No. 25 of The Subprime 25: Aegis Mortgage Corp./Cerberus Capital Management

Introduction

Total high-interest loans 2005-2007:

At least $11.5 billion

Federal bailout money received:

None

Company overview

• Status: CLOSED. Filed for bankruptcy, August 2007.
• History: Aegis Mortgage Corp. was founded in 1993 in Houston. Private equity firm Cerberus Capital Management bought the firm in 1998. Cerberus, which along with other investors owns 51 percent of General Motors Acceptance Corp., was unable to keep Aegis in business through the subprime crisis. Aegis filed for Chapter 11 bankruptcy protection in August 2007, one week after ceasing all new home loans.
• Parent/subsidiary companies: Cerberus Capital Management (parent)
• CEO: Founder: Rick Thompson founded the company in 1993 and led it through 2006. Dan Gilbert was appointed CEO in 2007 and held the job only a few months before the company filed for Chapter 11 protection in August 2007.
  • Most recent salary: Not available
• Location: Houston
• Year founded: 1993
• Backers: In its bankruptcy filing, the company listed unsecured claims owed to Morgan Stanley, Countrywide, and Goldman Sachs. The company also sold hundreds of millions of dollars in loans to investment banks such as Morgan Stanley and Merrill Lynch.

Lobbying overview

• Lobbying: Cerberus reported $5,360,000 in lobbying expenditures since 2005.
• Total Contributions: At least $926,375 *
• Top Recipients:
  1. Democratic National Committee $101,000 (tie)
  1. National Republican Congressional Committee $101,000 (tie)
  3. Democratic Senatorial Campaign Committee $83,000
  4. Defend American PAC $69,500
  5. Majority Leader’s Fund (former Representative Dick Armey, R-Texas) $50,000

Investigations

• Settlements:
  • In 2007, Aegis agreed to pay $475,000 to settle charges filed with the Department of Housing and Urban Development that it denied loans on American Indian reservations, row homes, or group homes for the disabled located throughout the United States.

** Lobbying totals calculated by the Center for Public Integrity using data from the Senate Office of Public Records.

* Contribution grand total includes employee and soft money contributions from the lender and its subsidiaries. Top recipient totals include employee and political action committee contributions. Data provided by CQ Money Line, analysis by the Center for Public Integrity.