Who’s Behind the Financial Meltdown?

Published — May 6, 2009 Updated — May 19, 2014 at 12:19 pm ET

No. 17 of The Subprime 25: Encore Credit Corp./ ECC Capital Corp./Bear Stearns Cos. Inc.


Total high-interest loans 2005-2007:

At least $22.3 billion

Federal bailout money received:

None. However, JPMorgan Chase & Co. was able to buy Bear Stearns with the help of a $29 billion guarantee by the Federal Reserve Bank of New York against losses on shaky mortgage assets held by Bear.

Company overview

  • Status: CLOSED
  • History: Formed in 2001, Encore Credit Corp. operated from 2002 to 2006 as a “brand new national non-prime lender.” Bear Stearns bought the company in February 2007. Bear would become the first major U.S. investment bank to collapse in 2008 thanks largely to its investment in mortgage-backed securities. Bear folded Encore’s Irvine office into Bear Stearns Residential Mortgage (Bear Res) in October 2007 and stopped making loans out of the office in December.
  • Parent/subsidiary companies: Encore Credit Corp. was a subsidiary of ECC Capital. In February 2007, ECC closed the sale of its mortgage banking business to Bear Stearns, which also owned subprime lender EMC Mortgage.
  • CEO: Chairman/CEO (ECC Capital): Steven G. Holder
    • Most recent salary: 2005 – $437,500; bonus, $506,250
  • Location: Irvine, California
  • Year founded: 2001
  • Backers: Prior to being acquired, Encore Credit disclosed credit agreements with Countrywide Warehouse Lending, UBS Real Estate Securities, IXIS Real Estate Capital, Wachovia Bank, and Credit Suisse First Boston.

Lobbying overview

  • Lobbying: 2005-2006: ECC did not report any lobbying, but lobbying firms working for the company reported $35,000 in expenditures and Bear Stearns lobbies on numerous issues. **
  • Total Contributions: At least $7,151,923
  • Top Recipients:
    1. Democratic National Committee $529,771
    2. Democratic Senatorial Campaign Committee $355,000
    3. National Republican Senatorial Committee $340,605
    4. Senator Chris Dodd, D-Connecticut $329,800
    5. Republican National Committee $295,873


  • Settlements:
    • In September 2008, EMC Mortgage and Bear Stearns agreed to pay a $28 million fine to settle Federal Trade Commission charges that the companies misrepresented the amounts borrowers owed, charged unauthorized fees, and engaged in “unlawful and abusive collection practices.”

** 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.

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