I pitched a story about how these settlements weren’t what they seemed, and got turned down a lot of places. Eventually I called the editor of Southern Exposure, Gary Ashwill, and he said, “That’s a great story; we’ll put it on the cover.”

I interviewed 150 people, mostly borrowers, attorneys, experts, industry people—but the stuff that really moved the story were the former employees.

As a result of the Citigroup stuff, I got a call from a filmmaker [James Scurlock] who was working on what eventually became Maxed Out, about credit cards and student loans and all that kind of stuff. And he asked if I could go visit, and in some cases revisit, some of the people I had interviewed and he would follow me with a camera. So I did sessions in rural Mississippi, Brooklyn and Queens, and Pittsburgh. Again and again you would hear people talk about these bad loans they got. But also about stress. I remember a guy in Brooklyn, not too far from where I live now, who paused and said something along the lines of: “You know I’m not proud of this, but I have to say I really considered killing myself.” Again and again people talked about how bad they felt about having gotten into these situations. They didn’t understand, in many cases, that they’d been taken in by very skillful salesmen who manipulated them into taking out loans that were bad for them.

If one person tells you that story, you think maybe it’s true, but you don’t know. But you’ve got a woman in San Francisco saying, “I was lied to and here’s how they lied to me,” and a loan officer for the same company in suburban Kansas saying, “This is what we did to people.” And then you have another loan officer in Florida and another borrower in another state. You start to see the pattern.

I was not talking to analysts. I was not talking to high-level corporate executives. I was not talking to experts. I was talking to the lowest-level people in the industry—loan officers, branch managers. I was talking to borrowers. And I was doing it across the country and doing it in large numbers. And when you actually did the shoe-leather reporting, you came up with a very different picture than the PR spin you were getting at the high level.

One day, Rich Lord [who recently published the muckraking book, American Nightmare: Predatory Lending and the Foreclosure of the American Dream] and I were sitting in his study. Rich had written a lot about Household International [parent of Household Finance], and I had written a lot about Citigroup. Household had been number one in subprime, and now CitiFinancial/Citigroup was number one. This was in the fall of 2004. We wondered, who’s next? Rich suggested Ameriquest.

I started looking up Ameriquest cases, and found lots of borrower suits and ex-employee suits. There was one in particular, which basically said that the guy had been fired because he had complained that Ameriquest’s business ethics were terrible. I found the guy in the Kansas City phone book, and he told me a really compelling story. One of the things that really stuck out is, he said to me, “Have you ever seen the movie Boiler Room [the 2000 film about an unethical pump-and-dump brokerage firm]?”

By the time I had roughly 10 former employees, most of them willing to be on the record, I thought: This is a really important story. Ameriquest at that point was on its way to being the largest subprime lender. So I started trying to pitch it.

The Los Angeles Times liked the story and teamed me with Scott Reckard, and we worked through much of the fall of 2004 and early 2005. We had 30 or so former employees, almost all of them basically saying that they had seen illegal practices, some of whom acknowledged that they’d done it themselves: bait-and-switch salesmanship, inflating people’s incomes on loan applications, inflating appraisals. Or they were cutting and pasting W2s or faking a tax return. It was called the “art department”—blatant forgery, doctoring the documents. In a sense I feel like I helped them become whistleblowers because they had no idea what to do. One of the best details was that many people said they showed Boiler Room—as a training tape! And the other important thing about the story was that Ameriquest was being held up by politicians, and even by the media, as the gold standard—the company cleaning up the industry, reversing age-old bad practices in this market. To me, theirs was partly a story of the triumph of public relations.

Leaving Roanoke

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.