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World Savings Collapse: Sandler's Letters, Part II
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February 18, 2009
The basis on which mortgage originations were made at World Savings has been called into question by a former mortgage originator at the company's San Francisco Loan Origination Center. CBS 60 Minutes covered Paul Bishop's account of how he warned executives of the impending doom the company was about to face.
CBS said they contacted World Savings founder Herbert Sandler who wouldn't talk with them but did send two letters refuting the claims of mortgage fraud and any general wrongdoing on the company's part. Sandler also puts into question the reputation and character of CBS's main source for the story.
Sandler, who refers to the company only as Golden West, explained that the company always held its own books, motivating them to originate only quality loans, and that subprime loans were unheard of at the company. He also states that the company business model was conservative with minimal losses and zero charge-offs from 1998-2005, noting that most problematic loans become delinquent the second or third year after origination.
In Sandler's second letter he warns 60 Minutes producers about airing the segment about Golden West without "carefully vetting Mr. Bishop and the reasons for his termination." He also continues to dispute the allegations made by Bishop and further clarifies the programs and policies to which the company adhered.
Read story at CBS News
Read Herbert Sandler's letters to CBS Producers: First Letter and
Second Letter
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