sue the lenders?

[jk]

posted by someone from so. cal. in "askfleck" at bill fleckenstein's website:

Just wanted to contribute to the RE: Bubble Bust data points. Over the weekend, I happened to hear a radio advertisement by a San Diego law firm. They were looking for plaintiffs who had been "inadequately informed" regarding their ARM. The commercial goes on to say that if you have one of these mortgages your principle will most likely be "increasing" every month if you are just paying the minimum--and you probably didn't know that.

[grapejelly]

Re: sue the lenders?

funny you mention this today. In the Washington Post - free registration required:

The sales pitch that came in the mail seemed perfect: A mortgage at 1.95 percent, fixed for five years.




"It sounded like a really good program," Susan Andrews recalled recently.


But after the deal closed, in 2004, the couple realized to their horror that the $191,000 loan they got from Bethesda-based Chevy Chase Bank was an adjustable-rate mortgage. The rate has climbed to 8.3 percent and, because of the way the mortgage is structured, the couple now owe more than they did when they signed for the loan.


They went to court, saying they were deceived. A federal judge has sided with the couple and is allowing a class-action suit involving up to 7,000 borrowers against Chevy Chase.


The bank is appealing, and on Friday, an appeals court granted its motion for an expedited appeal. The bank says the terms were clearly stated in the contract and that if the family has a grievance, it should be taken to the mortgage broker who sent the original sales flier and acted as an intermediary between them and the bank.

The article explains that the couple received truth-in-lending documents but didn't read them. The lender had written "5 year fixed" on the documents, actually "5 year fixed payment" but the "payment" got left out in the photocopying process. The loan was a fixed payment loan with a variable interest negative amortizing payout, but they thought it was a fixed interest rate of 1.95 or something like that. It was too stupid but the judge decided in their favor. It will be appealed.



There were said to be 7000 similar loans. Fodder for the lawyers. And wait until they start suing appraisers.

[Jim Nickerson]

Re: sue the lenders?

posted by someone from so. cal. in "askfleck" at bill fleckenstein's website:

Just wanted to contribute to the RE: Bubble Bust data points. Over the weekend, I happened to hear a radio advertisement by a San Diego law firm. They were looking for plaintiffs who had been "inadequately informed" regarding their ARM. The commercial goes on to say that if you have one of these mortgages your principle will most likely be "increasing" every month if you are just paying the minimum--and you probably didn't know that.

When the lawyers get into righting the wrongs committed by the banks, if the lawyers win, the big winners will be the lawyers (that includes the defendants lawyers). If the banks / mortgage companies settle any claims that ultimately stand, the big winners will be the lawyers. That is the way it is, that is the way it has always been, and that is the way it will always be. The little people/suckers will say as they pocket their pennies, "We showed those banking/mortgage bastards, didn't we?", and the lawyers will say, "Yeah, bozos, you can bet we did" as they take their substantial spoils to the bank.

[DemonD]

Re: sue the lenders?

When the lawyers get into righting the wrongs committed by the banks, if the lawyers win, the big winners will be the lawyers (that includes the defendants lawyers). If the banks / mortgage companies settle any claims that ultimately stand, the big winners will be the lawyers. That is the way it is, that is the way it has always been, and that is the way it will always be. The little people/suckers will say as they pocket their pennies, "We showed those banking/mortgage bastards, didn't we?", and the lawyers will say, "Yeah, bozos, you can bet we did" as they take their substantial spoils to the bank.

Jim, you are right about lawyers. The problem is that lawyers have the most powerful lobby in the world. They make up the majority of lawMAKERS. However, if these lawyers save the a$$es of these people from predatory lenders, save their ability to make a living and not live a life of indentured servitude to horrible loans, then that's fine with me.

It would be nice if the US implemented the "plaintiff pays the defendants cost if they lose" that many european countries have.

[Jim Nickerson]

Re: sue the lenders?

So how are the lawyers for the bozos with the loans for which they were "mislead" into signing on the dotted line going to remedy the situation?

1-Nullify the deal, so that the bozos aren't responsible for paying off the mortgage, bozos move out of house and give it to bank?

2-Make the banks redo the mortgages at rates that will allow the bozos to keep the homes?

3-Sue the mortgage company for damages of some sort + punitive damages (however all that works) then take 40-50% of the amount decided in a court or decided in settlement, and split up all the rest amongst the class plaintiffs?

I don't readily see how the lawyers could make the amounts they wish to make with either of the first two possiblities, and I don't see where the bozos would be helped that much by the third one.

Really how will this work if a class action suit of bozos being mislead by mortgage companies makes it to court?

[grapejelly]

Re: sue the lenders?

So how are the lawyers for the bozos with the loans for which they were "mislead" into signing on the dotted line going to remedy the situation?

1-Nullify the deal, so that the bozos aren't responsible for paying off the mortgage, bozos move out of house and give it to bank?

2-Make the banks redo the mortgages at rates that will allow the bozos to keep the homes?

3-Sue the mortgage company for damages of some sort + punitive damages (however all that works) then take 40-50% of the amount decided in a court or decided in settlement, and split up all the rest amongst the class plaintiffs?

I don't readily see how the lawyers could make the amounts they wish to make with either of the first two possiblities, and I don't see where the bozos would be helped that much by the third one.

Really how will this work if a class action suit of bozos being mislead by mortgage companies makes it to court?

The plaintiffs, if they win, are entitled to getting back their interest and fees, apparently. I'm not sure if they would have to get a new loan or not. But that won't happen.

If this follows the script, the mortgage company will make some sort of worthless gesture such as coupons giving the plaintiffs a partial rebate on future interest to the plaintiffs or good for closing fees on their next loan, and pay tens (or hundreds) of millions in legal fees to the lawyers.

[WDCRob]

Re: sue the lenders?

1-Nullify the deal, so that the bozos aren't responsible for paying off the mortgage, bozos move out of house and give it to bank?

IIRC the article correctly this is exactly what the remedy will be.

[Jim Nickerson]

Re: sue the lenders?

IIRC the article correctly this is exactly what the remedy will be.

If that were to occur, what would then be the effect on the housing market prices? And the effects on the banking/mortgage lending sector?

[DemonD]

Re: sue the lenders?

Jim, the answer there is fairly obvious. Just keep picturing videos of nuclear bombs going off all the time. (neeeeeeeeeeeeeeeeeeer--- psssssssssssssshhhhhhhhhtttt!!!!!!!!!!)