In the fall of 2002, the Federal Trade Commission announced a big settlement with Citigroup, which had bought Associates, and at first I saw it as a positive development, like they had nailed the big, bad actor. I’m doing a 1,000-word freelance thing, but as I started to report I heard from people who were saying that this settlement is basically giving Citigroup absolution, and allowing them to move forward with what was, by Citi standards, a pretty modest settlement. And the other thing that struck me was the media were treating this as though Citigroup was cleaning up this legacy problem, when Citi itself had its own problems. There had been a big New York magazine story about [Citigroup Chief Sanford I.] “Sandy” Weill. It was like “Sandy’s Comeback.” I saw this and said, “Whoa, this is an example of the mainstreaming of subprime.”

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.

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.