{"id":1971,"date":"2008-01-13T12:39:51","date_gmt":"2008-01-13T19:27:51","guid":{"rendered":"http:\/\/lukeford.net\/blog\/?p=1971"},"modified":"2008-01-13T12:41:25","modified_gmt":"2008-01-13T19:29:25","slug":"roland-arnall-the-godfather-of-subprime","status":"publish","type":"post","link":"https:\/\/lukeford.net\/blog\/?p=1971","title":{"rendered":"Roland Arnall – The Godfather Of Subprime"},"content":{"rendered":"

From the Orange County Register<\/a>:<\/p>\n

Established in 1979 by Roland Arnall, Long Beach Savings grew rapidly after Wall Street opened the credit tap. It moved to Orange in 1991 and gave up its banking license in 1994, converting to a pure mortgage company.<\/p>\n

In 1997, Long Beach Savings split into privately-held Ameriquest and a publicly traded subsidiary, which sold for $350 million in 1999 to become the subprime arm of Washington Mutual Inc.<\/strong><\/p>\n

Other companies were started by executives who learned the ropes at Long Beach Savings: ResMae Mortgage Corp. <\/strong>in Brea in 2001 and Encore Credit Corp. <\/strong>in Irvine in 2002.<\/p>\n

"We did it here because you had a lot of talent," said Jon Daurio, an alumnus of Long Beach Savings who co-founded Encore and now runs a company that buys distressed mortgage loans. "You also had the Godfathers of subprime."<\/p>\n

Daurio said the Godfathers were Arnall, Brian Chisick of Irvine-based First Alliance Mortgage Co<\/strong>., Russell and Rebecca Jedinak of Guardian Savings & Loan <\/strong>in Huntington Beach, and John T. French, founder of Santa Ana-based Plaza Savings & Loan<\/strong>.<\/p>\n

French, now 76, said in an interview that the local lending industry evolved in response to market and regulatory changes. French worked with clients who had black marks on their records – a bankruptcy, missed payment, divorce – but who on close inspection seemed reliable.<\/p>\n

"The idea was to broaden the spectrum of underwriting," said French, who lives in Newport Beach.<\/p>\n

Like Long Beach Savings, Plaza and its executives gave birth to a brood of subprime lenders: Option One Mortgage Co., <\/strong>New Century Financial Corp<\/strong>. and Encore.<\/p>\n

Ameriquest, Encore, New Century, Option One, ResMae and Washington Mutual all exited subprime lending in 2007. Many of the principals of those companies declined to be interviewed.<\/p>\n

Arnall was appointed U.S. ambassador to the Netherlands in 2006 after Ameriquest agreed to pay $325 million – without admitting wrongdoing – to settle predatory lending investigations in 49 states. He did not respond to requests for comment.<\/p>\n

Many subprime companies collapsed in the late ’90s when world credit markets were slammed by debt crises in Asia and Russia. The survivors got a big bounce after the Federal Reserve slashed interest rates to juice up the economy following the dot.com bust and Sept. 11 attacks. The low interest rates ignited a real estate and refinancing boom that put the subprime industry on steroids.<\/p>\n<\/blockquote>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

From the Orange County Register: Established in 1979 by Roland Arnall, Long Beach Savings grew rapidly after Wall Street opened the credit tap. It moved to Orange in 1991 and gave up its banking license in 1994, converting to a … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[591],"tags":[],"class_list":["post-1971","post","type-post","status-publish","format-standard","hentry","category-roland-arnall"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t