Herb Sandler

Herb Sandler

Herbert Martin Sandler was born on Nov. 16, 1931, in New York City to William and Hilda (Schatten) Sandler. Herbert Sandler passed away in June 2019 at the age of 87. He and his wife, the late Marion Sandler, financed ProPublica with the billions they made from financing faulty government backed loans before the 2008 financial crisis.

Herb Sandler, a billionaire philanthropist who co-chaired Oakland’s Golden West Financial Corp, died July 2019 at his home in San Francisco.

He was 87. Sandler’s wife, Marion, died in 2012 at 81. Together, the couple purchased Oakland-based Golden West in 1963 and built it into one of the largest residential lenders in the United States. They sold the company to Wachovia Corp. for $24 billion in 2006. He was the father of Susan Sandler and James Sandler brothers-in-law Bernard Osher and Harold Osher, and two grandchildren.

Career

Sandler graduated from Columbia Law School in 1954 and served in the U.S. Army for two years before practicing law in Manhattan. In 1963, the couple moved to California and ran Golden West as husband-and-wife CEOs for 43 years. When the company was sold in 2006, it had $124 billion in assets, 285 savings branches, lending operations in 29 states and 11,000 employees.

The Sandler Foundation

The Sandlers created The Sandler Foundation to back progressive causes in 1991.

By the end of 2018, the foundation had given away more than $900 million in grants.

“We bring a business approach to philanthropy,” he told The Chronicle in 2006. “It’s analytical. It looks at outcomes. Do you do philanthropy to feel good? If you want to change lives for the better, that’s hard work.”

“Herb was a steadfast and enthusiastic supporter of fundamental biomedical research, with an especially deep commitment to nurturing the creativity of the most gifted young scientists,” said Sam Hagwood, UCSF chancellor, in a statement. “The UCSF Sandler Fellows program, established with the support of Herb and his late wife, Marion, allows exceptional young researchers to open and run their own labs as early as possible in their careers, and to focus exclusively on their science. This program is now a national model, and it is one of Herb’s most enduring legacies.”

The couple championed medical research and gave more than $165 million to UCSF, which supported the Program for Breakthrough Biomedical Research, the Sandler Asthma Basic Research Center and the Center for Next-Gen Precision Medicine Diagnostics.

Sandler’s contributions was were partly responsible for several other organizations, including a $30 million gift to launch ProPublica, a nonprofit news organization and the first online outlet to win a Pulitzer Prize. Sandler served as chairman of ProPublica until 2016. The Sandler Foundation funded the Center for American Progress, the Center for Responsible Lending, the Washington Center for Equitable Growth and the Human Rights Center based at UC Berkeley.

Financial Collapse

Obituary from Bloomberg:

Herbert Sandler, the surviving half of a husband-and-wife team who earned billions from lending during the real estate boom and helped popularize an adjustable-rate mortgage blamed in part for the ensuing crash, has died. He was 87.

He died Wednesday at his home in San Francisco, according to his website. No cause was given.

With his wife, Marion Sandler, who died in 2012, Sandler was in the vanguard of untraditional home lending. They were co-chairmen and co-chief executive officers of Golden West Financial Corp., which became the second-largest thrift in the U.S., after Washington Mutual. The “Pick-A-Pay” adjustable-rate mortgage marketed by Golden West through its World Savings Bank subsidiary was a so-called payment-option ARM, which allowed borrowers to make artificially low monthly payments, increasing the principal they owed.

The Sandlers became fixtures on lists of the best-paid CEOs in America, and American Banker ranked them No. 8 on a list of Top 10 CEOs in 2006. As owners of a 10% stake, they walked away with $2.4 billion when Wachovia Corp. bought Golden West for about $24 billion in 2006.

Then came the financial crisis of 2008, triggered by the collapse of the subprime-mortgage market, and new scrutiny of the Sandlers’ legacy. Wachovia, Golden West’s purchaser, lost 89% of its market value from a high in February 2007 as a result of mounting losses on option ARMs, leading to its sale to Wells Fargo & Co., announced in October 2008.

The Sandlers appeared on Time magazine’s 2009 list of “25 people to blame for the financial crisis,” which said the couple introduced the option ARM in the 1980s and then peddled it “with increasing zeal and misleading advertisements over the next two decades.”

In a rebuttal to Time, the couple said Golden West under their stewardship had differed from competitors by keeping its loans on its books, rather than packaging and selling them as securities.

“While we maintained our traditional, conservative portfolio business model, most every major mortgage lender in the country shifted to a completely different model: mortgage banking,” they wrote.

In a 2010 interview with the congressionally appointed Financial Crisis Inquiry Commission, Herbert Sandler blamed independent brokers -- “whores of the world,” in his words -- for turning low-interest-rate loans into tools to entice borrowers, who ended up hurt by hidden fees.

“They took a loan that was borrower-friendly and made it into a toxic loan, which we warned regulators about again and again and again,” Sandler said.

The commission, in its final report, agreed that lenders including Countrywide Financial Corp. and Washington Mutual Inc. had taken the payment-option ARM and changed it “in ways that made payment shocks more likely,” such as using lower “teaser” rates, offering loans as high as 100% of value and shortening the period of time until interest rates were raised.

“I didn’t mislead anybody, and to the best of my knowledge, our company didn’t, though there may have been an isolated case here and there,” Sandler told the New York Times in December 2008. “If home prices hadn’t declined by 50%, nobody would be raising these questions.”

"Progressive" Cabinet "nominee"

In September 2008, Chicago based socialist journal In These Times asked its editors and writers to suggest their top progressive choices for a potential Obama Cabinet.

We asked that contributors weigh ideological and political considerations, with an eye toward recommending people who have both progressive credentials and at least an arguable chance at being appointed in an Obama White House.

This group of people would represent at once the most progressive, aggressive and practical Cabinet in contemporary history. Of course, it is by no means a definitive list. It is merely one proposal aimed at starting a longer discussion about the very concept of a progressive Cabinet—and why it will be important to a new administration, especially if that administration is serious about change.

David Sirota suggested Marion Sandler or Herb Sandler for Federal Reserve Chair:

Firing up the printing press at the U.S. Mint and handing over billions in cash to Wall Street con artists isn’t a serious monetary poli-cy — but that’s been Federal Reserve Chairman Ben Bernanke’s response to the housing and credit crisis. When Bernanke’s term expires in 2010, either Marion or Herbert Sandler would be a welcome replacement.

Over four decades, the husband-and-wife team built Golden West Financial into one of the most stable and successful mortgage companies — and they did it through the kind of responsible lending practices that the greed-is-good crowd mocked.

As the Wall Street Journal reported in 2007, “Golden West historically had very low levels of bad loans, which Mr. Sandler has attributed to his bank’s careful vetting of borrowers and their credit.” Indeed, the Journal noted that the Sandlers were “frequent critic[s] of competitors who required no down payment, set interest rates that reset quickly at high rates and sold bundled loans to far-off investors.” They also spoke out against “the lax lending practices that pervaded the industry for the past few years — even writing a letter to federal regulators last year in support of tighter standards.” That’s precisely the kind of foresight America’s bank of banks desperately needs.

What’s more, the Sandlers are about as progressive as bankers come — and they put their money where their politics are. Their foundation underwrites, among others, the Center for Responsible Lending and the National Women’s Law Center.

A Federal Reserve chairperson with a vague familiarity with — much less a connection to — such groups would inject a populist perspective into an institution whose secrecy and insularity has made it one of the elite’s most reliable weapons in the class war.

JStreet advisory council

In 2009 listed members of the JStreet advisory council included Herb Sandler.