FDIC Federal Register Citations

From: Lenny Zangardi [mailto:lzangardi@smcnow.com]
Sent: Monday, March 19, 2007 12:15 PM
To: Comments
Subject: DOCKET NO. OP-1278

Gentlemen:

I have been a mortgage banker focused primarily on HUD programs for over 30 years and would like to comment on the subprime industry as it has grown over the past 10 years. I am proud to say that my company has generated less than 2% of our annual business in Subprime loans, and if it were up to me that segment of the market would be eliminated completely and rendered illegal.

The subprime securities market has been feeding on the inexperienced financial investor who did not realize that large, seemingly reputable banks and financial institutions could create securities filled with loans totally lacking in credit quality and integrity. But they did.

When did the American consumer decide they needed a readily available securities market to obtain new credit without divulging income, assets or job histories? When did the credit industry decide that bad credit histories were acceptable if the rate charged to the customer was high enough? And when did the mortgage industry become allowed to hide behind LLC's instead of following HUD's guidelines for personal liability?

The answer is this: when Wall Street decided they could SELL securities comprised of loans with bad credit to inexperienced investors who chased YIELD instead of credit quality.

The rest is history.

Lenny Zangardi, President
Strategic Mortgage Company
40 West 3rd Avenue
Columbus, OH 43201
614-737-2511
www.444LOAN.com