All the Devils Are Here [82]
In some ways, Arnall followed his old playbook: he made high-priced loans to people who would eventually have trouble paying them back, and he sold the loans to Wall Street. But he did it on a much bigger scale than Long Beach, boosted by a massive advertising campaign. Ameriquest paid $2.5 million a year for the naming rights to the Texas Rangers stadium, and another roughly $3 million to sponsor the Rolling Stones’ A Bigger Bang tour in 2005. It spent untold sums on commercials, blimps, and sponsorship of everything from NASCAR to the popular PBS program Antiques Roadshow. The company’s slogan was—what else?—“The Proud Sponsor of the American Dream.”
Executives were extremely well paid. Wayne Lee, who had worked for Arnall since 1990, spent one year as Ameriquest’s CEO before quitting in the spring of 2005. He later said in a deposition that in 2004 and 2005 he had received yearly bonuses of around $5 million on top of his roughly $330,000 in salary. His severance agreement was truly astounding. In return for working a maximum of twenty-five hours every three months and agreeing to neither compete with nor disparage ACC, the company agreed to pay him $50 million.
As for loan officers, they got a small base salary, but made most of their money on commissions—typically 15 percent of all the revenue they generated. And the perks were fabulous. Every year Ameriquest hosted an event called the Big Spin in Las Vegas for hundreds of top producers. In 2004, Jim Belushi was the emcee and the rock band Third Eye Blind played. In 2005, the head of national sales, Mary Jo Shelton, was shot out of a cannon to start the festivities, and the Black Eyed Peas played. One loan officer, Joe McGregor, just out of college, won a Hummer that year. When someone asked him if he was excited, he replied, “Well, yeah. I’ve already got one.” The company also gave its top three hundred loan officers an all-expenses-paid trip to Hawaii in 2005.
“The amount of money the company had to throw around was staggering,” says a former corporate employee. “These guys in sales who were twenty-five years old and maybe had a couple years of college were making incredible money and driving Porsches. It felt like something was wrong.”
When they weren’t partying, the young loan officers at Ameriquest were under enormous pressure to move loans. “It was a chop shop, and the whip was always being cracked for more,” says Mark Bomchill, describing the Ameriquest office in Minnesota where he worked from 2002 to 2003. Two other former loan officers, interviewed separately, used the same description: “Think Glengarry Glen Ross.” Loan officers were often required to make a certain number of outbound calls each day—a hundred fifty, says Bob—and there were “power hours” for cold-calling. Managers were “brutal to those who weren’t closing loans,” recalls another former employee. Firms took anyone—“car wash guys, let alone car salesmen,” laughs Bob. Executives said they hired young, inexperienced people to keep costs down, though former loan officers say the real reason was that inexperienced loan officers were less likely to realize that “they were screwing people over,” as one of them put it. The branches were run a little like frat houses. Once, says Bob, a handful of loan officers were blindfolded while a manager yelled out lines from the movie Boiler Room.
Fraud was an everyday occurrence. “You’d look over and there would be a guy altering W-2s,” says Bomchill. One loan officer, Lisa