Business Section Contributes To Our Prevailing Sense Of Disillusionment

We don't know if you caught this weekend's Seattle Times article on the downfall of an Eastside mortgage company, which suffered a mini-Enron implosion this spring. We note that the local business media never saw it coming, due to the proximity of their lips with the company's ass.

To the Puget Sound Business Journal, Merit's founder Scott Greenlaw was "an up-and-coming businessman," the Times points out. In 2004 Washington CEO magazine proclaimed Merit one of the best firms in the state to work for, and the next year, the PSBJ named Merit a finalist for its Eastside Business of the Year award. Greenlaw made the sports section of the Seattle Times for a profile of a young go-getter who made good.

We're not mortgage geeks, but trust us, this whole story makes for gripping reading. Okay, don't trust us. How about this: "Some wonder if the company's demise hinged on its practice of hiring jocks and stunning but inexperienced young loan officers and managing them loosely."

It's not that there wasn't plenty of troubling evidence on the record:

Merit enticed [clients] with mass mailings announcing "Interest Rate Reduction Notification" from the "Department of Loan Reprocessing" in big print and Merit only as a tiny footnote. Mailings also bore an official-looking eagle emblem that smacked of a government mailing.

Such tactics constitute deceptive and misleading trade practices, according to the Washington State Department of Financial Institutions. But Merit was never penalized.

Oregon fined Merit for repeatedly violating the Do Not Call Registry. Merit's pay structure was in violation of state and federal labor laws. The article mentions that "Merit's loan officers executed mortgages that were so flawed that the investors who bought the loans from Merit forced them to buy them back." And then there were "the 42 complaints received by state agencies and the Better Business Bureau." When the company went under, its employees not only didn't receive severance, they didn't receive a final check.

The only problem with this wealth of evidence is that it's too late. Only glowing news about Merit made the local business sections prior to its bankruptcy. We can't find any indication that anyone wondered how an ex-Husky cornerback built a $2 billion company is six years with a staff that included a loan officer who'd just transitioned from working at Hooter's. Screw it. We're going back to bed.