Mortgage Class Action
I have written numerous articles relating to today's mortgage meltdown. What is happening is what we thought would happen. Let's review this entire scenario.
(1) You bought a home with nothing down.
(2) Your lender provided a method in which both of you thought that the home would go up in value.
(3) The method the lender provided did not take into consideration that when the terms changed in a couple of short years, your income did not increase.
(4) You were forced to pay your bills and live off of the credit cards.
(5) This later came to bite you because now your behind the eight-ball with high interest rates, cannot make payments and "whammo" you're foreclosed on. Got it?
What you did not know was that your lender was only acting as a broker to the greedy cats on Wall St. Yup; they contrived a plot to "shake down" the American public. Here is how it worked and you were the victim. But, our "trusty" politicos in Washington, both Democrats and Republicans were in on this crooked scheme.
An investment banker would set up a trust that was secured by your mortgage note. Your pristine credit of (750) gave this trust an excellent rating from Moody's or one of those rating companies. Once the rating was there, then this would attract investors to this trust to purchase investment certificates. While this was going on, more mortgages were directed to this trust, via the investment banker for the purpose of providing assets to protect the investors. Simple deal. But, here is the trick bag that you didn't know about.
Because this trust had to be registered with the Securities and Exchange Commission, everything had to be legit. So, within the filing of the paperwork, a "pooling and servicing" agreement was put in place. This agreement provided for the investment banker to move non-performing loans out of the trust and replace them with performing loans. This was done, again to protect the investor that purchased these certificates. All, of this with the blessing of the Securities & Exchange Commission.
Everything is now in place to protect everyone. Except, the greed of Wall St. The investment banker in cahoots with the asset manager of the trust worked this Ponzi scheme to perfection. They might have gotten away with it, except greed tripped them up.
Let's just say that the Investment banker invited the portfolio manager of a pension plan to invest into this trust. He offered a (06%) return that was incidentally insured by AIG. Let me stop here for a minute. Do you remember last summer when the Democrats and Republicans were fighting "tooth and nail" one day around (9:30 AM)? They then went into some type of a "hidden session" and around (1:00 PM) there were smiling and hugging each other. WHY? Well, they just agreed to bail out AIG with your money because AIG ran out of cash to pay of those toxic loans. Let's get back on track now.
Okay, now that the pension plan has invested into the trust for that safe return, they wanted to earn ($50,000.00) so they had to put up ($833,000.00) to earn that amount. So, here is where the greed kicks in. The, investment banker with his cronies replace that prime paper with a couple of toxic loans that yield (16%). All he needs is ($300,000.00) of loans yielding that high interest rate to provide the ($50,000.00) for the pension plan. This is also insured by AIG. Read carefully. The difference between the ($833,000.00) that the pension plan paid into the trust and the ($300,000.00) that was paid out for the toxic loans is ($533,000.00) Guess who put the difference or the spread into their pockets? That is the basis for today's investigations going on and where greed entered into the picture.
You didn't have a chance. Now that someone is trying to foreclose on you, more and more Judge's have figured it out and are now making rulings that favor the homeowner. The reality is that the homeowner does indeed owe money. But to whom? Also, the homeowner has been victimized by pumped up appraisals in order to make the numbers work.
Homeowners are not totally guilty alone. There are a lot of pieces to this puzzle. But in order to un-ravel the pieces and make sense, we have to start somewhere. And that somewhere is at the root of the problem. Let's address this greed and get people back into their homes at today's value.
There is a class action already filed in Massachusetts, with actions to follow in California, Texas, Florida and most of the other states. The first class action was filed on December 24th, 2009 in US Federal Court in Boston.
Regis Sauger
Regis Sauger is a licensed Mortgage Broker in Florida, an author, lecturer on credit awareness. He has conducted seminars for underwriters, attorneys, mortgage lenders, realtors and the general public.
http://www.yurcredit.com -- http://www.thepoweroffreedom.com
Please Leave a Comment
