Sunday, May 20, 2007
High roller of home loans
Over five years, Quick Loan Funding wrote $3.8 billion in mortgages to people with shaky credit.
By JOHN GITTELSOHN and RONALD CAMPBELL
THE ORANGE COUNTY REGISTER
Daniel Sadek played Orange County's subprime lending boom like a card shark dealt the ace and jack of spades.
Just five years ago he was selling cars.
Then, in January 2002, he anted up $250 for a state lender license and started selling home loans through his company, Quick Loan Funding....
ocregister.com
......used the earnings to live the high life, buying a fleet of Ferraris, Lamborghinis and Porsches, dating a soap opera starlet and producing movies. He flew private jets to Las Vegas, where he gambled with high rollers at the Bellagio Resort....
..."How many thieves are wearing a suit?" ...
..."I've sold all my cars to keep the company going,"...
..."Every property I own is mortgaged to the max."...
...Quick Loan has been accused of predatory lending, deceptive underwriting and fraud in at least eight lawsuits. In addition, Department of Corporations records show 33 complaints against Quick Loan, most alleging unfair business practices. Most of the lawsuits were settled out of court. And state regulators have never disciplined Quick Loan...
...charging "high rate" interest for 94.6 percent of its loans. High rate loans are 3 percentage points above prime for first-lien mortgages. Only two other lenders relied more heavily on high-rate loans – Finance America LLC, an Irvine company owned by Lehman Brothers, and Brea-based ResMAE Mortgage Corp., which filed for bankruptcy in February....
...To obtain his lending license, Sadek completed an application, passed a criminal background check and posted a $25,000 surety bond.
There is no required training or degree; no exam.
Barbers need 1,500 hours of training to get a state license....
...who worked as a senior loan funder, alleged in an Orange County Superior Court suit that she was fired in January 2005 in part because she complained about "a pattern of unlawful and deceptive practices by QLF employees and agents," including forging borrowers' signatures on loan documents and violating truth in lending laws by under-disclosing fees.
Quick Loan countered that Tran was fired for chronic tardiness and failing to meet loan quotas. Tran's suit was dismissed last year after a confidential settlement.
In another suit pending in Orange County Superior Court, Tabatha Owens of Temecula alleges she was fired as Quick Loan's director of training after she attempted to get the company to comply with industry disclosure and truth-in-lending laws.
The suit says managers told employees to ignore her, when Owens attempted to stop loan officers from fabricating borrowers' incomes and "bullying, lying to or harassing consumers."
Sadek says people sued because they saw a deep pocket, because they were jealous of his success and because they are prejudiced against him because he's from the Middle East. He says if he had broken any laws, someone in the state would have taken action....
...born in Tripoli, Lebanon, in July 1968, the son of a construction manager who worked overseas. When Lebanon's civil war broke out in the 1970s, Sadek got caught in the crossfire.
Sadek says he stopped attending school after third grade....
...Friends said he got the idea of going into lending after selling so many Mercedes-Benz at Fletcher Jones Motorcars to customers in the mortgage business....
...I had to go to Vegas once to make payroll," he says. "I put a $5,000 chip on a blackjack table and I came home with the money I needed."...
...He also lavished money on his cars and gambling. On one November 2005 trip, bank records show, he signed three markers at the Bellagio for a total $1 million.
"It's my personal money," Sadek says. "There's only one owner of the company. It's me. So, I'm not gambling your money. I'm not gambling the public money."
Perhaps his greatest extravagance was "Redline," a movie Sadek wrote, produced and bankrolled about ultra-rich people betting on illegal road races. (Read "Behind the wheel of 'Redline'")Its ad slogan was "Risk everything. Fear nothing." Sadek says "Redline" cost $17 million to shoot and $16 million to market and distribute....
...For one "Redline" scene, Sadek crashed and destroyed his $575,000 Porsche Carrera GT. During a March publicity event at the Irwindale Speedway, Griffin wrecked Sadek's $1.3 million Ferrari Enzo....
...The $33 million movie grossed $3.8 million on opening weekend and soon vanished from theaters.
"Redline" premiered as layoffs, asset sales and bankruptcy filings soared in the subprime industry – a fate that threatens Quick Loan, too.
Sadek says Quick Loan had to buy back $29 million in loans that defaulted in the first two months. That's a number that's likely to grow.
Today he is $16 million in debt, he says. Sadek says he raised $13 million for Quick Loan by selling his cars and refinancing his Newport Coast mansion, an Irvine penthouse and a Las Vegas condo.... |
