After The Crash, Former Mortgage Brokers Find New Meaning In New Ventures

By Curt Nickisch
Feb 10, 2010, 5:18 AM
20 Comments

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Craig Good, a former mortgage broker, runs a fruit stand at Boston's Old South Meeting House. (Curt Nickisch/WBUR)

TEWKSBURY, Mass. — In a dining room, Laurie Souza is turning over a ring under a magnifying glass. “I can tell it’s gold,” she says. “I can see the ‘K’, it’s just worn off.” Two dozen people are looking on. She weighs and sorts by karat gold bracelets, earrings, tie-tacks, and then makes out a check to the owner.

“Three hundred dollars,” Souza says. “Not bad.”

A year ago, Souza started a company called Gold to Green Parties. Homeowners invite their friends and neighbors over to sell unwanted jewelry. Gold is fetching premium prices right now, and Souza’s company is expanding fast. She’s hired 20 people, many of them former mortgage brokers.

“We’re basically riding a gold bubble that came after a housing bubble,” Souza says, “and when this is done, I have no idea what’s going to be next. But I’m riding the wave.”

Souza used to ride the sub-prime wave as a mortgage wholesale representative. She was good at it, and she made a good living — $800,000 in her best year during the housing boom.

“I miss it,” she says.

Laurie Souza, right, a former mortgage wholesale representative, runs a business that organizes cash-for-gold parties. (Curt Nickisch/WBUR)

When the housing market crashed, so did the job market for mortgage brokers. Over the last two years, Massachusetts has lost two-thirds of its registered mortgage brokers, the middlemen between lenders and home-buyers.

Souza says it’s not fair to blame brokers for the housing mess. She says buyers were either fraudulent or lazy.

“I wish some of these borrowers would be held responsible,” Souza says. “I don’t feel bad for those people. I’m sorry, I don’t. You bought the biggest thing in your life and you had all this time to understand it, and you didn’t! You know, how is that our fault?”

She says mortgage professionals did their due diligence, save for a few bad apples.

Nowadays, former mortgage broker Craig Good sells apples. He runs a fruit stand at the Old South Meeting House in downtown Boston, for Lambert’s Marketplace.

Back when he sold mortgages, Good used to make up to $400,000 per year. He opened offices all over Massachusetts and was expanding into Florida.

“I was greedy,” Good remembers. “Boy, I was greedy. And when I came to that conclusion — you know what? — it wasn’t awesome.”

Good says he served as a matchmaker, a conduit between aggressive lenders and risky borrowers, because that’s where the money was. He says he did help deserving people get into homes. But Good feels remorse for his part in what he calls the obesity of the time.

“There was a lot of excess,” he says. “No irony, I’m 215 pounds now, I was 235, 240 pounds back in those days, because, you know, we were eating at good places and we were living the good life.”

Nowadays, he’s not living as large. He earns an eighth of what he used to. But unlike the mortgage business, he feels he daily makes people happy. Before, if someone complained, it’s not like he could redo a mortgage. But now, he can hand out another mango. Good says he’d rather teach his son the fruit business than the mortgage business.

“For a long period of time I was glad-handing, rubbing elbows, saying hi, smiling — and there wasn’t a lot of people that trusted the authenticity,” Good says. “Now I wear four-year-old sneakers instead of four-day-old sneakers — and you know what? I know more about me now than I was ever willing to commit to looking at in those days.”

Both of these onetime mortgage professionals, Craig Good and Laurie Souza, say they would go back into the business if the mortgage industry recovers. Good says he would do it differently. Souza says she’s afraid that with the new rules and regulations that have made the business more cumbersome and costly, it won’t ever be like it used to.

Please follow our community rules when engaging in comment discussion on wbur.org.

Sol

Souza’s comment about wishing “buyers would be held responsible” is a pathetic attempt to pass the buck on her own role in the foreclosure crisis. A buyer is held responsible for buying something they cannot afford. It’s called foreclosure.

As for Souza’s future, is it responsible to live your life by riding financial waves?
Fred Gutierrez

I realize some of the dialogue may be out of context, but Laurie Souza cavilear ,
Fred Gutierrez

Shame on you Laurie Souza, you need to be honest with yourself. The brokers are not soley at fault, but hey should be reflect on the situation and understand they had the ability/responsibility to educate thier clients about the situations they were getting into.
http://jeffohora.com Jeff O’

I listened this morning with great interest. And while I appreciate the comments and criticisms here about the culpability of the mortgage brokers, I have also found it most disturbing the lack of personal responsibility on the part of (some) borrowers in the debacle. And let’s not forget the role of such Beltway luminaries as Barney Frank and Chris Dodd!
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

This is why I hate the media. Everything taken out of context and everyone blaming everyone EXCEPT for the borrowers. I don’t blame every borrower. I said “some”. Some borrowers knowingly and willingly committed fraud. Some, actually many, were issued a “prequalification” letter staing they qualified for a 30 yr fixed mtg at say $200k, next thing you know after being out with a realtor they show up with a Purchase & Sales agreement for $300k. How’s that not predatory? Realtors upsold borrowers. So now instead of the 30 yr fixed rate mortgage they chose some kind of low start rate adjustable mortgage just so they could get thier foot in the door because otherwise they wouldn’t have qualified for that higher loan amount.

My specific statements reguarding borrowers who did not understand thier mortgage documents and being held responsible was also taken out of context. In my interview I referred to a Boston Globe article a few years back that said something like “Poor Dorchester woman “gave up” subsidized housing for a $500 Fremont Mortgage. The article went on to state how the borrower didn’t understand her mortgageterms. Well folks, this borrower MUST have committed fraud either to get subsidized housing OR the $500k mortgage because you can’t qualify for both. This borrower should be in jail and instead everyone feels sympathy for her.

I spent 15 years in the mortgage business, as a processor, underwriter and then a wholesale rep. In the busy booms the banks were backed up and it often took 60 to 90 days to close a loan. Borrowers were given disclosures at the time of application by the broker, again by the lender then again at the closing. My point was these borrowers had 3 months to understand the docs and if they didn’t they should have had an attorney represent them. You don’t need to be a financial expert to know that if you are in subsidized housing chances are you can’t afford a 1/2 million dollar home!

I know there is blame to go around everywhere but my point was that nobody seems to talk about the responsiblility of these borrowers that should be held accountable and even punished if they knowingly and willingly committed fraud. We’re all over the “bad apples” that were loan officers who committed fraud but I’ve yet to hear of the borrower that committed bank fraud and was actually punished for it.
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

Oh and yes, I’m riding the gold party wave, providing people with jobs and stimulating the economy. I know people that have been seeking employment for over a year and now they can earn a living again. It may not last but at least people can make ends meet while waiting for this recession to be over.
Richard Silas

Ms. Souza sounds completely disingenuous.

As it turned out, up to 50% of subprime borrowers had prime credit profiles but were directed into costlier and more restrictive mortgages(like being required to pay thousands of dollars just to pre-pay their loans). The reason? How about this: Brokers typically received a $5K fee on a subprime $100K mortgage vs. $3K if the loan were considered a prime $100K mortgage. Thus, the incentive was to push people into the lower-rated products–at their own peril.

Question: is her current “gold rush” scheme that she helped create the financial ruin and now is able to profit off the still-frightened survivors? To some it might seem that way.
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

Ah, I love a good debate and everyone is entitled to their own opinion.

Believe it or not I am an honest business woman. I always have been and always will be no matter what industry I’m in and I’ve got the references and testimonials to show for it.

As for the comments about directing borrowers into subprime loans when they qualified for prime loans… I disagree. There were “benefit to borrower” rules and RESPA rules & regs and too many others to mention that the lenders had to adhere to. If the loan did not benefit the borrower we had to decline it. Prepayment penalties were abolished in the state of MA. Prepayment penalties existed in subprime yes, but in the prime world the broker had to pay back the bank if a borrower refinanced or flipped a property within a short period of time. I actually disagree with both scenarios but I don’t make the rules. I just follow them.

I also disagree that a broker typically received a $5k fee on a $100k loan. Again there were rules and regs (predatory lending rules, benefit to borrower rules,etc) that prohibited excessive fees. Many borrowers chose to pay points in order to buy down their interest rate but that is not the same as a “fee”.

Again, I was in the mortgage business for over 15 years. Industry leaders begged for licensing of loan officers and finally it happened but it was too late.

As for the “gold rush”, I’m just as frustrated. I feel like I’m steotyped and don’t deserve it. I explain exactly how our pricing works, have shown people our formulas and how we calculate our pricing and have even showed people the statements we receive back from refineries. I have nothing to hide. I am frustrated because I am playing by the rules and so many are not. My company only uses scales that are legal for trade and certified by the Div of Standards. My company and/or my reps obtain all the applicable licensing and permits. Often times the precious metal business is regulated by town not by state so it is very time consuming and the laws were written with pawn brokers in mind not gold party companies so often times even the authorities don’t know how we fit into their guidelines. Bottom line is we follow the rules. I wish the majority of my competitors played by the same rules. The truth is they don’t.

Like I said, in every industry there are good apples and bad apples. So it is unfair to blame every mortgage professional and insinuate that every mortgage professional took advantage of homeowners. That is just not true. It is also unfair to imply that my gold parties are a “scheme” they simply are not. Not only are they fun and rewarding for our hosts and guests but we also have raised over $15,000.00 for local charities and youth sports teams by hosting gold party fundraisers where the charity or organization receives a percentage of the proceeds from the gold sold.
Christine Lauria

I find it utterly amazing that all of the people who are critizing Laurie Souza take absolutely NO responsibility for the roles of every other party taking place in the mortgage process. Ms. Souza did no hand out the money, she did not drag borrowers into mortgage broker’s office’s and hold guns to their heads. She did her job. She followed a very strict set of guidelines on both state and federal levels. She did not say anything out of line by ‘wishing borrower’s were held accountable for their own actions. Come on people wake up and and own up to the fact that people who wanted to keep up with the Jones’did just that. Boo Hoo you signed legal documnents making a promise to pay the bank back. YOU made a promise you could not keep knowingly, willing,and wantingly. We all need someone to blame, stop pointing the finger at the employess who did the jobs they did and I might add did well. Walk a mile in the shoes of the hundreds of thousands of people in the financial industry and related industry’s that have been out of work for almost 3 years. I give Laurie credit for her ability to form a new business, hire 20 jobless people and afford people the oppurtunity to make a living so they can atleast try to make the MORTGAGE PAYMENT they promised to pay. For all of you that have not made your payments just because you can get away with it now let’s get you and your finances out on public radio and hear your explanation. The OBAMA program is a joke, FHA is a train wreck who is screaming about that? Good Luck Laurie you earned it!
dwr

“You don’t need to be a financial expert to know that if you are in subsidized housing chances are you can’t afford a 1/2 million dollar home!”

And any “professional” (and believe me I use that term as loosely as possible) who facilitated such a mortgage should be in jail, and sued to recover those ill-gotten gains. 800K per year to faciliate stated income loans that you knew were fraudulent, you should be in jail.
Bill

why does she need to hold gold parties anyway? She should have hundreds of K stashed, right? right? Next she’ll be on to child-trafficking — the next big wave!!! Hope the next bubble is in bubble-promoter scalps. Calling all gold bugs. If this does not make you pause and think – nothing will.
Bill

These gold parties are a rip-off, but plenty of foolish women – do men ever go to these “let-me-guilty-you-into-selling-you-something” parties? – are willing to hand over their gold jewelry for a pittance. These former mortgage brokers have exchanged one con game for another, once again exploiting the trust and gullibility of their “clients.”
Bill

I guarantee what when Souza was leading her “valued clients” down the primrose path and feeding them her “research,” she never let on her private opinion that they were lazy or fraudsters. And I bet she helped enable the fraud every step of the way. Commissions, baby!
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

WOW, Actually, this reporter should be in jail for taking SO MUCH out of context. He told me he was tyring to show the rollercoaster ride of our income and what the range was. I did NOT make $800k “per year”. I wish I did. I earned that 1 year and trust me it didn’t feel like it after taxes. My worst year was $8k ~ below the poverty level. The norm was in the lower six figure range because I was a top representative, did an outstanding job, and had the cleanest loans. I came from an underwriting background. I did not charge borrowers.I was not paid based on any program or points or anything that affected the borrower. I did not deal with borrowers. I did not lead ANYONE down ANY path. I was a WHOLESALE MORTGAGE REPRESENTATIVE NOT A MORTGAGE BROKER. I worked for an FDIC Bank for over 6 years. My clients were not consumers. My clients were mortgage brokers and banks. I got paid less for any stated income loan. My company discouraged these types of loans.

I did not facilitate fraudulent loans. I had nothing to do with ANY fraudulent loans. MY coments were about the people that committed fraud, whether a mortgage professional OR an appraiser OR a Realtor OR a borrower.

“I should have money stashed in the bank and shouldn’t have to do gold parties?” Well I did. I lived off my savings for 3 years while helping friends and family through thier tough times and job losses over the past couple of years. I lived off savings while trying to find a steady job or while being “underemployed”. I dare anyone to walk a mile in my shoes. I’ve been through hard times. When I bought my home I put 20% down and got a 30 yr fixed interest rate. I did not buy more than I could afford. I didn’t buy a house until I had ample savings for a rainy day. That is the way it is supposed to be done. FRANK & DODD forced banks to offer no money down loans at low interest rates. Products we never used to offer but we were forced to do so. As soon as that happened the loans came pouring in. The borrowers could have chosen the fixed interest rates but since they bought too much house than they could afford they CHOSE low adjustable rates.
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

I guarantee what when Souza was leading her “valued clients” down the primrose path and feeding them her “research,” she never let on her private opinion that they were lazy or fraudsters. And I bet she helped enable the fraud every step of the way. Commissions, baby!

Well Bill, I’ll have you talk to some loan officers that wouldn’t do business with me because as soon as I figured out they were trying to commit fraud I chose not to do business with the loan officers. I prequalified a deal 1 time and the LO didn’t like it because I wouldn’t let him structure it the way he wanted to (because he was trying to commit fraud). He then went behind my back and tried to submit the loan to another rep at my company who wouldn’t let him structure the deal that way either. He complained to his manager and gave me a bad rap in the account. The manager ended up firing him once she realized what was going on.

After a file was submitted our underwriting and QC did their due diligence. If there was fraud suspected we had to submit a SARS (Suspicious Activity Report)to the division of banks.

Stop accusing me when you don’t know me. This was the reason I agreed to the article but none of that was portrayed. I am SICK AND TIRED of everyone blaming ANYONE who ever worked in the mortgage business. It’s really unfair and you really sound like an idiot. I have an outstanding reputation for honesty and integrity and I’m proud of it. There are MANY MANY good mortgage professionals and then there were some that were not. Just like in any business. Unfortunately the bad eggs ruin everything for everyone else. I am tired of the stereotype.
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

“These gold parties are a rip-off, but plenty of foolish women – do men ever go to these “let-me-guilty-you-into-selling-you-something” parties? – are willing to hand over their gold jewelry for a pittance. These former mortgage brokers have exchanged one con game for another, once again exploiting the trust and gullibility of their “clients.”

Posted by Bill on February 12, 2010, at 2:57 PM

Bill, once again you are showing your ignorance. You know nothing of the value of gold. Can you calculate it? Do you know what you are talking about? Cleary you don’t. You know nothing of gold and you know nothing of mortgages but you probably are thankful to the bank who lended you money for your own home.

I DO NOT rip people off. Again, I show everyone how the value of thier gold is calculated and share how my company profits. I attened a party last night where we raised $700.00 for the Susan G. Koman 3 day walk for the cure. Keep trying to portray me as a criminal. Its just not true. And by the way, YES, many men have had parties and fundraisers for thier sports teams. I have testimonials from Hockey coaches, Wrestling coaches, Booster Clubs and hosts of pop warner teams.

Not only have the men gotten involved but they’ve asked us to do fundraisers for them over and over again!

The real scam artists are the reporters that don’t report a fair and balanced story. There should be laws about that.
http://WWW.GOLDTOGREENPARTIES.COM LAURIE SOUZA

Posted by Christine Lauria on February 11, 2010, at 11:16 AM

Thank you Christine!
dwr

“FRANK & DODD forced banks to offer no money down loans at low interest rates. Products we never used to offer but we were forced to do so. As soon as that happened the loans came pouring in. The borrowers could have chosen the fixed interest rates but since they bought too much house than they could afford they CHOSE low adjustable rates.”

If my employer tells me to start breaking the law, I either 1) become a criminal, or 2) become a whistleblower or quit. It is clear which path you chose. If you made 800K in even a single year, then you were doing (or authorizing others to do) stated income loans, which everyone knows were close to 100% fraudulent, but had oh so sweet (and irresistible) gigantic commissions tied to them. If you weren’t doing those loans, then you would’ve had very little business because almost no one could qualify for coventional mortgages around the peak, and those who could wouldn’t have gigantic commissions tied to them. Don’t worry, our incompetent government can’t throw people like Mr. Orange Mozillo in jail, they won’t ever get down to your level.

If your gold parties are such a good deal for your customers, why not state what you pay for the gold?
Coin Dealer

As a professional in the coin and bullion business I can tell you that what people like this are really doing is also known as a scam.
Bring your coins and metals to a reputable coin dealer and avoid these amateurs who only pay you a small percentage of what the real value of your coins and metals products really are.
JD

Listen to Laurie Souza on this thread! She is making the case for everyone who is criticizing her! All she is doing is blaming others (borrowers, the media, the government … though funny no mention of Bush’s Zero Down-Payment Initiative or the deregulation from CFTC). She is nothing but a whiner who can’t take any personal responsibility. She was engaged in a joke of a business that was built on a bubble, that is a fact and if she can’t see that even at this point she is hopeless. Now she is engaged in another ridiculous joke of a business. Laurie Souza is a perfect example of the type of lazy person who drags this country down, just keep blaming others. Pathetic.