Michael Moss & Geraldine Fabrikant:
Herbert Sandler, the founder of the Center for Responsible Lending, is standing in his bayfront office watching a DVD that trains brokers to pitch mortgages by extolling the glories of the real estate boom.The video reeks of hucksterism, and it infuriates Mr. Sandler.
"I would not have approved that!" he declares. "I don't think we should be selling our loans based on home prices continuing to go up."
But the DVD was produced in 2005 by a mortgage lender that Mr. Sandler and his wife, Marion, ran at the time: World Savings Bank. And the video was a small part of a broad and aggressive effort by their company to market risky loans at the height of the housing bubble.
The Sandlers long viewed themselves -- and were viewed by many others -- as the mortgage industry's model citizens. Now they too have been swept into the maelstrom surrounding who is to blame for the housing bust and the growing number of home foreclosures.
Once invited by Congress to testify about good lending practices, the Sandlers were recently parodied on "Saturday Night Live" as greedy bankers who handily sold their bank -- and pocketed $2.3 billion in shares and cash -- in 2006 before many of their loans began to sour.
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