republican benefactors.
THEY WERE AMONG THE TOP TEN DONORS TO THE PARTY DURING THE 2003-04 PRESIDENTIAL CAMPAIGN AND GAVE $1 MILLION TO PRESIDENT BUSH’S INAUGURATION PARTY.”
"As a loan officer at Ameriquest, Glover worked on commission. He knew the only way to earn the six-figure income Ameriquest had promised him was to come up with tricks for pushing deals through the mortgage-financing pipeline that began with Ameriquest and extended through Wall Street's most respected investment houses.On 13 February 2008, BBC News reported thus:
Glover and the other twentysomethings who filled the sales force at the downtown L.A. branch worked the phones hour after hour, calling strangers and trying to talk them into refinancing their homes with high-priced 'subprime' mortgages. It was 2003, subprime was on the rise and Ameriquest was leading the way.
The company's owner, Roland Arnall, had in many ways been the founding father of subprime, the business of lending money to home owners with modest incomes or blemished credit histories. He had pioneered this risky segment of the mortgage market amid the wreckage of the savings and loan disaster and helped transform his company's headquarters, Orange County, California, into the capital of the subprime industry. Now, with the housing market booming and Wall Street clamoring to invest in subprime, Ameriquest was growing with startling velocity.
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'."
“Sub-prime lenders are bringing more than half of UK repossession orders, despite accounting for just 6% of total mortgages, a BBC report has found…The Lehman family, who founded the bank that bears their name, are Jewish, as is Dick Fuld, the CEO of Lehman at the time of the bank's demise.
Official figures showed last week that actual repossessions rose to an eight-year high of 27,000 in 2007… MORE THAN 10% OF THE CASES WERE BROUGHT BY TWO SUB-PRIME LENDERS OWNED BY US INVESTMENT BANK LEHMAN BROTHERS.”
On 20 February 2008, The Daily Telegraph told us this:
“The cost of the Northern Rock crisis has reached the equivalent of £3,500 for every taxpayer”!The man who 'gave $1million to President Bush's Inauguration party' and earned himself the soubriquet, the 'father of sub-prime', was, as previously stated, Jewish.