Summary of “Small-Time Bankers Make Millions Peddling Mortgages to the Poor”

Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent-$12,500 on a $250,000 loan, to be distributed among his staff, corporate headquarters, and, of course, himself.
Many are companies you’ve never heard of, like American Financial Network, a closely held firm based in Brea, Calif. A few are better-known, such as LoanDepot, Freedom Mortgage, and the industry leader, Quicken Loans, with its ubiquitous Rocket Mortgage television commercials.
Unlike the usurious loans of the past, federally backed mortgages can charge low rates-often less than 5 percent-and require documentation of jobs and income.
Nonbank mortgages make up about 80 percent of the loans for borrowers insured by the U.S. government.
Now, as long as lenders follow the rules for writing loans, the government guarantees FHA mortgages.
Even in a strong economy, recent FHA loans are souring faster than those made years ago when the industry had stricter credit standards, the Mortgage Bankers Association says.
Pitching government loans, top mortgage officers can make millions a year, according to Jim Cameron, senior partner at Stratmor Group, a mortgage industry advisory firm.
After graduating from the University of Houston with a finance degree, Christian worked as a loan officer at Ameriquest Mortgage Co., a subprime lender that sold its lax underwriting standards in its slogan: “Don’t judge too quickly-we won’t.” The company collapsed in the credit crisis.

The orginal article.