Liar Loan

By Jason Reid

Big banks and Wall Street did not act alone in creating our “Great Recession.” They had partners. Hundreds of boiler room operations sprung up across the USA jammed with money-hungry twentysomethings fresh from parking cars, trained for 30 days and then let loose to sell just about anyone into refinancing their home.

• Language: English
• Publisher: Jason Reid
• Release date: Jul 25, 2010
• ISBN: 9781452421216

Book preview

Preface

The United States’ financial meltdown of 2008-2009 almost caused our country to fall into a second great depression. The media has focused much of its attention on the big banks and their role in the crisis. To date, little attention has been given to the front line of the mortgage debacle—the people hawking those loans. They were the ones on the other end of the phone whose marketing pieces you received day in and day out, whose email blasts clogged your inbox and whose charming voices helped convince you to refinance your home and buy that new TV.

Chapter 1

Neil Roberts rolled out of bed and snagged his watch from the dresser, glancing at the time. He set the watch down and reached high above his head and stretched. As he headed toward the shower he peeked over his shoulder at Lauren’s naked body on the bed. He glanced at himself in the mirror as he twisted the shower dial, smirking as he admired his trim waist, strong jaw, and short, dark curls.

She never was able to resist this ass of mine. He winked one blue eye at himself before stepping through the curtain and into the steaming water.

Why didn’t we have sex like that when we were married? Lauren called out to him over the running water.

Neil pulled open the shower curtain. "You did. With the pool boy, as I recall."

Lauren threw a pillow in the direction of his voice and rolled onto her back, fanning her blonde hair across the mattress. Why do you have to ruin a special moment by bringing that up? She pulled the covers up to her neck to ward off the chill on her bare breasts.

Neil turned off the shower and wrapped a towel around his waist and dried his hair with another as he walked back toward her, leaving a dripping trail on the carpet behind him. Look, Sweetie, what we have now is great! We’re both remarried and once a week I get to be your pool boy. It works out great for both of us.

Lauren smiled. You are much easier to deal with when I don’t have to see you all the time. I’ve actually started to like morning sex, and I almost look forward to our couple of hours together.

Neil grinned at her and slipped on his pants. See? That’s right, no reason to get rid of a good thing. Neil finished buttoning his shirt and looked at his watch again. Shit, it’s nine-thirty already. I need to get back to the office. He leaned over and kissed Lauren on the forehead.

Next week, Lauren said, let’s meet at that little place down in Laguna. I like the fresh sea air in the morning. Plus, that way when you run off I can spend the day at the spa. It’s such a waste to keep a nice hotel room for only an hour.

Perfect. That way you can bring the pool boy in after I leave.

Neil Roberts, you are such an ass! Lauren threw another pillow at the door.

Neil jerked the door shut just enough to avoid being hit. Love you. See you next Wednesday, he said through the crack before pulling the door shut.

Chapter 2

Neil took a deep breath of air and looked up at the clear California sky as he walked out of the Hilton and towards the valet.

Your valet ticket, please, Sir, the twenty-something surfer in valet uniform asked politely.

Neil searched his pockets, but found nothing. Look, um…I don’t have the ticket. I must have left it up in the room and I don’t think going back there right now is a really good idea. Based on the last things I said and what was being hurled at the door as I left, well, I would bet that ticket has been flushed by now.

I’m sorry, Sir.

Don’t be. She’ll get over it by next week. She always does. The name’s Neil Roberts and that red Ferrari over there is mine.

Yes Sir. I remember you. You came in about an hour ago.

I think it was more like an hour and half—I’m not that quick, kid…but maybe you’re right.

The valet blushed. I’ll go get your keys.

Thanks for taking care of me.

Neil waited for the valet to bring his car around, handed the kid a ten-dollar bill, and then jumped in the car and pulled out of the hotel parking lot. He glanced at the dashboard clock, cursed, and then grabbed his phone and dialed. It rang twice.

Roland, how’s it hanging? Neil said before the body on the other end could speak.

Neil Roberts, I was just about to give you a call.

I hope that’s because you’ve been making me a ton of money.

The market is hot, Neil, and you are well positioned in some very high growth stocks right now. You are going to be an even richer man.

I love hearing that. What do you have for me today?

Well, I’ve got you in on the friends and family round of two new IPOs this week. Both are in the red-hot Internet space

Are you sure?

Of course I’m sure. I’m on top of the damn game—that’s why you hired me. This is the hottest market I’ve ever seen. The days of brick and mortar stores are gone! Soon you will be driving by Fashion Island on your way to work and the parking lot will be empty. I predict that no one will go to a mall in two years.

I go to work at four in the morning. The mall is always empty.

Alright, wise-ass. On your way home, then. The point is that Internet stocks are the bomb, Neil. If you don’t want in, I have plenty of clients begging to be in this round. I am getting you in on this one as a favor.

Neil looked down at the speedometer of his Ferrari—seventy-eight miles an hour. He looked at his watch. No record today, he thought.

No, no, I’m in, of course. How much can I get?

It’s tight, but I can probably get you about a hundred-thousand of each.

Sounds good. How’s the overall portfolio today?

Red hot, red hot. You are up another four-percent this morning. Brings your total with us to about two-point-two million.

And I am still ninety-percent Internet stuff?

Only the hottest market around, Neil, my man. Why do you think it keeps going up? I can sell all of it and throw it into AIG, Fannie and Freddie if you want, but you won’t need me then. You can just sit there and watch it go up by four percent a year all by yourself. You can be nice and safe like my eighty-year-old grandma.

No. I like what you’re doing.

Trust me, Neil, go do what ever mortgage stuff you do and let me do my job by making you money.

Great. I have some new stuff coming up in a couple of days. I’ll call you.

Sounds good.

Neil hung up the phone and stepped down on the accelerator. The speedometer jumped up to eighty-five, then ninety, then a hundred. He watched as the palm trees lining the road sped by him, their figures seeming to blend together. He eased up just as quickly as he had accelerated, going back to a comfortable seventy-five.

He looked at his watch as he pulled into the parking lot of Katana Mortgage, a non-descript one-story tilt up. The parking lot was filled with what seemed like every make of sports car and the black top was stained with rubber from loan officers showing off for the receptionists. He pulled into his reserved parking spot and checked the time; a new record.

The day just keeps getting better, he thought to himself.

Chapter 3

It’s not about rates and fees. It doesn’t matter what you quote them. Hell, every idiot with a headset can quote them the same rate you’re offering or better.

Neil stood in front of the training room as he had every Monday morning for the last two-and-a-half years. A new crowd of fresh young faces; some in suits who just finished off their business degree and others who had been selling cars last week. Some were born salespeople, no education to speak of, but a phone voice that could sooth even the grumpiest of old men. Few of them had any formal mortgage training. Neil could care less. Neither did he.

Have you listened to that crap on the radio on your drive in every morning? he continued. Every twenty-five-year-old kid in Orange County who used to sell piece-of-shit cars or drugs on the weekends is hocking loans these days. The big guys are spending millions a week so that everyone knows they have a no points, no fees, low rate loan.

The truth was that this group of ten would be like any other group of ten. All would start in the back room with no windows, rows of small cubes and phones, and no headsets. Doors opened at five in the morning in order to hit the East Coast borrowers on their way to the office. The best would be waiting at a quarter ‘til for the door to open. The cameras would pick up their faces as they approached and then entered the front doors. Neil would review the tapes later each morning to see who was there first so he could spot those with the most ambition.

The shop closed at eleven each night—which was eight o’clock in Hawaii—and about as late as Neil was comfortable calling people at home. Eighteen hours a day that room hummed and the best of the recruits would log twelve to fifteen hours days. Make Hay While the Sun Shines read the sign over the entrance to the sales floor—which was a bit ironic as the sales floor resembled a casino; dark, no windows and the phones ringing like coins dropping from a winning slot. Every day, excited people dialed for dollars with no idea what time of the day or night it was. Neil had even looked into having oxygen pumped into the room, like they supposedly did in Vegas, just to keep everyone wired. Instead, he settled on less expensive coffee, soda, and energy drinks—all a twenty-three year old really needed to survive. Throw some vodka in a Red Bull at night and Neil learned they could go straight through until the next morning. Hell, some wouldn’t even bother changing clothes from the clubs the night before and came into work straight from the after party so they could hit the East Coast for a few hours and then roll right into the California morning crowd. By eleven they were off to the gym and lunch.

The newbies all started by dialing on declines, old leads that had died somewhere in the process. If they proved they could bring a few deals back to life then they would get a shot at the floor. The deal was the same for all—well almost all—and it was something they all strove for.

You can work here on one-hundred percent commission. Neil stared at each face in turn. If you don’t like that then go back to Starshmucks! You have to work at least half days here. I really don’t care which half you work, but no one has made it here on less than that. Remember, there are ten more people interviewing right now for your job. Every Monday I start a new class of wannabes, just like you. In two weeks, half are gone and after thirty days two will end up on the floor. Yep, that’s only twenty-percent, in case you can’t count. If you haven’t figured it out, this is not like every other shop in Orange County. This is not Ditech or Countrywide or Lending Tree. If you want to be an order taker, get your two G’s a month and one hundred bucks a loan for answering the phone all day, then go work there. I send my rejects to them all the time and they hire them. Here we do loans that no one else can do. We lend money to people who the banks don’t want. We don’t do A borrowers with seven hundred ficos who can walk into Wells Fargo and get five percent and no fees. We’ll charge that same guy seven percent and ten-thousand and he’ll thank us!

He smirked at their confused faces. That’s right, because we don’t do mortgage loans. Here we give people what they want—money! That’s right. We take people and give them every last bit of cash we can squeeze out of their homes so that they can buy furniture, put pools in their backyards, and buy their mistresses new cars. We don’t care what they do with the money. But, we know one thing for sure; every last one of them wants the cash!

Neil looked around the room again. He fought the urge to frown and shake his head. Typical shit, he thought. Four were hanging on my every word, three looked like they had heard it before and three are a day away from asking, would you like fries with that?

Neil looked over the heads of the ten newcomers to a man leaning against the back wall. I’d like to introduce you to your team leader and mentor. Jared is an old timer here. He started here eighteen months ago. He’s twenty-five and had barely made it through high school. When I found him he was parking my 740i at Il Foranio. I took him under my wing and last year he made six fat G’s and he bought my old 740i. Not that he drives it much. Jared has won the top manager award every month for the past year. He drives the convertible black Mercedes you saw parked in the Top Gun" spot outside.

Jared walked around the group toward Neil, his arms crossed and staring at the newbies as if they were pieces of road kill. He stood just over six feet and was solidly built with not a bit of fat on him. His deep, California-tanning-bed-brown skin along with his blond hair, blue eyes, and big, perfect white smile gave him the appearance of a hungry shark. Neil nodded at him and continued.

He has a team of nine on the floor right now and he wants two more people on his team. The average earnings last month of Jared’s team was seventeen thousand. That’s right, but don’t kid yourself. Jared is a slave driver. Everyone of them works fourteen hours a day, six days a week, plus two hours off midday for the gym. That’s right, that’s sixteen hours a day. The guys who earned twenty a month plus were here eight hours on Sundays as well.

Sunday is my favorite day to make calls, Jared said as stood next to Neil. Everyone is home on Sundays, and they are all in good moods. Hell, I wish every day was Sunday.

A guy in a dark blue suit in the back of the room put up his hand. Excuse me, but I spend my Sunday’s at church.

Jared looked at the guy in the suit for a moment and then glanced over at Neil. Neil just stood still, expressionless. Jared strode to the back of the room and slammed the door to the training room open. Get the fuck out!

Excuse me? The guy in the suit puffed his cheeks in and out like a fish out of water. I-I don’t…

Jared slapped his hand against the doorjamb. Did I fucking stutter? Now, I know I don’t fucking stutter, because if I fucking stuttered than how the hell could I make fifty thousand a month closing loans over the phone? Now, I said get the fuck out of here! Jared pointed at the open door

The guy in the suit looked from Jared to Neil and back again. Neither moved as they stared back at him, silent. He looked around the room at his equally-shocked colleagues.

You want me to leave? he almost squeaked. You’re kidding right? I just said that I go to church on Sundays only, not that I wouldn’t work the rest of the week. He squirmed in his chair.

Jared and Neil both glared through him.

The guy stood and balled his hands into fists. Fine, you want me out of here, I’ll leave. There are a hundred places better than this in O.C. Paper’s full of wanted ads. You guys just have the biggest one in the paper. There’s no way I want to work for a couple of jack-offs like you anyways. He turned to leave and tripped over his backpack, almost falling into the wall. A couple of people in the room laughed. The expressions on Neil’s and Jared’s faces did not change.

The guy grabbed his backpack and stormed out of the room. Jared waited until the door clicked shut behind him and then slowly walked back to the front of the room to stand beside Neil.

The first rule of closing is to shut up! Jared bellowed, crossing his arms once more. You close and then you shut up. You don’t sit there and verbally throw up all over yourself like that guy, get it? You shut up! He never would have made it through the first week. He’s weak and he doesn’t really want to work. Jared took a moment to stare at each one of the new recruits directly in the eyes.

All right, you can all get up and head over to see Helen in Human Resources. She will set you up with your paperwork, key card, computer login, email account and your desk. It’s eleven o’clock and Neil and I need to get to the gym. I’ll be back to start your training at one.

Neil headed out the door without looking at anyone. After all, only two are going to make it anyways, why bother getting to know them now? It would be a waste of time. He would wait and see who the final two were first.

Jared moved to follow Neil when someone cleared his throat.

Excuse me, Jared, but there are health benefits, aren’t there? A young man in jeans and t-shirt asked.

Jared kept walking through the door. No idea. What the hell would I need health benefits for? I’m twenty-five. Ask HR. Jared’s voice trailed off into the hallway.

Does anyone know where HR is? a blond kid with a surfer drawl asked.

Nope, but we better find it before they get back. Something tells me we better be at our desks and ready to go at one, the guy in the t-shirt answered.

Dude, you are the master of the obvious. The surfer got up and headed out the door. One by one the others followed.

Chapter 4

Another Monday, another group of monkeys.

Jared stood in back of the bench press spotting for Neil, as Neil finished off his second set.

Neil finished and dropped the bar onto the steel rests. That was funny. I didn’t think we were going to find the sacrificial lamb this time.

There’s always someone dumb enough to open their mouths. Jared walked over and put two more twenty-five pound plates on the bar.

"I almost started laughing, I mean…church. You fired a guy for wanting to go to church. That’s a new low—even for you." Neil laughed as he moved out of the way for Jared, standing to spot.

Stop, you’re making me laugh… Jared grunted. I’m going to drop this fucking thing and you’re not strong enough to lift it off my chest! Jared groaned as he pushed the bar half way off his chest.

Neil leaned down to yell into Jared’s ear. Don’t use me for your excuse for being weak. Push, you pussy!

Arg…shit, shit, shit! Jared barely managed to get the bar back on the rack.

Great set, even for a pansy-ass like you. Neil grinned and slapped Jared’s arm. The look on that guy’s face when you told him to get the fuck out was priceless! Even better than last week when you told that chick to go back home and live with her mother.

Shit, we can’t have lazy people here. I have to sacrifice one so everyone gets it, you know…to set the tone. Those shitbags need to be afraid of me or they won’t respect me. And if they don’t respect me, they won’t work eighteen hours a day. Jared spit out the words as he sat on the edge of the bench catching his breath.

That’s right, you’re doing great! Couldn’t have done a better job myself. Remember the first time I had you can someone from the training class? You were looking around and around and finally that poor bastard coughed and you screamed at him to get the fuck out. Now that was priceless. You were so anxious to fire someone that the asshole just coughed and you tossed him to the street. Neil could barely contain himself.

Jared stood up. I hear he ended up at over at Centennial, and they finally shitcanned him after six months and forty thousand in wasted leads on the guy. I’d say my instincts are pretty damn good. Just what you want in a partner, right Neil? I’ve got your back.

That you do. Neil stopped laughing. Let’s head over and finish up with some curls.

Sounds good.

They stood and started to walk towards the other side of the gym.

Jared stretched his arms as they moved and looked sideways at Neil. Say, how are you doing on that partnership stuff?

Neil picked up a set of dumbbells and started a rep. Um, good. Just slow going. These kinds of things take time, you know. Lawyer bullshit and all that crap. They need to write the whole thing out, dot every ‘I’ and cross every ‘T’. It takes forever, you know? I should have it all back in a month or so. I’ll review it on my way to Europe in June. We should have it all wrapped up by the end of the summer, I’d say.

Neil’s tone took on a much more business-like manner every time Jared brought up their potential partnership. Neil had promised to give Jared ten percent of the company if he was Top Dog for six months running.

Jared had managed to be Top Dog for ten months straight now.

Anyway, do you think we could get it done before you head to Europe? It’s kind of a big thing to me. Jared was pumping through his set as he asked the question.

Look Jared, you know I’ll take care of you. I’m buried though. You keep pushing me for better leads. I have every marketing geek I can find coming into the office pitching me on everything from more direct mail to ads on grocery carts.

I know, Neil, I just—

This is not easy stuff, man. If I don’t dial in the marketing then those phones don’t ring, your paycheck disappears and you have ten percent of a company that doesn’t fund any loans. You tell me what you want: your agreement or leads. I can’t get both done before Europe, so what’s more important to you? Neil’s ears went red and spittle spewed from his mouth as he spun on Jared.

Jared suddenly found renewed strength from his anger and pushed himself through another twelve reps while Neil finished his infamous lead speech. Jared had heard this one at least six times in the past month.

Nope, you know I want the leads, Neil. I guess we’ll finish it off when you get back from your trip.

That’s right. I promise we’ll get it done, I’ll take care of you. We’re partners. Neil’s ears slowly faded back to their normal color. How about we go do some legs and harass that new hottie trainer for a bit?

You go ahead. I’ve got to get back, Jared said, dropping the dumbbells on the stand and wiping his forehead with a hand towel. I’ve got to do my Mortgage 101 talk to the newbies, check on my team, and I want to get a couple of hours on the phone tonight. Plus, I promised Meghan I would be home by nine for dinner tonight.

That’s right, Jared, kick some ass, Buddy! And don’t forget we’ve got the Top Gun Vegas trip in two weeks. I promise you that will be a trip you will remember.

Neil talked to Jared’s disappearing back, but his eyes were on a brunette who had just walked over to the aerobics room. He glanced down at his watch. Twelve-thirty. His favorite time of the day. Neil casually walked over to the glass aerobics room and stationed himself outside with a perfect view as he started to ease into a thirty minute stretching routine.

Jared grabbed a protein shake at the club’s cafeteria and went out the front door to the valet parking. His—well, the company’s—Mercedes was parked right up front waiting for him. Jared always tipped the valet guys five bucks to leave it right by the front door. At twenty-five he hated waiting. Patience was not a virtue he believed in—hell, it wasn’t even a word he could spell.

Chapter 5

Jared slammed the car into drive and peeled out of the gym parking lot, leaving rubber all over the road. Neil had asked him why the Mercedes needed two sets of tires in ten months and Jared had simply responded that the alignment must be off and he’d have it checked out.

Jared pulled into the parking lot of Katana Mortgage and right into his Top Gun parking spot. It was ten minutes after one; just enough time to check a couple of messages and high five some of the team and make it back to the training room for a little Mortgage 101.

Jared walked in the front door where Allison, the receptionist, was sitting behind a large mahogany desk with a phone to her ear. Allison was like all the other receptionists and assistants at Katana, she was a much better looking girl than he or Neil would have ever been able to get in high school. She was way out of Jared’s or Neil’s league…and frankly the league of most every other guy.

I love having hot chicks around, Neil had said on Jared’s first day. It’s kind of like having plants in the office; they make the place look nice and, even better, it makes all the guys want to spend more time at work than at home.

Neil had gone out of his way to make sure that Katana was the perfect home away from home. This was not high school. Times had changed. Jared was now the star quarterback and this room of guys on phones were on his field. His turf. The receptionists, well, they were the hot, popular cheerleaders who never gave him the time of day. Jared held his chin up and walked past Allison’s desk to the sales floor, pretending not to notice her as she smiled at him.

The floor was divided into fifteen pods of cubicles, ten currently in use. Each pod housed a team of eight to twelve loan officers, each with a standard cube and then one doublewide cubicle for the team leader. The front of the room had a bank of six phones answered by more young, beautiful women who’s sole purposes were to answer phones, log the calls and forward the calls to a waiting loan officer.

Jared walked behind the front counter past a few of the girls, smiling but not really giving them too much attention. He glanced over one girl’s shoulder at a computer screen and checked the call volume.

A quarter after one and four hundred calls so far, he praised. Not bad. Make sure my team gets a few extra calls today. I need to make up some ground after all this training I’m doing.

He didn’t wait for an answer and started down the walkway between the cubes towards his team in the back of the room.

Each team had their own name and theme—The Loan Warriors, Team ABC, Always Be Closing, Boiler Room, The Pirates of Funding, Mo Money, The Red Bull Matadors, and Team Monster. Each had a decorated banner hanging from the roof above their pod, displaying their team pride. The walls were covered with magnetic whiteboards. Each team had its own board and each board was covered in magnets that represented a borrower in various stages of the loan process.

Jared loved the floor, especially since he had helped grow the sales floor from three teams to ten in the eighteen months he’d been working for Neil. He hoped to soon fill those remaining few pods to bring himself that much closer to partner.

His team stood out from everyone else. They were the most arrogant loan officers in O.C., probably the country. The Loan Sharks were the obvious team to be watched and chased, partially because they were on a different level then everyone else. Literally. Four months ago, Jared had his entire team come in one Sunday night to