July 28, 2009
The SEC announced today that it is investigating a mortgage investment scheme based in Phoenix involving commercial loans to area developers. These loans were made from a now bankrupt fund, Mortgages Ltd. The company was established to make short-term, high interest loans to commercial concerns. Another Phoenix-based company, Radical Bunny LLC is also being linked by the SEC to Mortgages Ltd.
The former CEO of Mortgages Ltd., Scott Coles, committed suicide last June shortly after the company filed for bankruptcy. Radical Bunny LLC is run by Tom Hirsch, a friend of Coles and the accountant for Mortgages Ltd. Radical Bunny LLC is also currently seeking bankruptcy protection. In addition to Mr. Hirsch, Radical Bunny officers, Berta Walder; Howard Walder and Harish P. Shah have also been named as defendants by the SEC.
Investors in the mortgage fund backing the Mortgages Ltd loans were apparently not informed of the risk involved and were victims of "material misrepresentations". The safety of investor's money, "material misrepresentations" and the unusually high risk involved with the scheme are the focus of the SEC's investigation.
We are encouraged that the SEC is finally bringing real estate fraud charges against those whose greed was instrumental in collapsing the entire real estate market and subsequently the Nation's economy.
It has been our contention that any company/individual that engaged in backing residential or commercial real estate mortgages, without informing buyers of the incredible risk involved with their plan to leverage, bundle, and sell the buyer's mortgage along with a bunch of basically worthless "liar loans" are guilty of fraud. These greedy plans needed to be disclosed to investors in the current case and residential mortgagees who have been robbed by shameless financial crooks.
Now, we just need the first residential mortgage fraud case to be initiated by someone to blow this scheme wide open and expose the extent and nature of the damage done by banks, politicians, brokers, hedge funds, insurance companies, rating and oversight agencies, etc. simply due to their unfettered greed. The same type of charges the SEC is bringing against Mortgages Ltd could easily be proved against any mortgage concern, such as Countrywide Mortgage, who engaged in the "derivatives" scheme employed during the 2003-08 time frame.
Showing posts with label Countrywide. Show all posts
Showing posts with label Countrywide. Show all posts
Tuesday, July 28, 2009
Thursday, July 16, 2009
CLASS ACTION SUIT AGAINST BANKS & MORTGAGE COMPANIES PLANNED
July 16, 2009
In an attempt to force banks and mortgage companies to deal with distressed homeowners, we've learned that a class action suit against these organizations is being considered by a number of community action organizations. These suits would be the result of investigations that indicate low-mid income home buyers, especially loans made to minorities, were deceptive at best. Felony fraud charges are being considered against the top brass of many of these companies.
The coalitions we've spoken to prefer to remain quiet on many of the details concerning the suit, but some groups have said that they plan to consolidate their efforts. Initial targets will include virtually all major banks (e.g., BofA, Citibank, Wells Fargo, Chase, etc.) and mortgage companies (e.g., Countrywide). Also included will be a demand for mortgage servicing companies to immediately identify the "investors" they're representing for purposes of payment collection.
The identification of "investors" being represented by mortgage service companies has been at issue nearly since the real estate meltdown began. Even though required to provide this information by law when requested by the mortgagee, these "black holes" have refused to comply.
The failure to disclose the identification of "investors" makes us think there may be more to their refusals than simply arrogance and incompetence. Is it possible that by revealing these "investors" it will show that the whole CDO venture was a scam?
Since Congress is apparently not interested in saving the homes of taxpaying voters, it's great to see people taking things into their own hands! If Congress wants to this class-action suit to go away, maybe we'll see some action from them. But I would warn against thinking Congress would have home owner's best interests at heart, so watch what might be proposed. If it smells, throw it back!
In an attempt to force banks and mortgage companies to deal with distressed homeowners, we've learned that a class action suit against these organizations is being considered by a number of community action organizations. These suits would be the result of investigations that indicate low-mid income home buyers, especially loans made to minorities, were deceptive at best. Felony fraud charges are being considered against the top brass of many of these companies.
The coalitions we've spoken to prefer to remain quiet on many of the details concerning the suit, but some groups have said that they plan to consolidate their efforts. Initial targets will include virtually all major banks (e.g., BofA, Citibank, Wells Fargo, Chase, etc.) and mortgage companies (e.g., Countrywide). Also included will be a demand for mortgage servicing companies to immediately identify the "investors" they're representing for purposes of payment collection.
The identification of "investors" being represented by mortgage service companies has been at issue nearly since the real estate meltdown began. Even though required to provide this information by law when requested by the mortgagee, these "black holes" have refused to comply.
The failure to disclose the identification of "investors" makes us think there may be more to their refusals than simply arrogance and incompetence. Is it possible that by revealing these "investors" it will show that the whole CDO venture was a scam?
Since Congress is apparently not interested in saving the homes of taxpaying voters, it's great to see people taking things into their own hands! If Congress wants to this class-action suit to go away, maybe we'll see some action from them. But I would warn against thinking Congress would have home owner's best interests at heart, so watch what might be proposed. If it smells, throw it back!
Thursday, July 9, 2009
HOUSING CRISIS CONTINUES TO BE IGNORED
July 9, 2009
In what can only be described as hiding their heads in the sand, Congress continues to find time to address every and any issue except the housing crisis. The most critically "at risk" component of our economy is being completely ignored and we have to ask why is there complete silence on the subject? The answer is most likely that lobbyists for the banking and mortgage industries are doing a stellar job.
You just have to wonder what kind of "sweetheart" deals are being cooked-up to keep a lid on the crisis? Maybe Chris Dodd (D-Connecticut) is waiting for better refi terms, since his initial "Friends of Angelo" home loan from former Countrywide Mortgage CEO Angelo Mazilo (the details of which have never been revealed to this day!) is probably not so favorable in today's market. Even after numerous calls for details of the favorable under-the-table mortgage, Dodd has successfully been able to sweep the issue under the table for years.
There must be a really major reason for the silence, because ignoring it for much longer will destroy our economy. It doesn't matter how much money they throw at other institutions (e.g., banking, insurance, automobile), without a strong recovery in housing, the economy is doomed. It's going to be ugly when homeowners finally wake-up and discover that, after faithfully paying their mortgage every month for years, not only have they lost all the equity in their home, but now they're actually underwater in the loan. Worse of all, they'll realize that elected governmental officials and their appointees were instrumental in facilitating the continued collapse and they'll also discover that recovery of their investment isn't going to happen. On that fateful day, I hope our elected officials and their cronies have ...., well let's just let them figure that one out.
We are demanding some REAL action NOW!
In what can only be described as hiding their heads in the sand, Congress continues to find time to address every and any issue except the housing crisis. The most critically "at risk" component of our economy is being completely ignored and we have to ask why is there complete silence on the subject? The answer is most likely that lobbyists for the banking and mortgage industries are doing a stellar job.
You just have to wonder what kind of "sweetheart" deals are being cooked-up to keep a lid on the crisis? Maybe Chris Dodd (D-Connecticut) is waiting for better refi terms, since his initial "Friends of Angelo" home loan from former Countrywide Mortgage CEO Angelo Mazilo (the details of which have never been revealed to this day!) is probably not so favorable in today's market. Even after numerous calls for details of the favorable under-the-table mortgage, Dodd has successfully been able to sweep the issue under the table for years.
There must be a really major reason for the silence, because ignoring it for much longer will destroy our economy. It doesn't matter how much money they throw at other institutions (e.g., banking, insurance, automobile), without a strong recovery in housing, the economy is doomed. It's going to be ugly when homeowners finally wake-up and discover that, after faithfully paying their mortgage every month for years, not only have they lost all the equity in their home, but now they're actually underwater in the loan. Worse of all, they'll realize that elected governmental officials and their appointees were instrumental in facilitating the continued collapse and they'll also discover that recovery of their investment isn't going to happen. On that fateful day, I hope our elected officials and their cronies have ...., well let's just let them figure that one out.
We are demanding some REAL action NOW!
Friday, July 3, 2009
HOW DID THE HOUSING CRISIS DEVELOP?
July 3, 2009
How did the housing crisis develop and who was responsible? It's basically pretty simple and the reason is all too obvious. Too often, reporters get so bogged down in their own attempt to explain a particular situation that they bore their readers. We're going to give to the "bullet points", some of the major names of those involved, plus links for you to do your own research if you don't believe what you're about to read. We also recommend that you watch CNBC's special "House of Cards" the next time it plays in your area or on demand at Hulu.com.
Some of the major names you need to blame are:
Members of Congress Barney Frank, Maxine Waters, Nancy Pelosi, Chris Dodd.
Other Federal government players: Fed Chairman Ben Bernanke; Christopher Cox Chairman of the SEC and SEC regulators.
Main Players: Fredrick Rains of Freddie Mac; Angelo Mozilo former CEO of Countrywide Mortgage; investment banks/bankers and hedge funds who conspired to create an investment vehicle known as Collateralized Debt Obligations (CDO) made up of "TOXIC" sub-prime mortgages packaged and fraudulently rated AAA by underwriters; AIG.
Reason: GREED! Plain and simple greed! The accumulation of obscene amounts of money as "salary, bonus, stock options" that were thrown at the top players in this "game".
This is what happened. The Congressional players mentioned earlier wanted to expand their voter base. They correctly figured that if they could play to the disenfranchised, a huge and previously ambivalent and non-voting portion of our population, they could add tremendous numbers to their constituency.
Now, how to get this group onboard? Answer: Let's make sure they can "live the American dream" by becoming homeowners. We'll make it next to impossible for anyone to be turned down for a mortgage. We'll even let people with no documented income qualify.
Now, we need to get others to buy into the scheme. That's where Freddie Mac and Fredrick Rains enters the picture. Promise him big bonuses for buying up these toxic mortgages and one major player is on the team. Now, get the word out to mortgage brokers, investment bankers and let them "play around" with this worthless paper to make it look like an investment opportunity.
The investment boys/girls came up with the CDO idea for marketing these toxic "assets". These CDOs were sold to pentions, mutual funds, etc. and they were off - making huge amounts of money for themselves in the process.
Now, to make sure they didn't feel the sting when things turned bad (and they knew they would). They bought insurance from AIG to insure that they would be paid when things eventually went in the toilet.
Now, most homeowner's have lost most if not all of the equity they had built over years of faithfully paying their monthly mortgage payment. The bankers and investment bunch have collected 10's of millions of dollars in "bonuses", which basically bankrupted many of their companies. Many of their firms have now been rescued by the Federal government at taxpayer's expense and taxpayers have also rescued AIG, who had to pay off on the insurance policies when the CDOs became worthless.
When are government officials going to actually help out homeowners? Never, unless, homeowners demand that this issue be seriously addressed. Will Congress and the President listen? Probably not until their hand if forced. The Federal and State governments are in desperate need of funds. They intend to find it anywhere they can.
Support for the nonsense going on in Washington and in many State Capitals (attention California) has to stop. They cannot continue to spend and ignore the underlying issue if citizens don't fund their folly. Elected officials who don't get the message soon will find themselves outside the club after the next chance voters have to throw the bums out!
A mere fraction of the "stimlus package" devoted to housing could have arrested the housing meltdown and quickly turned the economy around. Now, we've paid off all the cronies and insiders, own automobile companies, insurance companies and things are NOT getting better.
Mr. President and members of Congress, please require all holders of mortgages to immediately do the following:
How CDOs are to blame:
http://marketplace.publicradio.org/display/web/2008/10/03/cdo/
Angelo Mozilo
http://www.sec.gov/news/press/2009/2009-129.htm
http://www.nytimes.com/2009/06/05/business/05insider.html
Franklin Raines and Freddie Mac
http://seattletimes.nwsource.com/html/businesstechnology/2004358433_webraines18.html (Raines)
How did the housing crisis develop and who was responsible? It's basically pretty simple and the reason is all too obvious. Too often, reporters get so bogged down in their own attempt to explain a particular situation that they bore their readers. We're going to give to the "bullet points", some of the major names of those involved, plus links for you to do your own research if you don't believe what you're about to read. We also recommend that you watch CNBC's special "House of Cards" the next time it plays in your area or on demand at Hulu.com.
Some of the major names you need to blame are:
Members of Congress Barney Frank, Maxine Waters, Nancy Pelosi, Chris Dodd.
Other Federal government players: Fed Chairman Ben Bernanke; Christopher Cox Chairman of the SEC and SEC regulators.
Main Players: Fredrick Rains of Freddie Mac; Angelo Mozilo former CEO of Countrywide Mortgage; investment banks/bankers and hedge funds who conspired to create an investment vehicle known as Collateralized Debt Obligations (CDO) made up of "TOXIC" sub-prime mortgages packaged and fraudulently rated AAA by underwriters; AIG.
Reason: GREED! Plain and simple greed! The accumulation of obscene amounts of money as "salary, bonus, stock options" that were thrown at the top players in this "game".
This is what happened. The Congressional players mentioned earlier wanted to expand their voter base. They correctly figured that if they could play to the disenfranchised, a huge and previously ambivalent and non-voting portion of our population, they could add tremendous numbers to their constituency.
Now, how to get this group onboard? Answer: Let's make sure they can "live the American dream" by becoming homeowners. We'll make it next to impossible for anyone to be turned down for a mortgage. We'll even let people with no documented income qualify.
Now, we need to get others to buy into the scheme. That's where Freddie Mac and Fredrick Rains enters the picture. Promise him big bonuses for buying up these toxic mortgages and one major player is on the team. Now, get the word out to mortgage brokers, investment bankers and let them "play around" with this worthless paper to make it look like an investment opportunity.
The investment boys/girls came up with the CDO idea for marketing these toxic "assets". These CDOs were sold to pentions, mutual funds, etc. and they were off - making huge amounts of money for themselves in the process.
Now, to make sure they didn't feel the sting when things turned bad (and they knew they would). They bought insurance from AIG to insure that they would be paid when things eventually went in the toilet.
Now, most homeowner's have lost most if not all of the equity they had built over years of faithfully paying their monthly mortgage payment. The bankers and investment bunch have collected 10's of millions of dollars in "bonuses", which basically bankrupted many of their companies. Many of their firms have now been rescued by the Federal government at taxpayer's expense and taxpayers have also rescued AIG, who had to pay off on the insurance policies when the CDOs became worthless.
When are government officials going to actually help out homeowners? Never, unless, homeowners demand that this issue be seriously addressed. Will Congress and the President listen? Probably not until their hand if forced. The Federal and State governments are in desperate need of funds. They intend to find it anywhere they can.
Support for the nonsense going on in Washington and in many State Capitals (attention California) has to stop. They cannot continue to spend and ignore the underlying issue if citizens don't fund their folly. Elected officials who don't get the message soon will find themselves outside the club after the next chance voters have to throw the bums out!
A mere fraction of the "stimlus package" devoted to housing could have arrested the housing meltdown and quickly turned the economy around. Now, we've paid off all the cronies and insiders, own automobile companies, insurance companies and things are NOT getting better.
Mr. President and members of Congress, please require all holders of mortgages to immediately do the following:
- Decrease the principal to realistically reflect current market prices;
- Allow homeowners to enter into fixed-rate mortgages, regardless of balance owed, with a monthly payment not to exceed 25% of the family's net income, including property taxes and insurance.
How CDOs are to blame:
http://marketplace.publicradio.org/display/web/2008/10/03/cdo/
Angelo Mozilo
http://www.sec.gov/news/press/2009/2009-129.htm
http://www.nytimes.com/2009/06/05/business/05insider.html
Franklin Raines and Freddie Mac
http://seattletimes.nwsource.com/html/businesstechnology/2004358433_webraines18.html (Raines)
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