In the article, Was There a Loan It Didn't Like?, Gretchen Morgenson interviews mortgage underwriters at WaMu.
The underwriters were repeatedly pressured to 'restructure' subprime loans: they were offered paid vacations when they reached certain loan amounts and threatened with "letters of complaint" in personal files for rejecting loans.
Although the article does not delve into why WaMu would ever endorse such heinous acts, I wonder if the government had anything to do with it... The Community Reinvestment Act and similar legislation could be to blame..
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