Every appearance of blatant lender fraud was there for the observing. Soon, when banks started refusing to buy certain loans from WMC because of problems or suspected fraud, WMC began shipping the same loans to other banks without disclosing the reasons for the previous rejections, or even that they had been rejected. Some banks were forcing WMC to repurchase the loans, which it then held on its own balance sheet. WMC reviewed a sampling of almost 1,300 loans it bought back in 2005 and found that the files on 78 percent of them “contained at least one piece of false information.”
