Our very own Richard Bitner -- managing director here at HW Publishing, and now, a burgeoning author, too -- saw his memoir, Confessions of a Subprime Lender, get some big-time ink today over at the Wall Street Journal. For those who don't know, Bitner was the president of Kellner Mortgage Investments, a small subprime lender that went belly-up in March of 2007 amid the start of the subprime credit crisis. By that time, he had long since sold off his interest in the firm (he exited in 2005 when he grew uncomfortable with slipping credit standards), but his book is a telling insider's peek into what really went wrong in the subprime lending boom. From the WSJ:
Yes, borrowers ... made poor decisions and needed to learn their lesson. But so did the lenders, brokers, rating agencies, regulators and Wall Street financiers who all thought, or pretended, that Johnny was a good bet. To his credit, Mr. Bitner owns up to a fact that many lenders still haven't admitted: Just because Wall Street was willing to supply endless funding for crazy mortgages didn't mean that lenders were forced to make the loans. "We decided whether a borrower was a good credit risk and we funded the loans using our own money (before selling them to investors). No one else made that final decision," he writes. Not everyone in the business was corrupt, of course. But too many were. After giving a concise overview of how mortgage loans are made and sold, Mr. Bitner exposes some of the industry's dirty little secrets for making borrowers look more creditworthy than they are ...
Those dirty secrets that only an insider knows, and his ideas on how to go about fixing the mess we're now in, are worth reading -- and worth your $13.57 to buy and read. The WSJ's James Hagerty notes that many of Wall Street's finest, including Bear Stearns, "would have been better off listening to Mr. Bitner ... three years ago [rather] than relying on their computer models. They had plenty of brainpower but fell short on common sense." Knowing Richard personally both as a friend and colleague, I know the months of work that went into the book, and I know his desire to see the industry recover from its current state. When I say that HW is out to create the next generation of trade media for mortgage banking, it's the unique expertise of people like Richard that really give that sentiment its true meaning and direction. (As an utterly shameless plug, we'll feature an exclusive story on Richard's reasons for writing his book in HOUSINGWIRE Magazine's inaugural print issue -- if you haven't already, you only have until June 30 to snag a $79 subscription through the end of next year, so subscribe today.)