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To: pater tenebrarum who wrote (54913)6/21/2000 10:14:00 PM
From: Haim R. Branisteanu  Read Replies (1) | Respond to of 99985
 
Heinz, each lending officer has a quota to make loans along certain guidelines. If you do not meet your quota - no bonus no perks. So they cut corners to meet their quotas.

Now there are more loan officers than loans available. So what they do, is, they steal borrowers from other banks by offering better terms than the previous bank.

So they end up with junk loans as performing loans or good loans at very thin spreads and then the house of cards fall down.

Haim