City Sues Subprime lenders.

City Sues Subprime lenders.

money.cnn.com

Likening their actions to those of organized crime syndicates, Cleveland's Mayor is suing 21 major banks and mortgage companies for the roles they played in the sub-prime mortgage crisis that devastated many neighborhoods in the city.

(visit the link for the full news article)

They alledge that by pushing these subprime loans, the companies created a public nuisance and they are seeking compensation for damages such as lost property tax revenue, the cost of demolishing homes left abandoned and the cost of policing neighborhoods devastated by thousands of foreclosures.
There were over 7,000 foreclosures in 2007. Crime has skyrocketed in neighborhoods where boarded houses are plentiful, many of which have been stipped of their aluminum siding as well as their plumbing.

Sounds like a public nuisance to me!! And, I hope someone makes these masterminds pay for their part in it!!
Since well...guess who else it paying for it!! That's right you, and me, as well as every other taxpayer in america who's taxes are helping to bail some of them out!

There's links to two stories, both from cnn below. One is about the city suing, the other is about how the taxpayers are footing some of the bill. Sorry, computers do weird things sometimes, probably because their programmers are weird.

money.cnn.com...

money.cnn.com
(visit the link for the full news article)

[edit on 12-1-2008 by dawnstar]

Very interesting and important story.

I understand there are similar efforts underway in Baltimore and Detroit.

reply to post by dawnstar



to my thinking, the city can only try to have those bankers/lenders
be prosecuted as 'Rackeeters' or something like that ~~ i think its
"King Pin" statute.... (even while these same lenders/brokers were
licensed by the City & State and permitted to provide their product=
bogus loans)


Next, the City is crying in their own spilled milk...
the city collected development fees, building permit fees, inspection fees,
and after the houses were sold they collected property taxes, other assessments while the homes were not yet in default/forclosure.
The city planners are as much at fault for issuing permits and not forseeing the impact of urban density as much as the developers & lenders
& buyers.......
heads should roll, yes... but not just the bankers

Boston is doing the same thing. Watch for more blighted cities to jump on the bandwagon soon. The banks deserve everything they have coming to them in the gray area of subprime mortgages. They are also very cuddly with payday loan ops. Wicked. Agreed Udio, the cities have their share of burden on this matter, it's like a paramedic trying to staunch an arterial bleeder.

[edit on 12-1-2008 by jpm1602]

[edit on 12-1-2008 by jpm1602]

Subprime lending is a nice way of saying Loan Sharking. I hope these mortgage lenders get the crap sued out of them. With 13% to 18% interest on some of these home loans and predatory lending practices that rival even the sleaziest used car dealers, these guys have literally been stealing from the poor to give to the rich and getting away with it for far too long. It's high time America took a real good hard look at the whole concept of Credit and Finance and did something to stop the outright inherent theivery.

Great for the mayor of Cleveland! No mention of the details of the case, but I hope they're being sued under the RICO laws, created for the Mafia and organized-crime syndicates.

Simply put, that's what these "financial institutions" are.

I've also seen that legal challenges to the right of foreclosure are upholding homeowners because the banks securitized the mortgages and sold them in packages on the equities markets. With the titles fractionalized and sold off to investors, judges have ruled the initiating lender has no standing because he can't show title

Pure greed! hope this line of attack becomes more prevalent against these gangsters.

I don't know, but here's the sequence of events as I remember them. Some of yas seem to have lots of time to play on these boards, maybe someone can do a little investigation into it and find out just how well my memory jives with reality. I just can't seem to find the time anymore to spend on stuff like that.

but anywho...

first I think it was bush's great tax cut, ya know the one that overly generous to the wealthy while being a little oh-hum for the rest of us.

Bush then tried to offset the damage to the budget from this by shifting some of the burden onto the states, giving the states less funding for things like medicaid and such.

this overburdened the states and well, they were forced to increase their taxes, which kind of led to some very unhappy constituents.

then, bush began preaching to us about his ownership society and the joys of home ownership. Greenspan piped in to add his praise for the veriable interest rate mortgages along with all the other new "creative" finacing that were beginning to be used. The system was eased so more people could purchase a home.

thus, more people went out to purchase a home. It was a sellers market!! the housing bubble was inflated more, and then more. these mortages were made into a commodity themselves, bundled up and sold to investors...

the values of the real estate went up, so the taxes collected by the local governments also went up, the crisis was turned into an overflow of funds. problem solved!!

or should I say delayed....back to the present. the system it turns out was eased a bit too much, fraud was overlooked, good banking practices was thrown out the window. a select few were able to make small fortunes by flipping houses or flipping the mortages to these house...but well, it turns out that no one seemed to care how long the people who were buying these houses could continue to live in them.

the fed begins pumping billions of dollars into our economy to save their financial institutions, which also leads to the devaluing of our dollar and the inflating of the prices for everything we buy!

and now, even our government is is throwing the taxmoney around like it's candy trying to stabilize the situation....

but....the rich still have their nice tax cuts, and the local governments have thier funding back to keep these federally mandated programs running!!!

ummm......just one question..

wouldn't it had been easier, not to mention less perilous to the economy if the government had been up front to begin with and just said, hey, I'm easing the burden for the rich with these tax credits, and well, the rest of you taxpayers (the middle class) are gonna have to pick up the slack. oh, but ya...you're right....if he had done that, there wouldn't have been such a grand opportunity for that few to make their fortunes and and join the ranks of the rich!!

this was just another case of gov't sponsered fleecing of the american people for the benefit of a small group of wealthy who wanted to add a few new members to their elite group!

ya, your right, not only the heads of the lenders should be rolled!

HA! The Lawyers vs The Bankers. It would be funny if it weren't so tragic. The Bankers own the Law via the US Government. It's been that way since 1913 when the Banking Cartel (Federal Reserve) was given the keys to the country. The name at the very top of that little black book is the US Gov.. Number One recipient of counterfeit funds!

So, sadly all that will happen is that we get to pay lawyers to put these banks in even worse situations, who will then turn around and have our government bail them out. We The People get to pay, pay, pay, and pay some more for the sake of criminals at the top.

Now, when Foreigners start suing over worthless 'Derivitaves' things might get a bit more interesting.

Originally posted by St Udio
reply to post by dawnstar

 

to my thinking, the city can only try to have those bankers/lenders
be prosecuted as 'Rackeeters' or something like that ~~ i think its
"King Pin" statute.... (even while these same lenders/brokers were
licensed by the City & State and permitted to provide their product=
bogus loans)


Next, the City is crying in their own spilled milk...
the city collected development fees, building permit fees, inspection fees,
and after the houses were sold they collected property taxes, other assessments while the homes were not yet in default/forclosure.
The city planners are as much at fault for issuing permits and not forseeing the impact of urban density as much as the developers & lenders
& buyers.......
heads should roll, yes... but not just the bankers

The only heads that should roll IMO are the people in default/foreclosure that signed off on that HUGE stack of paperwork explaining the terms and conditions of their mortgages.

Foreclosure/Defaulting is no the end of the world. These people are going to have to rent for few years unit their credit comes back. This subprime housing thing is nobody fault but those who signed the papers.

[edit on 1/13/2008 by QuasiShaman]

Originally posted by gottago
Great for the mayor of Cleveland! No mention of the details of the case, but I hope they're being sued under the RICO laws, created for the Mafia and organized-crime syndicates.

Simply put, that's what these "financial institutions" are.

I've also seen that legal challenges to the right of foreclosure are upholding homeowners because the banks securitized the mortgages and sold them in packages on the equities markets. With the titles fractionalized and sold off to investors, judges have ruled the initiating lender has no standing because he can't show title

Pure greed! hope this line of attack becomes more prevalent against these gangsters.

No way man! This is why you sit and sign all this paperwork until your hand is numb when you buy a house.

reply to post by QuasiShaman


Borrowers are ultimately responsible for repayment of their debts. However, there is such a thing as predatory lending. Thus, the reason for most of that paperwork you mentioned. The ARM's and Interest Only were just the latest chapter in the Fractional Banking scheme.

If people were just getting schooled in finance then I would agree with you that they made their bed and should lie in it. The problem is that so many people were taken in this way that the lenders themselves are in trouble. Not only them, but Wall Street which bought all that 'securitized' debt. Which is where peoples retirement funds are invested.

Add to that a service dominated economy which requires americans to SPEND (70% GDP) and we could be in a serious situation. Foreclosure is not the end of the world for most people, but they won't be buying a whole lot of stuff in the near future. Home inventories rise and construction companies see the first wave of Unemployment. Without the Tax Revenue cities and states start to get in trouble.... and on......and on.....