... to be lined up
His is case number 2:2007cv01260, at the Los Angeles office of California Central District Court.
It is understandable that homes in the blessed climate of California will always be attractive investments, but the phenomenon of the sub-prime mortgage is one factor has fueled the artificial inflation of property values for over a decade, and now the crash has come.
has provided one, as they prepare the stage for the..
Sub-Prime Tsunami Award Ceremony
March 17, 2007:
In 1998 "Titanic" swept the Oscars. "Subprime Tsunami" can expect
no such honors. Sure, some players may get indictments and be
hustled out of their offices by government suits but it's not the
same. Time to create a special award for subprime talent. Since
the Golden Turkey is taken another name is needed. How about The
Platinum Plunger? Or more simply, The Subbie? Whatever. The name
of the award isn't as important as the ceremony and who gets
what. Picture this:
The show opens with a sizzling number by The Equity Strippers.
Wearing little more than a few licks of paint. Shaking their
booty and singing "Don't cha wish housing sales were hot like
me?" The audience eats it up. M.C. David Lereah of the National
Association of Realtors cracks a few jokes about the girls' curb
appeal and shouts out--
The Envelope Please!
Best Subprime Performance by an Oracle: X Fed Head Alan
Greenspan. A few years ago EZ Money Master Greenspan remarked
on the housing market's "frothiness" and predicted a correction.
Yet he still recommended that borrowers go for Adjustable Rate
Mortgages. Aka ARMS. ARMs start out with low interest rates
(teasers) that balloon later. No problem when the market is
rising. Homeowners can refinance based on appreciation and
speculators can flip before the big bad. But when the market goes
south, so do those options. Borrowers get left holding exploding
ARMs. Much of the Betty bouncing back on subprime lenders and
Wall Street is ARM harm.
Best Subprime Performance by Invisible Hands: A group award
for the Wall Street firms who underwrote and sold the same
mortgage backed securities (MBS) that got rave reviews from
their in-house stock and credit analysts. Bear Stearns and UBS
Securities have already received subpoenas from the office of the
Secretary of the Commonwealth in Massachusetts, but recognition
needs to be wider.
Best Subprime Performance on Consumer Gripe Sites: New Century
Financial Corp. Widely reviled by borrowers as an ultra predatory
shark. Formerly the second largest subprime lender in the nation.
Until a few weeks ago, a Bear Stearns analyst special. Now buried
by defaults, a lack of cash, and a Justice Department probe. New
Century will be missed. Not.
Best Subprime Foreign Investor: The Chinese. Their faith in real
estate inflation unhinged from underlying fundamentals and
eagerness to snap up dubious paper prove communists and
capitalists are on the same page.
Best Subprime Pol: Governor Deval Patrick of Massachusetts.
Governor Patrick was a director on the board of the good ship
Ameriquest for 2 years. He signed off in July as his run for
governor gained steam. Until early 2006 Ameriquest Mortgage was
the nation's number one subprime lender-- with a rep for
predatory lending in minority and low income nabes. Ameriquest's
"associates" in myriad outposts routinely played bait and switch
with interest rates and illegal fees, falsified borrower income
info on mortgage aps, and based loans on inflated appraisals.
Attorney generals in 49 states launched a take down. Ameriquest
ultimately agreed to an financial settlement sans any
acknowledgement of culpability. Deval Patrick served as board
rep to Ameriquest's legal team while the deal was negotiated.
Like many other subprimes, Ameriquest was visibly foundering in
2006. By early 2007 a capital infusion and credit line was
desperately needed. On February 20th, Governor Patrick called
former U.S. Treasury Secretary Robert Rubin, now a top official
at Citigroup. Citigroup, through subsidiaries, does big time
bond work for state agencies and quasi-public authorities in
Massachusetts. On February 28th, Citigroup announced an agreement
to cash and carry Ameriquest. According to the office of Deval
Patrick, the governor didn't ask Rubin to help Ameriquest "he
simply offered himself as a reference". Ameriquest's parent
company is ACC Capital Holdings. Owned by Roland Arnall, a major
financial backer of President Bush. When Bush nominated Arnall as
Ambassador to the Netherlands in 2005, Deval Patrick also offered
himself. Calling Arnall "a man of rectitude". Like Robert Rubin,
Governor Patrick served in the Clinton administration. (As
assistant attorney general in charge of the Justice Department's
civil rights division.) When it comes to subprime bailouts,
political differences go by the board.
Best Subprime Indy: Mortgage Lenders Network USA. Closely held
MLN of Connecticut, a mid-size subprime mortgage lender, captured
the attention of the financial world when it went down in flames
at the opening of 2007. In the months before the crash MLN execs
delivered a series of glowing financial reports from the cockpit.
The crash continues to echo in larger places. On March 13th,
GMAC LLC (the auto and home lender owned by Cerberus Capital
Management and General Motors) reported putting aside $200
million to cover losses to their mortgage unit, ResCap. Stemming
primarily from one lender. According to an MLN cockpit report,
ResCap securitized most of MLN's subprime mortgages until mid
2006. ResCap however, isn't naming names.
Best Subprime Sleeper: Take one case of organized multi-property
subprime mortgage fraud primarily targeting Caribbean immigrants
in the NYC borough of Brooklyn. A scam which according to
indictments, falsely inflated the real estate values of an entire
neighborhood. Throw in several national mortgage lenders now hit
hard by defaults whose loans became MBS. Have the Brooklyn loans
be originated by a ring of real estate crooks from New York and
New Jersey. With one crook the ex-head of a notorious Haitian
death squad active in the early 90's. Toss in the reluctance of
the U.S. Government to deport said death squad guy since 1995,
when an order of deportation was issued. Boffo box office
n'est pas? Yet somehow, the subprime activities and criminal
connections of Emmanuel "Toto" Constant, former leader of the
Front for the Advancement and Progress of Haiti (FRAPH) have
garnered no in-depth reportage in New York or Jersey. Go figure!
Perhaps Toto's April 17th sentencing for grand larceny in Kings
County Supreme Court will gain this sleeper the attention
it deserves.
Best Subprime Couple: Maria Bartiromo of CNBC and Angelo Mozilo,
chief executive of subprime mortgage giant Countrywide Financial.
On March 13th, Bartzilo canoodled on Closing Bell. Maria looked
soulful as Angelo bemoaned the liquidity crisis that will result
if regulators respond to the subprime tsunami with too much
regulation and investors say P.U. to MBS. Angelo acknowledged
that some Countrywide competitors had been "irrational" and it
would be "positive" if they folded. But he also invoked the
little people and their need to ascend the social ladder via
subprime affordable homeownership.
Best Subprime Newspeak: A group award for the entire real estate
industry. Government and free market. Profit and non-profit.
Washington, Wall Street and Main Street. In recognition of their
success in convincing the public that "obtainable" is the same
thing as "affordable". When houses cost less they're affordable.
When lending standards are crap, houses are ultra obtainable.
The increased demand feeds high prices. The crap lending embodied in assorted
"affordability" mortgage products helped inflate the housing
bubble. Which in turn pumped crap lending so buyers, via debt,
could obtain what they increasingly couldn't afford. Real estate
touts swore values would always rise to cover the debt and
ballyhooed "buy now or be forever priced out of home ownership".
Eventually the Ponzi peaked. What went up is becoming affordable.
In light of this failure to control reality by transforming
language perhaps the real estate industry's Newspeak Award should
be reconsidered.
Subprime Coming Attractions: Somewhere along the line, taxpayers
will be tapped. Various law enforcement agencies and financial
think tanks will issue reports re the pervasive participation
of organized crime, domestic and international, in the epidemic of mortgage fraud that
contributed to the subprime crisis. Most of the mainstream press
will give the info the Toto treatment. And the need to rescue
The American Dream of Home Ownership will trump the need to curb illegal
immigration.
Carola Von Hoffmannstahl-Solomonoff
Sources include but are not limited to:
"GMAC Reports Fourth-Quarter Loss at its ResCap Unit," Jody Sheen
and Bradley Keoun, 03/13/07, Bloomberg.com
"Massachusetts subpoenas firms on subprime research," Reuters,
03/13/07
"Subprime tsunami threatens to extend housing downturn," Matt
Carter, Inman News, 03/12/07
"Crisis Looms in Market for Mortgages," Gretchen Morgenson, New
York Times, 03/11/07
"GM could take $1B subprime hit," CNNMoney.com, 03/07/07
"Governor made call on behalf of lender, Troubled Ameriquest
sought infusion of cash," Frank Phillips, Boston Globe, 03/06/07
"'Toto' pleads guilty in real estate fraud," Craig Giammona, Times
Ledger, 02/15/07
The People Of The State Of New York against Louis Sandella,
Michael Sandella, etc. Attorney General Indictment No. 2899/2006
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Copyright (c) 2007 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License.
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