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Mortgage Confession: How I Helped Ruin The Economy For Ten Bucks An Hour

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America’s Economic Collapse

Mortgage Confession: How I Helped Ruin the Economy for Ten Bucks an Hour

Burk Lee July 6th 2009

Economy - Money Money Money

The following recounts my experiences working for the Loan Delivery Department of a large multinational bank (hereafter known as The Bank) in Western New York during the hyper-inflated housing market. Almost all economists see the bursting housing bubble as a primary cause of the current global financial crisis. While there are many factors and actors to blame for the current crisis, my story highlights the impact securitization--the packaging and reselling of pools of mortgage loans--had on bank behavior.


These proprietary systems had built-in parameters and requirements programmed into the software, and by the time the loans got to me all issues with the mortgages had to be resolved. The loan pools were essentially sold as soon as they were created, and I was sending them out not long after the final paperwork had been signed. In many cases some pieces of information essential to the loan came too late, or not at all.

The first “incident†came only days after I started in Loan Delivery. I was entering one of my first few pools of loans into the system and I kept receiving an error message on a borrower’s income. Because a single error holds up the whole pool, each worth millions of dollars, I went to my boss to ask her how to resolve the issue. In a very casual tone Ms. Green told me to change the income until the problem was “fixed.†Although it didn’t occur to me immediately, I was basically covering up for loan officers making loans to people who could not afford them.

I soon noticed that the income flag came up frequently. Sometimes the necessary income “upgrades†were in excess of tens of thousands of dollars. In some pools of loans almost every borrower needed to have their income changed, so I began to mentally take note of the pools that required more extreme changes.


In the spring of 2004 I finally built up the bravery to come forward with my experiences of fraud (of which I was a party to) at The Bank. At this time, Elliot Spitzer was the New York State Attorney General and still building a reputation for fighting corruption on Wall Street. On condition of anonymity, I spoke to a deputy AG and filed a complaint report. The deputy seemed noncommittal and even apathetic about pursuing the charges that I was bringing to him. His office did call me one week later to verify my address, but that is the last I heard from them. Meanwhile, I continued to work and look for a new job. Finally, in May 2004, I could take it no longer and decided to quit.

Shortly after I quit I found out that there was a suit filed against The Bank by the Attorney General’s office in response to complaints of redlining (not making mortgages to minority groups in certain areas). It is possible that my complaint helped instigate this investigation, but I will never know. Unfortunately, the Office of Comptroller of Currency closed the case before it could be heard.

In total, I personally handled two and half billion dollars worth of mortgage-backed securities, and I estimate that approximately 80% of those pools of prime loans were compromised in some way. I was ordered to do this for ten dollars an hour. After I quit my job at The Bank, and based on the activities in my department, I would tell friends and family that there would be some kind of financial fallout from these activities; but at the time few people listened.

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neglected by


held back by


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What a guy!

Years too late, even by 2004 in the US, and ineffective when he did become brave enough to say something.

Two and a half billion dollars went through him! Oh yeah, he was really a tortured soul wasn't he....

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