Chain of Blame: How Wall Street Caused The Mortgage and Credit Crisis »

Paul Muolo is Executive Editor of National Mortgage News—which won a Polk Award in 1990 for its reporting on the S&L crisis—and is also coauthor of Inside Job: The Looting of America's Savings and Loans, which spent five weeks on the New York Times bestseller list. His freelance work has appeared in the New York Times, the Washington Post, and Barron's. Muolo has been a guest financial expert on numerous media outlets, including CNN, CNBC, ABC, and Fox Business Network.

Mathew Padilla is a business reporter for the Orange County Register. His work, and that of two other colleagues, on the implosion of the Southern California subprime industry was selected by the paper's editors as a submission for the Pulitzer Prize and recognized by the Society of American Business Editors and Writers.

In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. On average, fifty lenders a month were going bust—and the people responsible for the crisis included not just unregulated loan brokers and con artists, but also investment bankers and home loan institutions traditionally perceived as completely trustworthy.

Chain of Blame chronicles this incredible disaster, with a specific focus on the players who participated in such a fundamentally flawed fiasco. Authors Paul Muolo and Mathew Padilla, well-regarded journalists for National Mortgage News and the Orange County Register respectively, reveal the truth behind how this crisis occurred, what individuals and institutions-from lenders and brokers to some of the biggest investment banks in the world-were doing during this critical time, and who is ultimately responsible for what happened.

Acknowledgments

Introduction

Cast of Characters

Chapter 1 Angelo Speaks, the Worldwide Contagion Begins 1

Chapter 2 The Repo Man Meets the Bald Granny: A Short History of Subprime 23

Chapter 3 The Death of the Bailey Building and Loan, the Rise of Millionaire Loan Brokers and Countrywide 47

Chapter 4 The Beach Boys of B&C: How Roland Arnall Became the Johnny Appleseed of Subprime 73

Chapter 5 Angelo Rising: The Son of a Bronx Butcher Makes Good 103

Chapter 6 The Holy Roller of REITs 127

Chapter 7 The End of the (New) Century 149

Chapter 8 A Conspiracy by Merrill? 179

Chapter 9 A Warning from Lewie: CDOs, SIVs, and Other Things No One Understands 205

Chapter 10 Deep in the Belly of the Bear 227

Chapter 11 Armageddon Times: The Tan Man Departs, Bye-Bye Bear 249

Chapter 12 What the Hell Happened? Ten Bad Years for Housing in America 277

Afterword: We Buried (Some of) Our Garbage Overseas 305

Source and Interview Notes 309

Glossary 319

About the Authors 327

Index 329