Cashing In at the Race Track While Facing Charges of “Abusive” Lending Practices

After dueling through grueling early fractions and holding the lead turning for home, Kentucky Derby winner Nyquist was overpowered in the stretch of the Preakness Stakes Saturday by his rival Exaggerator. Exaggerator would go on to win by four lengths, as Nyquist faded to third. Nyquist was unable to repeat his performance from two weeks ago when he overwhelmed 19 other three-year-olds and cruised to a 1 1/2 length victory, earning the horse’s owner, J. Paul Reddam, a cool $1.2 million.

Four years ago, Reddam’s horse I’ll Have Another won both the Kentucky Derby and the Preakness Stakes, earning $2.7 million before retiring due to injury before the Belmont Stakes. Soon after, the horse was sold for $10 million to Big Red Farm in Japan. It was a phenomenal return on investment for Reddam, who purchased the horse a year earlier at auction for $35,000.

Reddam, a former philosophy professor, is used to big profits. In 1995, he entered a considerably more lucrative industry than academia when he founded the subprime mortgage lending company DiTech. The company was one of the first to take advantage of the internet to offer home-equity loans online of 125% of the home’s value.

The Los Angeles Times said that Reddam “immediately shook up the Southern California mortgage industry with his scrappy style and aggressive advertising. Though his techniques raised eyebrows, they were often copied by rivals, most notably his use of freeway billboards to advertise the…

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