iWatch News: Ex-WaMu worker claims he was shunned for refusing to push toxic loans on borrowers

In the case of the salesman who wouldn’t sell, the two sides have starkly different tales to tell.
Greg Saffer says conscience and common sense prevented him from pushing the product his bosses wanted him to sell – “Option ARM” home loans that, he says, put homeowners at risk.
“I’m not going to steer people into a loan program that might not be good for them just because it’s more profitable for the company,” he says.
JP Morgan Chase Bank counters that Saffer didn’t sell because he didn’t have the chops to close deals.
“Rather than a paragon of virtue, Saffer was simply a guy who could not sell loans in an increasingly tough market,” the bank’s lawyers say in legal papers.
JP Morgan is matched against Saffer because it bought Saffer’s ex-employer, Seattle-based Washington Mutual Bank, in September 2008, after regulators seized WaMu in what was the largest bank failure in U.S. history.
Saffer charged in a lawsuit filed in 2009 in Los Angeles Superior Court that he was forced out of his job for refusing to take part in “fraudulent schemes.” In testimony in the lawsuit and in documents in arbitration proceedings, he claims WaMu retaliated against him because he refused to push “toxic” Option ARMs and mislead borrowers about how the loans worked and how much they would cost.
A judge ordered the case into arbitration last year. It could be months before an arbitrator rules on whether Saffer’s claims are valid.
Saffer’s case is notable because, as a salesman, his job description was different from most of the ex-employees who’ve made whistleblower claims against mortgage lenders. Many were fraud investigators or loan underwriters who claim they were punished for uncovering fraud by sales reps and sales executives.
Saffer’s legal claims paint him as one of what may have been a distinct minority among the mortgage industry’s sales corps during the nation’s home-loan frenzy – a salesman who said no to the dirty tactics that became pervasive during the boom. Former industry insiders say salespeople who refused to go along were often weeded out, to make way for others who had a more pliable sense of right and wrong.

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