Mystery or crime: Why did Goldman stop scrutinizing loans it bought? supervisors cleared half-million-dollar loans to a gardener, a housekeeper and a hairdresser.Goldman Sachs Group got into the residential mortgage business in 1984, and for 17 years, it ran a staid operation that simply bought and sold loans.
All that changed in 2001, when the elite investment bank leaped aggressively into the burgeoning subprime securities market that was becoming a fountain of money for its Wall Street rivals. The Goldman Sachs Mortgage Co. sold $8.7 billion in subprime bonds that year, amounting to a third of its business.
Soon, the Goldman subsidiary was in the jet stream, dealing with some of the most aggressive and controversial subprime lenders ? including Ameriquest (through a subsidiary), New Century, Fremont General, National City and First Franklin.John Talbott, a former Goldman investment banker and the author of a new book, "The 88 Biggest Lies on Wall Street," said "it wasn't a mistake" when illegal immigra
