The twenty-five subprime lenders that originated $1 trillion in high interest loans between 2005 and 2007 got their funding from Wall St. banks that are now the beneficiaries of TARP money.
According to the Center For Public Integrity, “Investment banks Lehman Brothers, Merrill Lynch, JPMorgan & Co., and Citigroup Inc. both owned and financed subprime lenders. Others, like RBS Greenwich Capital Investments Corp. (part of the Royal Bank of Scotland), Swiss bank Credit Suisse First Boston, and Goldman Sachs & Co., were major financial backers of subprime lenders.”
“Between 2000 and 2007, backers of subprime mortgage-backed securities — primarily Wall Street and European investment banks — underwrote $2.1 trillion worth of business, according to data from trade publication Inside Mortgage Finance.”
Douglas A. McIntyre
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