Pursuits

The Subprime Money Behind a Winning Horse

The owner of I’ll Have Another tangles with state regulators

One race to go: Reddam's I'll Have Another in the Preakness Stakes winner's circlePhotograph by Rob Carr/Getty Images

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By Carter Dougherty

May 31, 2012 at 10:50 PM UTC

This article is for subscribers only.

BusinessWeek Cover Image (12_23, portrait)

This article is part of the June 4, 2012 issue of businessweek.

When his colt I’ll Have Another charged from behind to win the Preakness Stakes on May 19, J. Paul Reddam joined an exclusive club of thoroughbred owners who’ve been one race short of the Triple Crown. Not far from the Baltimore track, Maryland state regulators were probing the consumer loan business that helps fund Reddam’s wildly successful investment in horses.

Reddam, 56, a former philosophy professor, made his fortune with a subprime mortgage firm, DiTech Funding, which he sold to General Motors in 1999 for more than $240 million. He is now owner and chief executive officer of CashCall, which makes mortgage and short-term loans. The Anaheim (Calif.)-based company has tangled with three states over alleged violations of consumer protection laws.