Mortgage sluts and America's sales culture

One of the plays I studied in Drama and Film 201 was Glengarry Glen Ross by David Mamet. Winner of the Pulitzer prize in 1984 and adapted in 1992 into a movie starring Al Pacino, Jack Lemmon and Alec Baldwin, it’s a tale of a group of property salesmen frantically trying to persuade unwitting members of the public to buy pieces of worthless land in a development marketed as Glengarry Glen Ross.

Glengarry Glen Ross remains as relevant today as it was when it was written. Indeed, in the wake of the global financial crisis and America’s mortgage meltdown, it’s worth another read or, if you can’t face reading the play, another squiz at the DVD. Look at the panic of the failing salesman played by Jack Lemon, the foul-mouthed aggression of the “closer” Rick Roma, played by Pacino, the brutal indifference of Alec Baldwin as he arrives to shake up the agency. First prize, a Cadillac, second prize a set of steak knives, third prize, you’re fired.

I was reminded of Glengarry Glen Ross after I read this article in Businessweek. The piece reveals rampant fraud, corruption and trading for sexual favours in the mortgage industry. Mortgage wholesalers — many of them women employed for their attractiveness — made fortunes out of bundling home loan applications sourced from mortgage brokers and turning them into loans. As competition heated up and lenders jockeyed for the loan applications on offer, brokers began to insist on favours for passing on business — and many mortgage wholesalers were willing to do anything it took to make their targets.

“I didn’t want to be a mortgage slut,” explains one former mortgage broker, a high school dropout who went from doing manicures to earning $1.2 million in a year in commissions. She dropped out of the industry and now works as a life coach and motivational speaker.

The article describes how underwriters demanded secret payments to approve fraudulent loan applications. A former Wells Fargo wholesaler claimed that he would embellish job titles, turning a gardener into a landscaper with his own business. One former wholesaler describes what she witnessed at brokerages:

“I’d walk into mortgage shops and see brokers openly cutting and pasting income documents and pay stubs, getting out the Wite-Out and changing Social Security numbers. There was no ambiguity.”

Though the Businessweek story focuses on the experiences of women and Glengarry Glen Ross features an all-male cast, same themes are there: the testosterone and the aggression, dog-eat-dog competitiveness at the expense of ethics. Employees who flagged questionable practices such as inflated salaries or fraudulent applications were targeted, ostracised or fired.

In the play, nothing matters except closing the lead and making the sale so at the end of the month you can win a Cadillac. For one salesman, getting the leads means survival, so he breaks into the office to steal the list of names. How far is it from there to the executives at Fannie Mae rigged earnings figures for six years in order to qualify for their bonuses?

That’s a rhetorical question, but it’s worth asking whether the hyper-competitiveness of American sales culture is something that needs to be changed if the world is not to end up in a situation like this again.