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 Mortgage. Show all posts
Showing posts with label Countrywide Mortgage. 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!
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