Sunday, February 15, 2009

Meet Paul Bishop, whistleblower in World Savings bank predatory lending practices.


A must see on 60 minutes tonight:

WORLD OF TROUBLE - Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings - the nation's second largest savings and loan company - that many of the mortgages they were granting were misleading and predatory. Scott Pelley reports. Graham Messick is the producer.

To recap from
CBS5.com website:
A former employee of Oakland's World Savings is suing the company (now owned by Wachovia) and its former principals, saying he was fired in retaliation for his reporting of improper practices and violations of state and federal laws including the Sarbanes-Oxley Act by World in selling loans in San Francisco and the Bay Area.

In a complaint filed in Alameda County Superior Court, former loan consultant Paul Bishop says he warned World managers prior to the company's sale to Wachovia that he had concerns about what he describes as potentially "predatory lending, fraud and the deceptive nature of stated income loans" at World, and about his belief that World was "committing fraud, violating its fiduciary duties and its obligations under the Sarbanes-Oxley act."

In the complaint, Bishop claims World "preyed upon" desperate borrowers who were "enticed into bad/predatory loans…without being told the complete truth about the loans" and that "borrowers were not told the full story about the terms, assumptions or risks of their loans".

In the filing, he says he told World managers the company's situation could be "compared to Enron" but that his warnings were ignored and he was fired after telling one manager that he was going to report the situation to the CFO of what was at that time the prospective buyer, Wachovia.


Go here for other posts on other whistleblower suits from various banks involving alleged fraudulent mortgage lending practices.

1 comment:

airJackie said...

Look for many more people to come forward and the White House might have to set up a Department with so many whistleblowers coming forward. It's been an 8 year crime wave and there's many areas yet to be heard from.