No. 7 of The Subprime 25: Fremont Investment & Loan/Fremont General Corp.

Introduction

Total high-interest loans 2005-2007:

At least $61.7 billion

Federal bailout money received:

None

Company overview

• Status: CLOSED. Fremont General filed for bankruptcy June 18, 2008 and the following month sold the bank branches and deposits of Fremont Investment & Loan to CapitalSource Inc.
• History: Founded in 1937 as Investors Thrift & Loan, the company was acquired by Fremont General Corp. in 1990. Fremont was renamed “Fremont Investment and Loan” in 1993. Under its new ownership, the firm evolved from primarily a consumer loan operation into a subprime lender operating mainly in western states. It continued to be a major player until March 2007, when the FDIC ordered it to stop making subprime loans. The banking regulator said Fremont was offering subprime mortgage loans in a way that “substantially increased the likelihood of borrower default or other loss to the bank.” On June 18, 2008, Fremont General Corp. filed for Chapter 11 bankruptcy protection.
• Parent/subsidiary companies: Fremont General Corp., parent
• CEO: Chairman/CEO: Murray Zoota
  • Most recent salary: 2005 — base salary, $475,000; bonus, $700,600; other, $125,900
• Location: Brea, California
• Year founded: 1937
• Backers: SEC filings show Fremont maintained lines of credit of at least $500 million each with Greenwich Capital Financial (part of the Royal Bank of Scotland), Goldman Sachs Mortgage Co., and Credit Suisse First Boston. It also held a $500 million master repurchasing agreement (an obligation to buy back loans if they soon become delinquent) with Lehman Brothers.

Lobbying overview

• Lobbying: 1999-2008: Fremont did not report any lobbying expenditures, but lobbying firms working for Fremont reported $120,000 in expenditures. **
• Total Contributions: At least $48,253 *
• Top Recipients:
  1. Representative Spencer Bachus, R-Alabama $12,000
  2. Jim Pederson, D-Arizona $9,400
  3. California Republican Party/Victory 2006 $3,700
  4. Senator John Kerry, D-Massachusetts $3,623
  5. Former Representative Andrea Seastrand, R-California $2,500

** 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.