A Center for Public Integrity Investigation

Key Findings

The top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or backed by giant banks now collecting billions of dollars in bailout money — including several that have paid huge fines to settle predatory lending charges. The banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves, but enablers that bankrolled the type of lending threatening the financial system.

These are among the findings that emerged from the Center for Public Integrity’s analysis of government data on nearly 7.2 million “high-interest” or subprime loans made from 2005 through 2007, a period that marks the peak and collapse of the subprime boom. The computer-assisted analysis also revealed The Subprime 25 — the top 25 originators of the high-interest loans, accounting for nearly $1 trillion and
about 72 percent of industry-reported subprime loans during that period.

U.S. and European banks poured huge sums into the subprime lending market due to unceasing demand for high-yield, high-risk bonds backed by home mortgages. The banks — including household names like Lehman Brothers, Merrill Lynch, Citigroup, Credit Suisse First Boston, and Goldman Sachs & Co — made huge profits while their executives collected handsome bonuses until the bottom fell out of the real estate market.

According to the analysis:

• At least 21 of the top 25 subprime lenders were financed by banks that received bailout money — through direct ownership, credit agreements, or huge purchases of loans for securitization.

• Nine of the top 10 lenders were based in California, including all of the top five — Countrywide Financial Corp., Ameriquest Mortgage Co., New Century Financial Corp., First Franklin Corp., and Long Beach Mortgage Co.

• Twenty of the top 25 subprime lenders have closed, stopped lending, or been sold to avoid bankruptcy. Most were non-bank lenders.

• Eleven of the lenders on the list, including four recipients of bank bailout funds, have made payments to settle claims of widespread lending abuses.

The Subprime 25

These top 25 lenders were responsible for nearly $1 trillion of subprime loans, according to a Center for Public Integrity analysis of 7.2 million “high interest” loans made from 2005 through 2007. Together, the companies account for about 72 percent of high-priced loans reported to the government at the peak of the subprime market. Securities created from subprime loans have been blamed for the economic collapse from which the world’s economies have yet to recover.




1. 1. Countrywide Financial Corp.
   Amount of Subprime Loans: At least $97.2 billion

2. 2. Ameriquest Mortgage Co./ACC Capital Holdings Corp.
   Amount of Subprime Loans: At least $80.6 billion

3. 3. New Century Financial Corp.
   Amount of Subprime Loans: At least $75.9 billion

4. 4. First Franklin Corp./National City Corp./Merrill Lynch & Co.
   Amount of Subprime Loans: At least $68 billion

5. 5. Long Beach Mortgage Co./Washington Mutual
   Amount of Subprime Loans: At least $65.2 billion

6. 6. Option One Mortgage Corp./H&R Block Inc.
   Amount of Subprime Loans: At least $64.7 billion

7. 7. Fremont Investment & Loan/Fremont General Corp.
   Amount of Subprime Loans: At least $61.7 billion

8. 8. Wells Fargo Financial/Wells Fargo & Co.
   Amount of Subprime Loans: At least $51.8 billion

9. 9. HSBC Finance Corp./HSBC Holdings plc
   Amount of Subprime Loans: At least $50.3 billion ***

10. 10. WMC Mortgage Corp./General Electric Co.
    Amount of Subprime Loans: At least $49.6 billion

11. 11. BNC Mortgage Inc./Lehman Brothers
    Amount of Subprime Loans: At least $47.6 billion ***

12. 12. Chase Home Finance/JPMorgan Chase & Co.
    Amount of Subprime Loans: At least $30 billion

13. 13. Accredited Home Lenders Inc./Lone Star Funds V
    Amount of Subprime Loans: At least $29.0 billion

14. 14. IndyMac Bancorp, Inc.
    Amount of Subprime Loans: At least $26.4 billion

15. 15. CitiFinancial / Citigroup Inc.
    Amount of Subprime Loans: At least $26.3 billion

16. 16. EquiFirst Corp./Regions Financial Corp./Barclays Bank plc
    Amount of Subprime Loans: At least $24.4 billion

17. 17. Encore Credit Corp./ ECC Capital Corp./Bear Stearns Cos. Inc.
    Amount of Subprime Loans: At least $22.3 billion

18. 18. American General Finance Inc./American International Group Inc. (AIG)
    Amount of Subprime Loans: At least $21.8 billion ***

19. 19. Wachovia Corp.
    Amount of Subprime Loans: At least $17.6 billion.

20. 20. GMAC LLC/Cerberus Capital Management
    Amount of Subprime Loans: At least $17.2 billion ***

21. 21. NovaStar Financial Inc.
    Amount of Subprime Loans: At least $16 billion

22. 22. American Home Mortgage Investment Corp.
    Amount of Subprime Loans: At least $15.3 billion

23. 23. GreenPoint Mortgage Funding Inc./Capital One Financial Corp.
    Amount of Subprime Loans: At least $13.1 billion

24. 24. ResMAE Mortgage Corp./Citadel Investment Group
    Amount of Subprime Loans: At least $13 billion

25. 25. Aegis Mortgage Corp./Cerberus Capital Management
    Amount of Subprime Loans: At least $11.5 billion

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