Blowing the Whistle on the Mortgage Crisis

0715_Songs_july-coverIn Texas, we tend to think that the mortgage crisis happened somewhere else. But one of the first warnings came from a manager in the Plano-based appraisal division of Countrywide Financial. Kyle Lagow’s concerns about Countrywide’s mortgage practices eventually cost him his job and his career, and led to a federal lawsuit that resulted in a $1 billion settlement with Bank of America, which bought Countrywide in 2008.

In the latest issue of Texas Monthly, I talked with Kyle about the struggles he and his family endured, and the ultimate reward he received for bringing this fraud against homebuyers and taxpayers to light.

On a weekday afternoon in late April, Kyle Lagow sits in the living room of his home in a tony north Plano neighborhood wearing a blue T-shirt and orange jogging shorts, the casual attire of someone who finds himself unwillingly unemployed. Lagow is tall, with a physique that harks back to his days playing tight end for Southern Methodist University, an avocation and a school he says he gave up on too easily. He later enrolled at the University of Mary Hardin–Baylor before giving up on that too, three hours short of an undergraduate degree in general business studies. Despite his lack of a bachelor’s degree, he was admitted to law school, but didn’t finish that either. So it’s something of a surprise that after Lagow took it upon himself ten years ago to warn people about the impending implosion of the mortgage industry, he didn’t give up, no matter how hard the industry pushed back at him.

Lagow’s strange odyssey into the mortgage crisis began in 2004, when he joined LandSafe, a Plano-based appraisal subsidiary of Countrywide Financial, then the nation’s largest mortgage lender. Lagow, who had been running his own appraisal business for fourteen years, was tasked with hiring and training appraisers to determine whether properties were worth the amount that Countrywide was lending against them.

Read more here.

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About lorensteffy

Loren Steffy is a writer, speaker and consultant. He is the author of Drowning in Oil: BP and the Reckless Pursuit of Profit published by McGraw-Hill in 2010 and The Man Who Thought Like a Ship, published by Texas A&M University Press in April 2012. A journalist for more than 25 years, he was most recently the business columnist for the Houston Chronicle.
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