Hi, i believe that i saw you visited my site so i got here to go back the
choose?.I’m attempting to to find issues to improve my
site!I assume its adequate to make use of some of your concepts!!
Heya i am for the primary time here. I came across
this board and I in finding It really useful & it helped me out much.
I’m hoping to offer something back and help others like you aided me.
Everyone loves it whenever people come together and share opinions. Great blog, continue the good work!
When someone writes an article he/she retains the idea of a user in his/her mind that how a user can know it. Therefore that’s why this post is great. Thanks!
If you’re already skinny, a standard weight-loss diet isn’t exactly what you need.
This type of diet is the best to eat especially if you
want to burn fat around your waistline. For instance, if you usually sleep at 10 in the evening,
your last food intake must be at seven in the evening.
What’s up mates, how is all, and what you would like to say on the topic of this piece of writing, in my view its truly awesome designed for me.
Hi I am so thrilled I found your webpage, I really found you by mistake, while I was looking on Google
for something else, Anyways I am here now and would just like to say
cheers for a incredible post and a all round entertaining blog (I also love
the theme/design), I don’t have time to browse it all at the moment
but I have bookmarked it and also added in your RSS feeds,
so when I have time I will be back to read a lot more, Please
do keep up the great work.
It is appropriate time to make some plans for the future and it’s time to be happy. I have read this post and if I could I want to suggest you some interesting things or advice. Perhaps you can write next articles referring to this article. I wish to read even more things about it!
This is a good tip especially to those new to the blogosphere.
Simple but very precise information… Thanks for sharing this one.
A must read post!
I’m no longer certain where you are getting your information, however good topic. I must spend some time learning more or working out more. Thanks for great info I used to be in search of this information for my mission.
These are actually great ideas in on the topic of blogging.
You have touched some fastidious points here. Any way keep up wrinting.
Hi, its pleasant article regarding media print, we all understand media is a impressive source of facts.
[…] PREDATORY LENDING EXPOSE: BEAR STEARNS […]
First, most audits are useless. A mortgage/deed of trust is a contract nothing more nothing less. What does a former mortgage broker, real estate agent or loan processor know about contract law, tort law or evidence law-NOTHING! It’s like having a butcher doing an autopsy. Sure the butcher has knives and knows what organs look like, but their not qualified to give an opinion of how the person died.
Most loan audits are “useless” software audits, and done by individuals not qualified in the above stated disciplines.
Second one would NEVER send the results to the bank.
Post your alleged violations, you don’t want a false sense of security, if you really don’t have anything. Notwithstanding there may still be a way to save you.
GOOD IFO! ANY CASE HISTORY IN HAWAII? IF ANY PLEASE FOWARD. MAHALO/THANK YOU! ALOHA!
Thursday, October 12, 2006
“Predatory Structured Finance”: Is it time for a new label within the lexicon of predatory lending?
by Christopher Peterson
Over the past five years commentators in the debate over subprime home mortgage lending have ironed out a standard list of practices and contract terms that serve as warning signs of “predatory lending.” These terms and practices include high interest rates, high fees and closing costs, balloon payments, negative amortization, inflated appraisals, insurance packing, mandatory arbitration, unaffordable loans based on the value of collateral, rushed closings, multiple refinancing, abusive collection, prepayment penalties, and misleading or fraudulent disclosure. This list is both necessary and useful.
However, in a new article entitled “Predatory Structured Finance” (forthcoming in the Cardozo Law Review) I suggest that the concept of predatory lending has nevertheless been cast too narrowly. In today’s subprime mortgage market, originators and brokers quickly assign home loans through a complex and opaque series of transactions involving as many as a dozen different strategically organized companies. Loans are typically transferred into large pools, and then income from those loans is “structured” to appeal to different types of investors.
The article includes a useful illustration (pictured above) of a typical subprime home mortgage securitization structure. This process, usually referred to as securitization, can lower the cost of funds for lenders, allowing them to offer better prices. But, it can also capitalize fly-by-night companies that specialize in fraud, deceptive practices, abusive collections, and other predatory behavior. Some of the institutions that sponsor and administer securitization of mortgage backed securities are complicit in predatory lending. By encouraging, facilitating, and profiting from predatory loans, these financiers have themselves slipped into predation. In addition to transferring liability to the secondary market through assignment based rules (such as the Federal Trade Commission’s holder-notice rule or the Home Ownership and Equity Protection Act’s assignee liability provisions), courts and policy makers should explore common law imputed liability theories such as civil conspiracy, aiding and abetting, and joint venture. Unlike assignee liability rules, these older common law theories can reach architects of predatory structured finance that never actually own predatory loans themselves.
Posted by Christopher Peterson on Thursday, October 12, 2006 at 12:49 PM in Debt Collection, Predatory Lending, Unfair & Deceptive Acts & Practices (UDAP) | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference “Predatory Structured Finance”: Is it time for a new label within the lexicon of predatory lending?:
» International Money Lender from International Money Lender
International hard money lender biker shirt womens womens hair loss lyric hotel yorba white stripes montana vacation package game top web discount international calling lake map wales b [Read More]
Tracked on Monday, November 06, 2006 at 06:47 AM
The simple fact of the matter is that originating lenders (and the brokers who bring borrowers to them) too often do not have to live with the consequences of the loans they originate. If they were to have to take the loss on a predatory loan, they would be less likely to originate such loans in the first place. There is no doubt that the secondary, securitized market enables predatory lending.
But it is also that market which is often the real target of lending scams. (Equity-skimming loans aside.) Many predatory loans cannot be justified under either an income analysis or an asset analysis. The scam is designed by brokers (and originating lenders) to get the money from the lender (or the secondary market). The damage inflicted on the borrower is merely collateral. Why do you rob banks? That’s where the money is.
In predatory lending cases I prosecuted, I obtained the best results when the holder of the loan pursued the origintaing lender, broker, title agent, appraiser, etc., rather than just concentrate on defending against the claims asserted by the borrowers. Further, the loan holder also usually recovered more when it focused on the bad actors, rather than the borrower.
I’m not convinced, however, that a wholesale attack on the secondary market under imputed liability theories will work unless and until you can establish a reasonably high degree of knowledge by the market actors. Yes, some secondary market actors make money on these loans. But it’s a game of hot-potato – the one holding the loan at the end usually gets burned. It’s a tough argument to make that those holders should pay borrowers money in addition to taking a bath on the loan itself.
Posted by: Andrew Engel | Friday, October 13, 2006 at 11:17 AM
Great comment. Thanks for sharing your viewpoint. I agree that the secondary market is frequently vicitmized by predatory origination practices–but not always. Absent legal intervention, a high rate, high fee mortgage induced with fraudulent promises of a lower rate, that nevertheless has a large equity cushion and a prepayment penalty, is very profitable for all the businesses involved. Similarly, abusive servicing practices frequently make loans perform better. It’s true that evidentiary hurdles are higher with imputed liability theories than assignee liability rules. But, the Lehman Brothers case in California, 298 B.R. 652 (C.D. Cal. 2003), and some others point to a potentially promising trend. If assignee liabilty rules (such as those included in many new state predatory lending statutes) succeed in creating higher due diligence incentives for secondary market purchasers at the same time that imputed liability theories create new accountability for abetting predatory behavior, the law just might make some headway on this problem.
Posted by: Christopter Peterson | Friday, October 13, 2006 at 01:45 PM
Now with this article 1.5 years old (at this comment posting) and the sub prime loans crisis in full bloom, I’m curious what the update of this article might be?
Posted by: Bob | Monday, May 12, 2008 at 02:38 AM
my home foreclosed in 08/28/08. before my loan docs had been briefly reviewed, it didn’t take long to find a few items by lender. But I show MERS on my trustee sale notice. and how do i know if saxon mortgage servicing company had right to foreclosed?
Law Offices of
15647 Village Dr
Victorville, Ca 92392
TEL (760) 733-8885; FAX (909)494-4214
Most all foreclosures in California can be set aside. The power of sale by non judicial means is contained in the civil code 2932. In order to be valid the assignment must be recorded California civil code 2932.5. Most all notices of default recorded by the “Sub-Prime” lenders have not recorded an assignment till just before or just after the Trustee’s sale. They rely on the MERS agency agreement to protect them but under California law they are wrong.