60 Minutes covers the World Savings option ARM fiasco

Last night, 60 Minutes covered the story of a mortgage salesman named Paul Bishop with World Savings, who discusses some of the standard practices of the day at a company which heavily promoted toxic Option ARM loans and other no-doc alternatives. The damage so far? $37 billion and counting.

Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings - the nation's second largest savings and loan company - that many of the mortgages they were granting were misleading and predatory.

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So why didn't he or anyone else step up in a public way? Because, at least in my own experience, when people have mortgages and car loans to pay and kids to feed, looking the other way becomes the most practical (and cowardly) way to keep a job. As someone who regularly speaks his mind, I can personally attest to the perils of losing clients who simply went elsewhere to find someone willing to play ball (and you can thank numerous bankruptcies of development deals for that short-sightedness).

So is this country ready to start listening to people willing to ignore petty politics in search of the truth? That certainly remains to be seen. Perhaps seeing some former executives of those companies engaging in fraud (i.e., mortgage companies, Wall Street companies, ratings agencies and certain consultants) doing the perp walk for a nice long prison sentence would get the ball rolling in that direction?