To be honest, I was a little skeptical reading a memoir of the mortgage meltdown from a 6'4'' tall subprime lender with a thick goatee. However, after slowly creeping into the tales and unfoldings of Bitner's subprime lending company, my prejudgment began to fade and I was hooked. While allowing a smooth mixture of anecdotes from the subprime industry coupled with detailed descriptions of a few of the first mortgage backed securities which were sold to investment banks, there is a good chance that Bitner's book is most likely the best on the market for the mortgage and real estate non-savvy. Being a fairly easy and quick read (I read it on a plane ride from San Diego to Washington, DC), I learned more about the failing credit market reading this book than the likes of Philips' "Bad Money" and Morris' "Trillion-Dollar Meltdown". Bitner's description of how mortgaged backed securities are packed and sold from start to finish and how the incentives of credit rating agencies are completely lost and tangled up due to greed couldn't be more informative as well as entertaining.

One would tend to be swayed into thinking that Bitner lets himself and other subprime lenders off the hook in terms of being caught between greedy investors thirsty for more MBSs to tranche up and sell off and the sleaze-ball mortgage brokers looking everywhere they can to sell a corrupt loan package. However, we see clearly that when a mortgage broker commits fraud, the lender must prove it to make the broker buy the loan back; a nontrivial task requiring much capital. Thus, fraudulent brokers were simply denied business. The investment banks above the lenders who bought the mortgages only needed proof that fraud has occurred to force the originating lender to buy it back; an unfair disadvantage for lenders as Bitner tells us he found over 70% of brokered loan applications submitted to his firm were fraudulent, forged, or false. The real problem of the subprime meltdown? The sleazy mortgage brokers.

Quite an entertaining read of our latest financial disaster while being thoroughly educational. Bravo Mr. Bitner.

This book will basically confirm what you already know about Subprime loans, if you believe that lots of people knew the system was broken, but chose to look the other way because it was profitable. The author talks about how the system encouraged and accomodated fraudulent players, while "consciencious" players (such as the author's firm, of course) played by the rules and remained completely above the fray. The author was shocked by the behavior of other subprime middlemen, but his company made millions and grew due by focusing on these types of loans.

It's a quick read, and useful if you know nothing about the industry, as it identifies the basic players participating in the provision of subprime loans, and their functions. I suspect you could get as basic a primer on the internet for free, without the specific examples provided of system abuses.

I liked the book, and it reminded me of how greedy and corrupt
human nature has become, all in the name of the almighty dollar.
This has been an extraordinary demonstration of pyramid schemeing
to the nth degree.

If you want to understand the current Subprime crisis, this is the book for you. I was trying to find some books in Jun 2008 on this Subprime and Credit Crisis topics since from reading the daily news on this, I didn't have a clue what is subprime, prime and all these.

At that time, I found only this book on the topic of Subprime, which was just published 1 week ago then. I was skeptical of this book, but had no choice but to try this book.

I am glad i picked it up. The best thing about this book is it's presentation of these complex topics in a simple and interesting way with practical experiences and case studies from author's experience as a Subprime lender. It starts with how mortgage markets (both prime and sub-prime) work, the roots of the current crisis and author's suggestions for resolving the crisis. Though this book mainly focuses on Subprime, you will get a good idea of how mortgage markets work in general.

This book may not be a complete look at the Subprime since author's experience was not vast in this field and also his experience seems to be more as a Small Subprime mortgage lender.
Also, one complaint I have about this book is, author's pompous tone, especially at the beginning of the book.
But, despite the above, I think, because of the lucid way author explains the things, this book is more than worth its weight and very helpful in understanding current Subprime crisis. So, i am giving it 5 stars.

I was reading this book along with another good book The Trillion Dollar Meltdown, which is a macro level take on the Credit crisis. I recommend both the books.

Am in the process of reading this book. So far, I like it. The writer uses humor to get his point across, and it adds to the quality of the book. The old saying, If I don't laugh, I'll cry, certainly applies here.
Recommend it.

We could see it coming. Lenders were lending more then 100% of value. All fine in a rising market but when values go down then what?
So many players in this game. Not just one at fault.
Anne

This guy blames mortgage brokers and appraisers for the multi-billion dollar mess we are in. Are you fricking kidding me? No wonder this book went straight to softcover. The publisher didn't bother putting a hardcover out; it is the equivalent of a "straight to video" movie.

To be upfront, I worked for Richard Bitner for quite a long time. He was/is one of the most intelligent people I have ever been associated with.

When he mentioned he was going to write this book, I honestly didn't know what to think. After reading it, I truly think he has hit the nail on the head.

This book pulls back the preverbal curtain and explains (in laymen's terms) what actually happen with the mortgage industry.

I recommend this book to any and everyone! It is an incredible read.

Confessions of A Subprime Lender: An Insider's Tale of Greed, Fraud, and Ignorance by Richard Bitner, is a must read for every loan originator. Mr. Bitner mentions his personal criteria to "making a loan" is that the loan make sense and that it better the borrowers position. It appears that somewhere along the line he lost sight of that very important aspect of mortgage lending. I am a licensed mortage broker and I find it hard to understand how a loan originator could put their greed first and the borrower second. I mean, how do you justify a $1,600 a month mortgage payment to a borrower that can't make their $850 monthly rent payment on time? The book is well worth the cost and I highly recommend it to anyone that is interested in reading about what went on behind the scenes and how loan originators justified making the loans to people that could not afford them. It's easy to blame the Lender's for this mess, after all, the loan originator does not loan the money and the Lender is the one that offered the programs. All the loan originator did was follow the Lender guidelines. Yep, follow the guidelines and don't worry about whether or not the borrower could afford to make the payments.

The value of Bitner's book is that it helps readers understand the players and their roles in today's subprime mortgage mess.

When a mortgage broker commits fraud, the lender must prove it to make the broker buy the loan back - hard to do legally, requires a long time, and usually they don't have enough capital to do so. Thus, lenders usually simply cut fraud-perpetrating brokers off from future business. An investor (big buyer of mortgages) only needs proof that fraud has occurred to force the originating lender to buy it back. Eventually, Bitner found over 70% of brokered loan applications submitted to his firm were somehow deceptive - thus, everything needed to be double-checked. The greater the number of new mortgage brokers, the greater the number of problems.

Good brokers can locate the best product and price to meet a borrower's needs; however, they have little control over the loan process, add steps to the process, and are largely unregulated.

Sub-prime borrowers' main concern is getting approved. This leads to being advised (legitimately) to not talk to competing brokers because their pulling the borrower's credit report lowers their rating and chances of getting the loan. The process of obtaining a home loan, especially for a first-time borrower, is also emotionally draining, thus providing further incentive for subprime borrowers to stick with a single broker. However, if the broker only presents a single offer, the stage is set for taking advantage of such borrower.

Brokers originated 25% of prime loans in 2003, and over 50% of subprime loans. The disparity is because direct lenders usually win a price war involving brokers, while there are over 100 wholesale subprime lenders available for subprime borrowers to consider.

Common Subprime Fraud Problems: 1)Borrower indicates he'll occupy a property when actually purchasing it as an investment. 2)Falsifying employment history via friends or relatives. 3)Omitting critical information - eg. another property owned that is in default. 4)False information - eg. increased number of credit lines, excluding selected reporting agencies, providing old credit reports, inappropriate selection of "comparable" properties.

Rating agencies generate about three times the fee rates from mortgage securities vs. corporate bonds; in either case, they incur no liabilities, thanks to 100-some pages of disclaimers. Only a handful of non-financial corporations get the highest AAA ratings on their bonds, while almost 90% of mortgage obligations did so.

Subprime Growth Keys: 1)S&P concluded in 2000 that taking out a second loan in lieu of providing a down payment was no more likely to default. Others followed; reversed this policy in 2006. 2)Loosened lending standards. 3)Interest-rate drops led to rising home values, increased motivation to buy or refinance, and looser lending standards. 4)Allowing borrowers (especially in Las Vegas and Miami) to buy multiple properties.

Bitner's Recommendations: License brokers, clearly define the terms that must be disclosed in a mortgage, assign appraisers randomly or require they be chosen from a specified list, and restrict the severity of ARMs resetting.

Wow(!), there sure are a lot of reviews here that make this book sound like the definitive work for explaining the mortgage meltdown. I'm not the smartest bulb in the room (at all) when it comes to this kind of stuff, but I found I knew most of what was discussed in the book before I read it. To be sure, it's an easy read (of the lazy summer weekend kind) and a fun one (lots of incompetent borrowers, sleazy brokers and greedy investors - this is mostly an anecdotal book), and it does a pretty good job of simplifiying things, but in the end, I was disappointed. Worth the money and the time, but less substance than I expected.

The thing that irked me the most is that Bitner REALLY lets himself (and to a large degree, other lenders) off the hook here. Oh sure, in the end he says he blames himself too, and 'gee gosh', he should have known better, but I never get the impression he really means it or takes any real responsibility. Of all the institutions and people he blames for this mortgage mess, he makes it sound as if his group is the least culpable,- caught between crooked brokers and greedy investors. I just don't buy it. In the end, he's too self-serving, and trying to have it both ways. I get the impression he wants the reader to feel sorry for him, and I don't.

While I appreciate the fact that he did write this rather light examination of the subprime industry, I can't get past the fact that he made lots and lots of money exploiting the system, as he exploits the mess now by selling a book about it. And all the time, there are a lot of folks who have been screwed and thier lives turned upside down, partially because of his actions.

In the end, all of us are paying and will continue to pay for his (and of course, many others') unethical behavior.
Doesn't sound to me like he's changed; he's just found another angle.

Watch Video Here: http://www.amazon.com/review/R1O36HHVGUEEV1 The author of this title was on Financial Sense news hour. The author makes the reader ponder some difficult questions. Why were operations allowed to be handled in such a manner. Why should the tax payer have to bail out Fannie and Freddie? If you are wondering what is reading this it is a program I learned about in the book, Don't Like to Read, Then Don't, Listen!: How to Turn Any Type of Text Into Audio Files That Can Be Read to You!

The best book I've read in a long, long time. This should be required reading for EVERYONE in public office. You should not be allowed to utter a single word on the mortgage crisis until you've read this book.

This book provides an excellent overview of the subprime problem. If you're interested in knowing about the different parties involved in the mess and the role each one played in the ultimate outcome, this is a good starting point.

I would have liked to have seen a bit more discussion about the specifics of how larger banks can be affected by the problem, since that is one of the main concerns of the current crisis. Much of the in-depth discussion is focused on the end of the business closer to the customers -- brokers, appraisers, and lenders. There is some discussion about the role investors, agencies, and investment banks play, but it's relatively minor.

The subprime biz has been around, or at least WAS around, for a couple of decades now. I enjoyed the book but also being in the business for twenty years I knew all of what Bitner was writing about.

The subprime decline didn't have to happen. Those in the subprime business knew the risk threshold as they kept lower qualifying guidelines but also saw the huge profits they could gather. Forget the money the broker made, some of these packages yielded 107 for the wholesale lender when sold. It's easy to turn your head if you're so inclined.

Those who have been in the subprime business for any length of time knew that the hammer would come down and hard, it's just that some of them knew when to cash in their chips and move on. Interestingly, Bill Dallas, the king of "know when to sell" was a casualty. Perhaps this book is some sort of confession to atone for financial sins.

Buy the book if you want to know the "retail" side of the business, but not much depth when it goes beyond that point. If you're in the mortgage industry, especially if you're a loan officer, this will give you some behind the scenes details you wouldn't know about. I read this book in about 3 hours and couldn't put it down.

This book is well written. It explains the subprime business in a way anyone can understand without being condescending. Not only that, it goes on to analyze why this mess happened, and what might be done to prevent it from happening again. Great book.

I read the Newsweek article and I find it funny that Mr Bitner was cashing these HUGE paychecks while wondering how these borrowers would pay for the loans. Bet he wasn't losing any sleep while driving his $100,000 car and living in his million dollar house. I think its laughable that he puts most of the blame on the brokers. I've been in the mortgage business for 12 years and have always strived to get my customers the best rates and loans for their particular situation. By and large, the vast majority of brokers do the same. We're getting bad press from this guy so he can appease his guilty conscience. Mr Bitner, why don't you tell the public how many points you had stacked into your loans you sold off to Wall Street?? Thats the REAL evil in this was Wall Street. They kept pushing all these putrid subprime backed securities and didn't care if the borrower could pay the loan if it went to an ARM. Well that and based on the idiotic belief that houses will ALWAYS appreciate. Bear Stearns was bailed out by Washington and they were the biggest player in this. Hmmmm don't you think the "speculators" in oil futures right now are hedge funds and Wall Street trying to make up for losses on subprime Mortgage Backed Securities. The brokers, lenders, and borrowers were only pawns in a game by Wall Street to reap billions in profits. Now THEY are reaping what they sow.

One last thing Mr Bitner, if you want to truly do something good for the borrowers out there who are suffering...why not donate all your profits to the New Hope Alliance? Help people going into foreclosure instead of coming across as a weasel whos still trying to cash in.

This book does a great job of pointing out the inconsistencies in the industry - inconsistencies that led to the collapse of Subprime lending.

The book is a flowing read that someone who does not know the industry can read and gain an understanding of the Subprime mess. Every potential homebuyer should read this book.

If you want a book that tells you why things went so wrong in subprime lending, this is the book. Not only is (or more correctly, was) the author an insider in the industry, he is bright, extremely perceptive, and, most importantly, he has a conscience. In addition, he is an extremely able writer. He takes a topic that others have reduced to technical mush and presents it in a clear, precise, pointed fashion. The book is a nice collection of on-the-ground examples placed in a perceptive and morally-balanced "big picture." There are insights here that you won't find anywhere else.

Let me make it clear: I have no connection with the author in any way, shape, or form. I was looking for a good, well-written book that gave me new insights into the sub-prime mess. I bought five different books. This one was clearly the best. A couple of the others were useful, but they didn't have the appeal of hearing all of this explained by a very bright, extremely knowledgeable insider.

If you want to know how all of those banks in Europe got duped into buying bonds backed by laugher mortgages, or how Bear, Stearns got taken down, you want to continue your search. But if you want to know how this massive market failure happened in the first place, this author, Richard Bitner, will tell you.

Bitner's take on subprime lending reads like an insider's indictment of a process that was doomed to fail the minute it first was set into place -- and he's not above blaming himself, which is refreshing. But his book gives the inside dirt that no reporter would ever get, on how borrowers were squeezed into loans and what brokers do to dupe lenders into making bad loans. It also gives some down-to-Earth suggestions on fixing this mess.

I bought it because the WSJ reviewed it and gave the book a thumbs up. In this case, the WSJ was spot on -- this is a five star book all the way!

I read Richard Bitner's book from cover to cover and did not want to put it down. As one who has been in the mortgage business for over 30 years, working in various industry segments including retail origination, wholesale lending, correspondent lending and private mortgage guaranty insurance (residential loan default insurance), I was impressed by how Richard managed to put all the key pieces together on the subprime crisis and did it with such an honest, insightful and refreshing candor.

After all my years in a business that insured lenders and mortgage investors against residential mortgage loan defaults, I understood we were headed for trouble with massive mortgage defaults, simply due to all the irresponsible lending practices with loan programs that had multiple layers of risk where buyers had little or no skin in the game and originators had even less. There is lots of blame to go around and Bitner does not spare any of the many participants from being assigned their contribution to the crisis.

As my friend used to say: "This has got to be true because you couldn't make this stuff up." That clearly applies to Bitner's weaving of such a bizarre, but sadly true story. I used to use an expression of my Grandmother's about the subprime "stuff" I observed in the mortgage industry and what I felt would happen. I said: "The chickens will be coming home to roost." Bither gives a great account of how all those eggs got laid and how the fox was in charge of the hen house. This crisis in housing and mortgage finance has already been devastating and it is far from being over. This is an easy read to gain a keen insight in what happened and how it happened. Whether you in the lending industry or not, chances are you have been impacted directly or indirectly by this debacle. Reading this book will help you understand the who, what, when, where and why. I highly recommend it.

Bitner's book is a candid, insider's look at the subprime mortgage meltdown. He clearly explains the origins of the problem and how it became one of the most serious challenges to face the U.S. economy in the last 50 years. He also offers some solutions to help prevent this from happening again. The book is a must read for homeowners, investors and industry professionals trying to understand what happened in the subprime mortgage market, how it will potentially impact them, and what to do about it. A timely book!