Kevin Stitt, Gateway Mortgage, and the 2008 Financial Crisis
Introduction:
Kevin Stitt, now governor of Oklahoma, founded Gateway Mortgage Group in 2000 and led the company through the housing boom and subsequent 2008 financial crisis. During that period, Gateway Mortgage Group became known for high-risk lending and came under scrutiny for its lending practices. This report examines Gateway’s role in the mortgage meltdown – including default rates, regulatory violations, lawsuits, and whether Stitt benefited – and considers if similar patterns have emerged during Stitt’s tenure as governor.
High-Risk Lending and Default Rates During the Boom
Gateway Mortgage Group was an active subprime mortgage lender in the mid-2000s, originating loans to borrowers with below-prime credit. In the lead-up to the 2008 housing crash, Gateway’s loans performed poorly compared to industry averages. In 2009, the Center for Public Integrity identified Gateway as a high-default lender: Gateway’s FHA loan default rate was about 11.9%, nearly double the average in its region. This placed Gateway tenth on a nationwide list of “15 shadiest mortgage lenders” backed by federal programs. In fact, a **Business Insider investigation noted Gateway had “98% more defaults” than its peers. Gateway’s then-new CEO acknowledged the company’s above-average default rate during that period, calling 2008 a challenging time for the industry.
Those are great facts about Stitt's business and the housing finance crisis but the article is not about that, nor does it support Stitt in any way. In fact, it lays out evidence to suggest Stitt is playing some unhelpful political games that undermine parents. You might want to read it.
Governor Kevin Stitt
Kevin Stitt, Gateway Mortgage, and the 2008 Financial Crisis
Introduction:
Kevin Stitt, now governor of Oklahoma, founded Gateway Mortgage Group in 2000 and led the company through the housing boom and subsequent 2008 financial crisis. During that period, Gateway Mortgage Group became known for high-risk lending and came under scrutiny for its lending practices. This report examines Gateway’s role in the mortgage meltdown – including default rates, regulatory violations, lawsuits, and whether Stitt benefited – and considers if similar patterns have emerged during Stitt’s tenure as governor.
High-Risk Lending and Default Rates During the Boom
Gateway Mortgage Group was an active subprime mortgage lender in the mid-2000s, originating loans to borrowers with below-prime credit. In the lead-up to the 2008 housing crash, Gateway’s loans performed poorly compared to industry averages. In 2009, the Center for Public Integrity identified Gateway as a high-default lender: Gateway’s FHA loan default rate was about 11.9%, nearly double the average in its region. This placed Gateway tenth on a nationwide list of “15 shadiest mortgage lenders” backed by federal programs. In fact, a **Business Insider investigation noted Gateway had “98% more defaults” than its peers. Gateway’s then-new CEO acknowledged the company’s above-average default rate during that period, calling 2008 a challenging time for the industry.
Those are great facts about Stitt's business and the housing finance crisis but the article is not about that, nor does it support Stitt in any way. In fact, it lays out evidence to suggest Stitt is playing some unhelpful political games that undermine parents. You might want to read it.