Introduction

Financial company executives testify on Capitol Hill in Washington, D.C., before a March 2007 Senate Banking Committee hearing on subprime mortgages. From left are, WMC Mortgage Chief Executive Officer Laurent Bossard; Countrywide Financial Executive Managing Director Sandy Samuels; HSBC Finance Corporation Chief Executive Officer Brendan McDonaugh; Janis Bowdler; and First Franklin Financial Corporation President L. Andrew Pollock. (Dennis Cook/AP)

Andy Pollock is living proof that in the “non-prime” mortgage game, you can be down, but never out.

The veteran subprime executive has been named president and CEO of WDB Funding, the company announced last week. WDB is a national lender that provides “fast and flexible” loans for borrowers who don’t meet “today’s stringent conventional requirements and underwriting guidelines,” according to its website.

Until 2008, Pollock was president and CEO of First Franklin, a subprime lender whose risky loans to vulnerable consumers nearly sank Merrill Lynch, which was forced to sell itself to Bank of America. WDB Funding is the third mortgage company Pollock has helped lead since rejoining the industry in 2011.

“Non-prime” loans typically do not qualify for government guarantees because they carry more risk.

WDB Funding’s managing partner said he is “ecstatic” to have nabbed Pollock. “Given Andrew’s proven track record for building, expanding and directing financial services organizations, we see nothing but opportunity for the future,” Joseph D’Urso said in a statement. Pollock has spent a quarter-century “heading large scale lending operations,” the release noted.

First Franklin’s loans were some of the worst of the subprime era. Regulators said they had among the highest foreclosure rates in hard-hit cities. Lawsuits filed by AIG and others quoted former First Franklin underwriters calling its loan practices “basically criminal.”

Pollock was featured in a September report by The Center for Public Integrity about former subprime CEOs who are back in the game, developing loans that push the limits of tighter lending standards that have prevailed since the crisis. The report detailed how Pollock and his contemporaries see the recent global crisis as a cyclical, temporary downturn in a business that is beginning to rebound.

Pollock’s new firm targets investors seeking quick money to buy homes that they can fix up and flip or rent to tenants. Its loans require big down payments and must be repaid in five years, at the most. They carry rates as high as 15 percent.

WDB specializes in “interest only” loans, which were popular before the crash of 2008. Borrowers make regular payments without reducing the principal balance of their mortgage and face massive balloon payments after a few years. That leaves borrowers ar risk of default unless they have ready cash or a lender willing to refinance the loan.

WDB, does not, however, make loans to individuals. It caters to limited liability companies that buy investment properties.