Livinglies's Weblog

THE BOTTOM LINE: YOU HAVE RIGHTS AND YOU SHOULD EXERCISE THEM. DON’T TAKE THIS NONSENSE LYING DOWN. GO TO YOUR ATTORNEY GENERAL OR WHATEVER AGENCY PROTECTS CONSUMER RIGHTS AND LET THEM BATTLE IT OUT. GO TO THE BANKING COMMISSION IN YOUR STATE AND LET THEM BATTLE IT OUT.

THAT MERELY MEANS BORROWING FROM THE WORDS USED IN THIS BLOG AND WRITING A LETTER TO THOSE ADMINISTRATIVE AGENCIES DEMANDING ACTION. 

It seems that the lenders who were involved in the second tier of home mortgage finance (home equity loans) reserved to themselves some protections that nobody else received. They are sending letters out to everyone telling them the balance of their home equity line has been frozen and that no more money is available from the “equity” in their house. Of course this is because the equity never was there, only the illusion.

• These lenders collected fees, points, costs and interest for  the full amount.
• They now are using their “legal” right to freeze the equity line, without any refund of the fees, points, costs or interest paid by the borrower.
• This amounts to an undisclosed increase in the cost of the loan under the Truth in Lending Act (TILA)  entitling the borrower to challenge the freeze, demand a refund of the fees, points, costs, and/or interest, and perhaps demand rescission of the home equity loan.
• The borrower might be able to force the lender to complete its commitment on the home equity loan because of violations of TILA.
• Borrowers who were planning to use this available source of cash are now damaged because in reliance on the appraisal and underwriting of the lender, they bought or refinanced a house under terms that were all based upon a false presumption: the fair market value of the house, which was inflated under a tacit agreement (conspiracy to defraud) the American public in general and you, the borrower in particular. 
• This adds to the the potential causes of action against the primary lender as well: all the lenders and closing participants, including the auditor of the lenders, knew full well that you were relying on the appraisal, relying on the underwriting of the first and second mortgage lenders (i.e., the fact that they were taking a risk) only to realize, sometimes in as little as a few days, that market conditions did not support the value placed on the home.
• Nor did actual market conditions support the false premises of closing and signing on your mortgages and notes.
• Of many undisclosed facts, there was no risk to either lender because they knew when you closed that they were selling or had sold the the risk to an investment banking aggregator who was in turn selling derivative securities (collateralized mortgage obligations) to unsuspecting investors, thus deceiving and defrauding both the borrowers at one end and the buyers of the securities on the other hand, with all the middle men collecting fees and costs without risk.
• Had you known that everyone at the closing had a direct financial incentive for you to sign the documents and that none of them were taking any risk or had performed any independent analysis of fair market value, and that appraisers were given either tacit or overt encouragement to appraise slightly higher than the deal, regardless of the fundamentals of fair market value is doubtful that you or anyone else would have signed such a deal. 
• The entire scheme, taken collectively, was a fraud upon the entire economy which resulted in a systemic increase in apparent money supply forcing the legitimate sources of money supply to “make good” on these ornate methods of money creation. 
• All that means the value of the dollar was decreased at the same time that the housing prices were falsely and deceptively increased thus putting you the borrower, your city, your county and your state behind an 8-ball that none of you knew existed until it was too late. 
• Like all Ponzi schemes, the system collapsed causing widespread losses which have negatively impacted you economically.
• You in turn relied upon the availability of the home equity line that was promised, and shortly after securing it, you are told, in classic bait and switch, deceptive practice that the value used in your closing which you thought was accurate is too low to support the continued funding of your home equity loan. 

Filed under: bubble, CDO, currency, Eviction, foreclosure, GTC | Honor, inflation, Investor, Mortgage, politics | Tagged: costs, fees, interest, money, points, TILA |