Early Backer of CRL Suggested As Mortgage Culprit
NEW YORK -- Herbert Sandler, an early backer of the Center For Responsible Lending, has been identified as a chief promoter of a mortgage products that critics charged helped bring about the current financial crisis.
According to an article in the December 24 New York Times, Sandler and his wife Marion got involved with the Center in 2002 when the couple was running a mortgage lender called the World Savings Bank. In that capacity, the article reported that Sandler "pioneered" the use of the option adjustable rate mortgage.
Option ARMs allowed borrowers to sometimes make mortgage payments that were so small they did not cover the interest, critics charged, adding that this product among others was responsible for many of the loans that later went bad.
No one from the Center has yet become available to comment on how much Sandler gave or any other involvement he had with the Center. CRL documents identify the Sandler Family Supporting Foundation as one of nine or ten Foundation supporters, including the Ford Foundation, the John D. and Catherine T. MacArthur Foundation and the Annie E. Casey Foundation.