As one of the first women to hold a position of power on Wall Street, Marion O. Sandler was notable even before she and her husband, Herbert, spent 43 years building Oakland's World Savings Bank into such a major — and ultimately controversial — adjustable mortgage lender.
Sandler, the daughter of Jewish immigrants from Lithuania and Russia, exploited her keen analytic skills to become Dominick & Dominick's first female executive in 1955 and joined Oppenheimer & Co. as a savings and loan analyst in 1961.
Spotting an opportunity, she and her husband, an attorney she had met in the Hamptons, used a bank loan two years later to buy the Oakland S&L, which then had two branches. By the time the co-chief executives were through, there were 285 World branches in 10 states.
Marion Sandler died Friday at her home in San Francisco after a long battle with severe asthma and migraine headaches, her family announced. She was 81.
Having sold World's parent firm, Golden West Financial Corp., for $24 billion on the eve of the mortgage meltdown, the Sandlers used their more than $2 billion cut of the proceeds to greatly expand their wide-ranging philanthropies. Their foundation's major efforts included significant funding for fair-lending advocates, such as the Center for Responsible Lending, for asthma research and for investigative reporting.
Yet the Sandlers also were attacked for pioneering pay-option mortgages, which allowed borrowers to pay so little that their balances rose instead of fell. Critics blamed the loans for the demise of Wachovia Corp., which bought Golden West in 2006 and was near collapse when it sold itself to Wells Fargo & Co. two years later.
The Sandlers countered that their Pick-a-Payment loans, which they had made since the 1980s, had never been problematic until home prices plunged 50% in many areas — a decline they said no type of loan could weather. They blamed Wachovia's problems on bad commercial loans the Charlotte, N.C., bank had originated.
Herb Sandler, in particular, went on the offensive, complaining that large rivals such as Countrywide Financial Corp. and Washington Mutual Inc. threw out World's guidelines, which aimed to provide affordability as well as flexibility, and sold low down payment "perverted" versions of the pay-option mortgages to borrowers who couldn't afford them.
Despite the Sandlers' history of vocal attacks on abusive lending, the media made targets of the liberal couple — without justification, according to their longtime friend Lowell Bergman, an investigative reporter.
"They were caught up in a period of media frenzy about the mortgage meltdown," Bergman said.
Attacks included a New York Times story that said World's lending practices had deteriorated, a would-be whistle blower on "60 Minutes" who described deceptive practices, and a satirical sketch on NBC-TV's "Saturday Night Live" that said the Sandlers "should be shot" for their roles in the financial meltdown.
SNL creator Lorne Michaels had the skit re-edited for rebroadcast and online, deleting the "should be shot" graphic and other sensitive details and saying there was "absolutely no evidence" of wrongdoing by the Sandlers. The New York Times ran four corrections. An arbitrator, ruling that the "60 Minutes" whistle blower had no evidence, awarded him nothing.
But the Sandlers had been deeply wounded.
"Marion felt sadness and anger at being called something we were not," Herb Sandler said in an interview Monday. "Had these stories been reported objectively, they would never have been published."
Marion Osher was born Oct. 17, 1930, in Biddeford, Maine. She graduated Phi Beta Kappa from Wellesley College in 1952, attended the Harvard-Radcliffe Program in Business Administration, and earned her MBA from New York University with high honors in 1958. She married Herb Sandler in 1961.
Friends and business associates recalled her sitting in meetings, listening for half an hour at a time and knitting before making sometimes pointed inquiries that Steve Daetz, executive vice president of the Sandler Foundation, said "elicited a huge amount of information."
The foundation founded and provided tens of millions of dollars in support of ProPublica, the first online news source to win a Pulitzer Prize. "Marion shaped every key decision that brought ProPublica into being," the nonprofit investigative newsroom said on its website.
Bergman said funding from the Sandlers enabled his PBS documentary series "Frontline" to open a West Coast office 22 years ago in Berkeley, where Bergman is a professor at the University of California.
He recalled the extraordinary closeness that linked the Sandlers.
"Herb is much more talkative and insistent, but he would defer to her judgment over and over in business and philanthropic matters," Bergman said. "And she in turn would take pride in him when he would step out and deliver their idealistic messages. They had an extraordinary relationship and leave an extraordinary legacy."
In addition to her husband, Sandler is survived by daughter Susan, son James, two grandchildren and her brothers, Bernard and Harold Osher. No memorial service is planned.