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Resource ID: #17406
Subject: Mortgages
Source: ABC News/The New York Times
Date: March 15



"A national lender accused of deceptive sales practices and charging outrageous fee while funded by one of the most prestigious banks on Wall Street was the focus of a joint ABC News-New York Times investigation of the First Alliance Mortgage Company. . . The team discovered that authorities in a number of states were investigating First Alliance, accusing it of using a slick but misleading sales spiel to lure thousands of elderly homeowners into loans that sucked away the equity they had built up in their homes. . . But what pushed the investigation beyond other earlier examinations of local abusive lending scandals was tracking the money behind First Alliance- all the way to Wall Street. The source of their funds was Lehman Brothers, the prestigious investment bank . . . that had raised hundreds of millions of dollars. High-interest mortgages were nevertheless bundled together by Lehman Brothers and sold to big Wall Street investors, who then received interest payments from the homeowners."

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