I am researching the possibility
that there might be a securities violation that could inure to YOUR benefit
(not just the buyers of CDOs). You see there are several breaches that occu=
rred
here all stemming from the fact that the market was artificially inflated. =
The
scheme most closely resembles a Ponzi scheme and so it smacks of breach of
fiduciary duty, lack of TILA disclosures, AND the sale of a security (which
means failure to provide a prospectus, right of rescission, and other eleme=
nts
of registering or offering securities for sale of a security). remember that rescission rights, no matter what you ma=
y hear
to the contrary, could extend to many years. Most people don’t know
that.
And in securities litigation,
failure to provide a prospectus disclosing everything including your rescis=
sion
rights, risk factors and how the deal is actually working, including use of
proceeds, rights can extend far into the future with the statute of limitat=
ions
running not from the date of the transaction, which sometimes happens, but =
more
often from the date you discovered that you defrauded and how you were
defrauded.
The security in this case was the
note and mortgage. You were encouraged by all the predatory participants to
believe that the house was worth a certain amount of money (i.e., that fair
market value was as stated), that you could sit back and watch it go up fur=
ther
without any action on your part, and without any knowledge on your part that
the scheme would only work for YOU if they could continue to artificially
inflate the apparent fair market values in the housing market. That way, you
were told, you could either refinance and get money out of the deal or sell=
and
get money out of the deal, all without any risk at all, or so it seemed. Th=
is
then is a passive investment promising a return based upon the offering and=
the
“work” of the offeror.
All of these legal theories over=
lap,
along with fraud in the inducement, fraud in the execution, failure to disc=
lose
under SEC rules, and violations of the various banking regulations which
require a lender to do due diligence. In this case the lender did no due
diligence (hence the proliferation of “no doc Loans) because they kne=
w in
advance that they were not assuming the risk of loss in the event of
default.
If you have a mind to do so I wo=
uld
encourage you to read the 10k and other filings of Countrywide Financial
Corporation and you will see that they were selling the CDOs with a return =
of
8%, which of course is higher than any mortgage rate they were getting. The
proceeds from the sale of the securities were allowed to be used for
operational expenses INCLUDING service of the debt. Right there in black and
white and signed by the executive of the company itself in full disclosure =
to
avoid jail, is an admission of a Ponzi scheme —- which by definition =
is a
scheme in which a greater fool down the line puts in money which is then us=
ed
to profit the Ponzi operator and to pay prior “investors” until=
the
money runs out.
So I would start with someone th=
at
can audit your closing documents from a TILA (Truth in Lending Act). Second=
I
would look up some securities lawyers that really know their stuff, and who
might be willing to take this on a contingency. And I would look up the cla=
ss
action lawyers in your neighborhood and have a talk with them. I am certain
they will be very interested. Also go see and pester your local City Attorn=
ey
and County Attorney and State Attorney would be very interested in this bec=
ause
they are ALL (1) under pressure to get relief for the government agency or =
unit
and (2) understaffed and not very knowledgeable about the terms of relief t=
hat
are available. They need help and you through your connection with me and <=
span
class=3DGramE>others, can provide it. You can give them our emails s=
o they
can be brought up to speed. I can serve as adviser, expert or whatever.&nbs=
p;
Here are some of the possible
objectives that could be set without regard to any evaluation of the likeli=
hood
of success in your situation or any other:
1. Rescission and damages: trick=
y to
get both, but the theory would be that you were deprived of the money you
spent, you were deprived of the benefit of the bargain, and you lost money =
just
by moving in and reasonably relying on what appeared to be the due diligenc=
e of
the lender, appraiser, underwriter, etc., none of whom was doing the normal=
due
diligence because there was no actual risk to them — including the fa=
ct
that they they all could express plausible
deniability. What they didn’t figure on, because they were too
short-sighted, was the sudden implosion. So the plausible deniability defen=
se
is gone, a casualty of sheer volume. No lender, appraiser, or underwriter c=
an
expect to pass the giggle test when they go out and value a house at $250,0=
00
one week and then $275,000 the following week, and then $335,000 the next m=
onth
without wondering whether these prices are a real.
2. Reduction of mortgage balance=
to
reflect inflated values. So if your mortgage is $225,000 and the house is n=
ow
showing a fair market value of $185,000, you should get a $40,000 reduction=
in
the principal due on your mortgage.
3. Reduction in the interest rat=
e,
and getting fixed rate.
4. Reduction of payments without
negative amortization.
5. Refund of loan origination co=
sts
or reduction of mortgage further for those amounts.
6. Refund the down payment you m=
ade
or reduction of the balance further for that amount.
7. Payment of compensatory damag=
es
8. Payment of Attorney Fees
9. Payment of treble damages und=
er
applicable RICO and similar acts.
10. Payment of punitive damages =
for
bad behavior.
11. Payment of exemplary damages=
to
serve as an example to others who might engage in the same wrongful behavio=
r.
12. Settlement (where both parti=
es
release each other from claims made in litigation) MIGHT include a provision
for reduction of your mortgage balance and reduction of your payments; this
could be tied to an agreement wherein over the years if you are able to
refinance or sell the house for more than the amount of the reduced mortgag=
e, the
lender can participate as an equity partner in the house. If worded properl=
y,
this would enable the lender, the investment banking operations and the own=
ers
of CDOs to restore the value (all or some) to their balance sheets, thus
getting them out of trouble with regulatory authorities in terms of the
viability as a continuing business. If such settlements occur on a widespre=
ad
basis, the housing market will stabilize more quickly and after it stabiliz=
es,
the prospects for an earlier recovery are correspondingly enhanced. If real
estate values recover, then tax revenues to government will stabilize
proportionately and also recover. If people are kept in their homes, the
prospect of ghost villages virtually vanishes.
13. With the causes of action for
SEC violations, fraud and breach of fiduciary duties involved, there is not=
hing
to stop people who have already been evicted from their homes from bringing
these suits and settling with the added factor of taking that vacant house,
putting them back in it, with a little money in their pocket so they can ri=
ght
themselves and go on with their lives.
We are not being so presumptuous=
to
say that we have the key to put ALL the toothpaste back in the tube. Howeve=
r,
this approach takes into account the needs of the economy as a
whole as well as individual victims and the perpetrators whose downf=
all
might simply hurt more people.
I know this is a nasty business.=
But
it is business. Don’t get mad, get even. And don’t get even, get
ahead. When you discuss this with others leave out the moralizing, and pres=
ent
the “conspiracy” in a calm, deliberate and organized way. Remem=
ber
that lawyers are busy and some are lazy. You need to get to the meat of the
situation quickly to interest them and what you want is someone to take thi=
s on
a contingency.
Posted =
in SEC<=
/a>, Securities Act of 1933, TI=
LA, civil procedure, currency,
economics, economy,
evictions, =
faith,
foreclosures, movement,
obama |
Tags: damages, exemplary damages,=
punitive damages, rescission, RICO, SEC, Securities Act of=
1933,
treble damages
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