Tuesday, September 30, 2008
Time for a new Home Owners' Loan Corporation?
From Boom to Bust Helping Families Prepare for the Rise in Subprime Mortgage Foreclosures (American Progress, March 12, 2007)
Why the original Paulson Plan (and lenders) did not want to allow bankruptcy judges the authority to review mortgages:
The Truth in Lending Act - Let the lawsuits begin!, February 6th, 2008
Federal laws like the Truth in Lending Act(TILA), The Home Ownership Equity Protection Act (HOEPA) the Real Estate and Settlement Procedures Act (RESPA) are now being used by lawyers and homeowners to fight back against their lenders and servicers. These laws are also being used by smart lawyers and homeowners in the foreclosure process as an effective foreclosure defense tool and with great results.
Something as simple has reviewing your loan documents to identify violations of these laws can help homeowners in their quest to save their homes from foreclosure. If these viloations are found on your mortgage, you may be entitled to significant monetary damages from your lender.
Often, these damages can run in the tens of thousands of dollars. I personally have seen damages totalling upwards of $125,000 awarded to a homeowner who actually was foreclosed on and their home was sold at auction. This homeowner received her home back, damages, attorneys fees and a new, good loan.
Any consumer harmed by a violation of Truth in Lending Act may bring a civil suit against the lender. [Loan Safe Solutions]
Uh oh: "[S]ignificant monetary damages from your lender"
That can only mean one thing: Activist judges!
What will we tell the Next Generation of Swine?!
Well, if it makes the Right Wing House of Crazies Quorum feel better they can just think of it as a Trickle Down correction. Or the Invisible Hand, holding it's invisible dick, and peeing in their fucking jellybean jar. Or whatever strokes their dainty feelings. Heh, indeedy.
Via Calculated Risk: SOCAL Connected (Los Angeles) video of Foreclosure Alley, the Inland Empire, Riverside County, California.
Thomas Frank (Wall Street Journal):
The GOP Blames the Victim. Capitalism sure is fragile if subprime borrowers can ruin it.
I asked Bill Black, a professor of economics and law at the University of Missouri-Kansas City and an authority on the Savings and Loan debacle of the 1980s, what he thought of the latest blame offensive. He pointed out that, for all their failings, Fannie and Freddie didn't originate any of the bad loans -- that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.
Most of the mistakes for which we are paying now, Mr. Black told me, were actually made "by four entities that under conservative economic theory should have exercised effective market discipline -- the appraisers, the originators of the mortgages, the rating agencies, and the investment banking firms that packaged the subprime mortgage-backed securities." Instead of "disciplining" the markets, these private actors "served as the four horsemen of the financial apocalypse, aiding the accounting fraud and inflating the housing bubble." It is they, Mr. Black says, who "turned a crisis into a catastrophe."
Ah, but truth is no ally to a conservative with his back to the wall. So much more helpful are the trusty narratives on which the movement was built. So when we have dispatched this first canard, we learn from other conservatives that it is the sub-prime people who are to blame; that by taking out loans they couldn't possibly pay off, these undesirable borrowers have ruined us all.
There is no way to measure the number of people who took out mortgages they knew they couldn't afford, of course, but for what it's worth, a 2007 report by the Mortgage Bankers Association reports that the FBI estimates "80 percent of all reported fraud losses arise from fraud for profit schemes that involve industry insiders." That means the lenders, not the borrowers.
[...] [read in full at link above]