“We did it here because you had a lot of talent,” said Jon Daurio, an alumnus of Long Beach Savings who co-founded Encore and now runs a company that buys distressed mortgage loans. “You also had the Godfathers of subprime.”
You may not remember Long Beach Savings, but you now know much of the story of what Long Beach Savings has brought forth. Long Beach Savings was one of the first subprime lenders, and in 1997 the company split… And gave birth to Ameriquest, at one time the nation’s largest subprime lender.
Believe it or not, subprime mortgages got their start right here in Orange County. Long before Ameriquest became infamous for its shaky mortgages, outfits like Long Beach Savings were figuring out ways to offer mortgages to people who may have blemishes on their credit reports, but can still be counted upon to pay back the loan. But as soon as these subprime lenders got the attention of Wall Street, things changed. These lenders were no longer just local banks, but national financial players.
So go ahead and read what’s in The Register today. It’ll give you some background on what happened in subprime lending. Who could have ever guessed that one of the biggest economic issues this nation is facing got its start with a few small banks here in OC?