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S&L's former CEO defends record

October 06, 2008|From the Associated Press

SAN FRANCISCO — Once hailed for running their savings-and-loan company like an endearing mom-and-pop shop, Herb and Marion Sandler are now being vilified as ruthless home lenders who helped destroy Wachovia Corp. and contributed to the financial decay that led to the U.S. government's $700-billion rescue plan to buy rotten mortgages.

After deflecting the media for months, Herb Sandler defended his lending record in an interview Sunday. He also tried to make a case for why Wachovia shareholders should demand substantially more than the $14.8 billion that Wells Fargo & Co. has offered for the company.

Sandler, 77, spoke to the Associated Press in the San Francisco office of his family's charitable foundation the morning after a skit on NBC's "Saturday Night Live" derided the Sandlers as predatory lenders who had duped unsophisticated borrowers and Wachovia too.

Although the timing of the interview was coincidental, Sandler was seething after watching the skit online.

"We are being unfairly tarred," Sandler said. "People have been telling us to speak out for some time, but we didn't think it was appropriate. That was clearly a mistake."

The ridicule represents a 180-degree turn for the Sandlers, who were considered the voices of reason as they steered Golden West Financial Corp. and its subsidiary, World Savings, through a period of financial recklessness that led to the failure of thousands of other S&Ls in the 1980s and 1990s.

Golden West never strayed from its staid lending approach while the Sandlers scolded others for their risky investments in commercial real estate and exotic business ventures.

Herb Sandler agrees with his critics on one point: He and Marion, who were Golden West's co-chief executives for more than 40 years, couldn't have picked a better time to sell the company than when they closed their $24.3-billion deal with Wachovia in October 2006.

After years of double-digit increases, home prices began to crumble once Wachovia took over.

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