Layoffs Rampant in the Mortgage Industry American Home Mortage filed for bankruptcy last month after falling victim to the weak housing market. Aimee Waltz, a loan officer who recently lost her job with American Home Mortgage, says it's not just irresponsible lenders who've brought on the subprime mortgage crisis.
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Layoffs Rampant in the Mortgage Industry

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Layoffs Rampant in the Mortgage Industry

Layoffs Rampant in the Mortgage Industry

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The crisis in the housing industry will bring Treasury Secretary Henry Paulson to the House today to testify before a hearing. He'll ask the Bush administration to boost the mortgage market by expanding the powers of the nation's two biggest mortgage buyers. The Feds' rate cut this week was good for Wall Street but it didn't stave off problems for mortgage borrowers, lenders and investors.

To join in our conversations that we're having this week about that we're having this week about the housing industry, we asked Aimee Waltz into our studios. Until last month, she was a loan officer at one of the country's biggest and fastest-growing home lenders.

Good morning.

Ms. AIMEE WATLZ (Former Loan Officer, American Home Mortgage): Good morning. How are you?

MONTAGNE: Fine, thank you. So I understand that one day you came into work at American Home Mortgage and realized you didn't have any money to lend. What happened?

Ms. WALTZ: On Monday, and I believe that was July 31st, American Home Mortgage announced that they were going to delay a dividend to stockholders and that sent their stock price spiraling. Wall Street, as a matter of fact, had to shut down trading that day on the stock. We were still unable to fund loans on Wednesday. And by noon on Thursday, I checked with the closing department, I was told that we were essentially told to pack up our desks - we were done.

MONTAGNE: And you were out of a job?

Ms. WALTZ: By Thursday.

MONTAGNE: And a fair number of customers left in a lurch?

Ms. WALTZ: Seriously, yes.

MONTAGNE: You know, there has been, since this meltdown of the mortgage industry, there's been a lot of criticism about irresponsible lenders, handing out mortgages to borrowers who couldn't come through on their payments. Do you think that, that was a problem?

Ms. WALTZ: No. And I - my personal opinion is that just because the product exists people don't have to take advantage of it. That's in the same category of, you know, why sell cigarettes, you know, it's just a bad habit. So, the product exists, it doesn't mean that that person needs to have that product or should be in that program. Then it becomes a question of did the loan officer, you know, force it, or somehow, was the loan officer irresponsible. And I don't think the majority of loan officers were irresponsible. I think some of them were ignorant, but I do think a lot of the blame falls on the people themselves. I mean, they know darn well whether they can make that kind of payment or not. I mean, you're making five - six thousand dollars a month, and you're looking at a house payment of $4,000 a month; you can't carry that. That's just irresponsible.

MONTAGNE: Well, on the side of the loan officer, it might not have had to have been intentionally deceptive, but maybe over eager to get a product into somebody's hands.

Ms. WALTZ: Well, that's true. That's true. And, you know, in the last couple of years, real estate was a can't-miss investment. And so a lot of folks felt that they needed to get into the market. And if this was the only way that they could, quote, unquote "get in," then they felt that they would probably flip that house or sell that house in fairly short order, and some of those folks got caught.

MONTAGNE: Well, a lot did.

Ms. WALTZ: Yeah. Obviously.

MONTAGNE: And then you managed to get, as I understand it, a new job - and pretty fast - in a related field. You're working as a loan officer at a bank.

Ms. WALTZ: Correct.

MONTAGNE: If you had to guess, compared to, say, a couple of years ago when everything was humming, and now you look at your colleagues looking for work -what would you have guessed that how many of them would find work in the same line of work?

Ms. WALTZ: Well, I think some of the loan officers need to be out of the industry. There was a lot of people - when the markets swelled in the previous years, you could have been almost anybody and generated a loan. And so, those people aren't responsible, reliable, reputable loan officers and they need to be gone. And they need to permanently be gone. You know, those folks that I am familiar with - all those production people will have jobs. That won't be an issue. Supportive staff - there'll be probably at least 20, maybe 25 percent of those folks who will probably have to get out of the industry. There just won't be enough jobs to support them.

MONTAGNE: Thank you very much for talking with us.

Ms. WALTZ: Thanks for having me.

MONTAGNE: Aimee Waltz is a mortgage loan officer, who worked for American Home Mortgage until last month when the company went bankrupt.

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