A banker involved in subprime lending during the housing bubble in Florida shares his regrets with NYT columnist Nicholas Kristoff.
James Theckston, a former regional vice president for Chase Home Finance, says bankers were encouraged to hand out subprime loans, especially ones that were likely to fail.
He realizes this was wrong:
One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.
These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.
