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An Article
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AMERICA'S HOME FORECLOSURES AND MORTGAGE SECURITIES FRAUD
Housing and Stock Market fraud
January 24, 2008
By
AHRC News Services
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This article I found confirms your thoughts about this mixed up and confused order of operations committed by some of our government leaders. I believe its gonna be another "Enron" bust; only this time all eyes will be on the legal system, and it's associates involved. I agree with you. Our legal and government system needs torn down and rebuilt. Read this.
A tide of lawsuits approaches U.S. mortgage market
By Vikas Bajaj Published: January 21, 2008
NEW YORK: Everyone wants to know who is to blame for the losses paining Wall Street and homeowners. The answer, it seems, is someone else.
A wave of lawsuits is beginning to wash over the troubled U.S. mortgage market and the rest of the financial world. American homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.
The legal and regulatory wrangles could dwarf the ones that followed the technology-stock bust and the Enron and WorldCom debacles. But the size and complexity of the modern mortgage market will make untangling the latest mess even trickier. Some cases stretch across continents. Others are likely to involve state and federal regulators.
"It will be a multi-ring circus," said Joseph Grundfest, a professor of law and business and co-director of the Rock Center of Corporate Governance at Stanford University. "This particular species of litigation will be manifest in many different types of lawsuits in many different jurisdictions."
The legal battles stretch from Main Street to Wall Street and beyond. Homeowners and subprime mortgage lenders are squaring off in dozens of cases that claim some lenders engaged in predatory lending practices and other wrongdoing. Cleveland and Baltimore are pursuing cases against Wall Street banks, saying local residents are suffering because the banks fostered the proliferation of high-risk home loans.
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Two questions lie at the heart of many of the cases. The first is whether lenders and investment banks alerted borrowers and investors to the risks posed by subprime loans or securities backed by them. The second is how much they were legally obliged to disclose.
"Those are the two issues that are frequently raised," said Jayant Tambe, a partner at the law firm Jones Day.
As defaults and foreclosures rise, the various players in the housing market are all pointing fingers at each other. State prosecutors like Andrew Cuomo, the attorney general of New York, are investigating whether investment banks that packaged mortgages into securities disclosed the risks to investors and credit-rating agencies. Investment banks, in turn, are accusing lenders and mortgage brokers of shoddy business practices.
"What strikes me here is that this a tainted system from A to Z," said Tamar Frankel, a law professor at Boston University. "Everybody blames everybody else. If you look at what is being said, there isn't one who doesn't blame another and there is half-truth in everything."
Wall Street banks that sold mortgage investments around the world face legal complaints from as far away as Australia and Norway. Lehman Brothers, the Wall Street bank with the biggest mortgage business, is being sued by towns in Australia that say a division of the firm improperly sold them risky mortgage-linked investments. Lehman has denied the charges and has said the subsidiary, formerly known as Grange Securities, acted properly.
Closer to home, members of a New Jersey family have sued Lehman for $4.14 billion, saying the firm steered them into complex securities that have become difficult to sell, Bloomberg News reported Friday. Lehman denied the accusations.
In the United States, Lehman itself is suing at least half a dozen mortgage lenders and brokers like Fremont Investment and Loan and Fieldstone Investment, claiming they sold Lehman dubious loans. Lehman claims that borrowers' incomes were overstated, home appraisals were inflated and the homes were in poor condition. In most cases, the lenders are fighting the allegations and Lehman's demand that they buy back defaulted or otherwise problematic loans.
In another case, the PMI Group, a mortgage insurer, sued WMC Mortgage, a subprime lender that has stopped making loans, and its corporate parent in California Superior Court in Los Angeles. PMI is trying to force the companies to buy back or replace loans that the firm was hired to insure and that it says were made fraudulently or in violation of the standards that the lender said it was using.
According to the lawsuit, a review of loan files found "a systemic failure by WMC to apply sound underwriting standards and practices." Reviewing a sample of the nearly 5,000 loans in the pool, Clayton identified 120 "defective" loans for which borrowers' incomes and employment were incorrect or where the borrower's intention to live in the home was incorrect. WMC offered to buy back 14 loans, according to the lawsuit.
Some of the loans have already defaulted, and a trustee's report on the pool of loans that was packaged and underwritten by UBS, the Swiss investment bank, shows that losses on some defaulted mortgages are as high as 100 percent. As of November, about 27 percent of the loans in the pool were either delinquent 60 days or more, in foreclosure or had resulted in a repossessed home.
http://www.iht.com/articles/2008/01/21/business/legal.php
Posted Jan 27 2008 1:24AM CET
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wendy Clardy
(View Profile)
Columbus, Ohio |
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Thank u very much for interesting article.
With due respect I fully agree with ur views and about the truths as stated that if we cannot assist in solving problems by getting involved, in my opinion we need not point out failures of the affairs and concerns. Needless to mention as the issues are so complex, as I also feel it is of no use to dirty our hands in the affairs unless those who support it,get involved please.
But we must not forget as I feel change for betterment is bound to come leaps and bounds...Success of association solely depends upon active participations of their member's interaction for the growth of community. And I feel it shall make the difference.
It is to put on record that the affairs and concerns have ample room for improvement as an affected homeowner as I feel. Erring concerned if any for one reason or other have failed to discharge their fiduciary duties in the interest of community and it is no longer as I feel a civil isolated matter between two parties involved but has become in my opinion deep rooted concerns based upon the writings from time to time in these columns.
It is strongly suggested that in my opinion Attorney general office may also look into specific cases to be read in context of CA State as I am not conversant with other states and their HOA applicable laws lest it is too late as in case of housing mortgage /credit mess etc as seen and in case they feel are in public interest may be exposed so that no one dares to indulge in such activities in future if any.
As read in AHRC columns it is given to understand that public officials are also looking into some cases as
Wrongful Takings By Public Officials
My personal thanks to the FBI, IRS, and numerous others
November 03, 2007By Mark Schemed (View author info)
Santa Ana, California
Moreover on national KABC-7 TV CHANNEL, a case study was telecast on 23 rd January 5:30 pm newscast about Newport community and two homeowners who had replaced natural green patches by artificial grass patches in their lawns without approval as reported led to the controversy for which usual fines/legal actions etc. It has been given to understand that the action taken by Homeowners involved in view of less maintence cost, saving of water etc whereas reported violations of CC&R by the concerned.As the matter is under dispute ,no further comments are being made by me.
In my opinion in consideration of innovations and diversity in the changing times, the concerned may consider to resolve the issues amicably without the involvement of vested group in the interest of all concerned.
However it is of interest that the media has focused the issue to avoid reoccurrences in the interest of all concerned.
I also feel as quote by Astronaut Mr Armstrong during landing on moon in 1961
One small step for man (unquote homeowners/HOA), one giant leap for mankind. (Unquote humanity)
It may be clarified that it is not the intent to get involved in the issues of the concerned but it has been stated as my personal opinion to read in letter and spirit.
It is in the best interest for all to get involved in the affairs of the self-governed respective Homeowner Association community
It is high time that media may also look in some specific cases on merit if deem fit in the interest of community.
It is felt that with the involvement of media may also draw attention of State and Federal agencies about the plight and hardships of Homeowners wherever applicable if any and may result in the corrective steps accordingly.
Moreover it is also submitted to the readers to come forward with suggestions and views to resolve such concerns amicably based upon their experiences if any in the interest of all concerned. I am sure it shall certainly make the difference to overcome such hardships and challenges. Otherwise this state of affairs shall go on. And it may also be added that we do not have a solution fit- for all.
All out efforts as I feel may be made by all concerned to come forward with some positive suggestions to focus on the corrective measures to improve the working of the affairs.
With kindest regards,
Ravi Kapoor
Paramount, California
Posted Jan 25 2008 4:25PM CET
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Ravi Kapoor
(View Profile)
Paramount, California |
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GLOBAL MARKETS-Insurance bailout hopes spur equity rebound
Thu Jan 24, 2008 7:20am EST
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 24 (Reuters) - Investors poured back into equities on Thursday, hoping a rescue plan for ailing bond issuers would stop a new round of credit losses, although claims of a massive trade fraud added to financial sector worries.
Wall Street looked set to open higher and demand for bonds fell sharply as equities rebounded. The dollar weakened.
Societe Generale (SOGN.PA: Quote, Profile, Research), meanwhile, said an "exceptional fraud" by one of its traders would cost the group 4.9 billion euros ($7.16 billion).
European and Asian stocks markets took their cue from overnight gains on Wall Street to rise sharply. The pan-European FTSEurofirst 300 was up 4.9 percent and Japan's benchmark Nikkei .N225 closed 2.1 percent higher.
The key driver was news that New York's insurance regulator had pressed major banks on Wednesday to put up billions of dollars to support wobbly bond insurers.
Insurers have become the latest sector to worry investors in the credit crisis. The debt they underwrite shares the top rating of many of these firms, so if the firms are downgraded because of losses, the debt rating goes down too.
This would force some investors to sell, dumping billions of dollars of municipal bonds, repackaged loans and the like onto markets, sending borrowing costs soaring and forcing more investor write-downs.
"If these (insurance) guys would fail, it would be much more catastrophic for banks' balance sheets and we would see another round of write-downs," said Edmund Shing, strategist at BNP Paribas in Paris.
Investors are also still digesting the U.S. Federal Reserve's emergency 75 basis point cut in benchmark interest rates on Tuesday with expectations of more to come.
Japan's market, meanwhile, was boosted by discussions among the country's ruling party about helping the stock market recover. The draft proposals included a call for the Bank of Japan to cut interest rates to zero again.
Overall, the new optimism wiped away some of this week's sharp losses on bourses. European investors, however, were rattled by the alleged fraud at Societe Generale, one of the biggest in financial history.
As well as the 4.9 billion euro cost, SocGen announced plans to raise 5.5 billion euros through a capital increase to shore up its balance sheet, also reeling from a crisis in global credit markets.
SocGen shares were down 4 percent after earlier being suspended.
BETTER IFO
European markets were little changed by a better-than-expected Ifo economic research institute report on German business confidence.
Euro zone government bond tumbled as stocks bounced back and European Central Bank Governing Council member Axel Weber made hawkish comments interpreted as lowering the likelihood of ECB rate cuts.
"If equities hold up on the back of this bond insurers rescue package, then it is going to be hard for bond markets to generate any upward price momentum so the risks would be for a bigger short-term pull-back," said ABN AMRO rate strategist Jason Simpson.
Two-year Schatz yields were 16 basis points higher at 3.394 percent, while 10-year yields were 7 basis points higher at 3.981 percent.
The euro climbed against the dollar , up a third of a percent at $1.4686. The dollar was flat at 106.68 Japanese yen . The euro rose a third of a percent to 156.61 yen .
(Editing by Ruth Pitchford)
© Reuters
http://www.ahrc.com/new/index.php/src/news/sub/article/action/ShowMedia/id/4137
Posted Jan 24 2008 3:44PM CET
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Username withheld
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STOCK MARKET FALLS..."It's only MONEY...MONEY can't make you HAPPY"...Did I say that??? ...finance...
Global Stocks Plunge as U.S. Crisis Spreads
Sell Offs on All Major Exchanges
Even pedestrians are reflected on the electronic market board in Tokyo Monday, Jan. 21, 2008. The Nikkei 225 index shed 535.35 points, or 3.86 percent, to close at 13,325.94 points on the Tokyo Stock Exchange, tracking declines on Wall Street and around Asia, on worries that the U.S. economy is recession bound.
A visitor studies stock prices at the Australian Securities Exchange in Sydney, Australia, Monday, Jan. 21, 2008. The Australian stock market closed lower for the eleventh session in a row on Monday. At the close the S&P/ASX200 index was down 2.9 per cent to 5,580.4 with the All Ordinaries down 2.91 per cent to 5630.9.
A visitor adjusts his glasses as he studies stock prices at the Australian Securities Exchange in Sydney, Australia, Monday, Jan. 21, 2008. The Australian stock market closed lower for the eleventh session in a row on Monday. At the close the S&P/ASX200 index was down 2.9 per cent to 5,580.4 with the All Ordinaries down 2.91 per cent to 5630.9.
People watch a giant screen showing Bombay Stock Exchange index on BSE building in Mumbai, India, Monday, Jan 21, 2008. Indian shares plunged Monday amid a regional market sell-off sparked by worries that the U.S. economy may enter a recession. The country's leading stock index appeared to be headed for its biggest ever single day loss.
Stock markets around the world plummeted yesterday as a financial crisis that began in the market for U.S. home mortgages spread to almost all corners of the globe.
U.S. markets were closed for Martin Luther King Jr. Day, but all the world's other major economies experienced sell offs. Stock prices fell more than 7 percent in Germany and India, 5.1 percent in China, 5.5 percent in Britain and 3.9 percent in Japan. Many countries experienced their worst market declines since Sept. 11, 2001, and the only country whose stock market rose was Sri Lanka.
Asian markets continued their steep drop today, with Japan down 4.4 percent in morning trading. As the market opened in India, shares fell nearly 10 percent, triggering an automatic halt to trading.
"Where the bottom is now is anyone's guess," said Wesley Fogel, a market strategist for HSBC.
Officials at the Treasury Department, in the Federal Reserve system and at major stock exchanges worked the phones yesterday, calling one another and their counterparts around the world. They were preparing for what looks likely to be a volatile week on Wall Street: Futures markets yesterday forecast a 4.5 percent drop in the Standard & Poor's 500 stock index when exchanges open this morning.
A Treasury spokeswoman said only that the department is always monitoring markets and in touch with participants. A spokeswoman for the Fed declined to comment.
The markets fell as fears spread that massive losses on loans made to U.S. home buyers would cascade through the world financial system. Some of the firms that play important, but usually invisible, roles in the global financial architecture are turning out to be exposed to the downturn in the housing market in such a way that their ability to function is threatened.
The companies that insure bond investors against defaults are having to make massive payouts. One, ACA Financial, owes $60 billion that it cannot afford to pay and has been taken over by the Maryland insurance regulator. Its credit rating has been lowered.
The problems among bond insurers have meant that a wide variety of financial institutions cannot count on receiving payments due them, causing further losses.
Other news yesterday shows just how widely the damage has spread. A Chinese newspaper reported that the Bank of China is exposed to subprime U.S. mortgage loans to a degree it had not previously disclosed and may have to write down the value of its $8 billion in such investments. Several large European banks have taken similar hits.
Those losses could have importance beyond the hit they cause to the banks' share prices. Banks and other financial institutions play an important role in an economic downturn: lending to businesses and consumers so they can help the economy get back on track. The multibillion dollar losses could make them unable to play that role.
Moreover, foreign investors have been plowing capital into U.S. banks to help them continue lending, which made the losses particularly worrisome, some analysts said.
"Those infusions of capital have been crucial to maintaining performance to date," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "If foreign investors should significantly retreat from U.S. markets, that leaves us to our own recovery. In that case, the current credit crunch will continue to bite and we maintain a very high risk of recession."
http://fromtheleftsideofmybrain.wordpress.com/2008/01/24/stock-market-fallsits-only-moneymoney-cant-make-you-happydid-i-say-that-finance/
Blog: FROM THE LEFT SIDEOF MY BRAIN
Posted Jan 24 2008 3:22PM CET
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Username withheld
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"And the real victims of America's mortgage fraud, the defrauded homeowners, the ones herded into illegal homeowner association housing and mortgage contracts, try to survive the hounding process servers, lawyers, judges and sheriffs and the profiteers of America's home foreclosure fraud."
Process servers? I would hesitate to guess that these foreclosure vipers, under color of law, have not even given a nod to that formality, due to the unconstitutional UCC and UCIOA laws which the corporate attorneys wrote to protect their income streams and interests after the Federal Reserve Act was passed. Transferring the printing of our currency to these private bankers, and in so doing, jeopardizing our economy by not including within the Act any 'regulation' or Congressional oversight was the very fear that the banking interests and corporations springing up around them would result in the homelessness the country is now experiencing. Thus, Ben Bernanke and the Board of Directors have every single Americans home and mortgage under their thumbs to manipulate at will, with the UCC and UCIOA 'backup' their corporate foreclosure lackeys hustled state to state to then statutorily enforce the provisions of the non-judicial foreclosures provisions and acceleration clauses contained within these 'consensual' contracts, without the Bill of Rights protections for citizens for these property seizures.
Until the 80's it was still possible to find assumable, FHA and VA loans with more protections, with simple 5-10 page sales contracts. Now, they are 40-50 pages long, can be resold during the term of the loan to these international investors and the terms even changed without the buyers consent (with the feds simply requiring disclosure of this provision), with few people except those with sterling credit able to get anything other than 'interest only' or ARMs based now not even on prime, but LIBOR rates. With the loan officer's simply pointing out where to sign on the dotted line, or 24 hour review time periods in order to 'lock in' the rates.
So far, the help most homeowners have gotten are similar to that given to the public in other criminal activities - seminars teaching the public 'how not to become a victim,' with recommendations to take an attorney with you or have them review the documents (like the average first time buyer, or 70% of the American people can afford that on top of the other junk fees and costs so the various industries can get up their profits, although some states have also upped the ante in closing in attempting to legally require an attorney at closing), have interpreters accompany you if you are non-English speaking (even English speaking Americans can't understand most of the terms in these loan docs), and 'shop around' (with boilerplate contracts in most instances, just what are you shopping for, and where is there any consumer information on complaints filed for mortgage fraud?)
All these 'helps' are again passing the blame back to the citizens for the government and Feds negligence in their 'regulation' and 'oversight' duties of commerce, sort of like the police teaching urban survival classes to kids in school - so then if you or your children are 'victimized' hey, you are not really a 'victim' at all, since the police have spent so much time and money (yours) 'educating' the public. Which is also why they no longer patrol neighborhoods and the public is left to protect their homes and properties on their own (until, of course, they remove the 'right to bear arms' and leave the public totally defenseless).
So, the market rebounded from it's losses of yesterday today with that 'shot in the arm' the Fed graciously extended, of course, at the taxpayers expense again since our federal deficit will just increase more, while the corporate securities lawyers make a bundle, as indicated, the American people are and will continue to be left homeless, and victimized, and with the tab.
The Fed and Congress are selling the country right out from under their countrymen bit by bit, both in this mortgage fraud, and socialized land scheme. Think this might be the way to solve the Social Security problem, and kill off the baby boomers before retirement?
Posted Jan 24 2008 5:38AM CET
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Username withheld
Phoenix, Arizona |
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