These subprime loans are lemons. Made to fail. Destined for ruin. Defective credit instruments that never should have been sold to the American people. These loans were never meant for long term affordability and these very mortgages are destroying the every fabric of our economy.
A Suffolk Superior Court judge has issued a potential landmark ruling that can potentially halt Massachusetts foreclosures and declaring whole classes of subprime mortgages “structurally unfair” under state law.
“It is both imprudent and unfair to approve mortgage loans that the borrowers cannot reasonably be expected to repay if housing prices were to fall,” Judge Ralph Gants wrote in a preliminary injunction against notorious subprime mortgage lender Fremont Investment and Loan. “Just because we as a society failed earlier to recognize that (many subprime loans) were generally unfair does not mean that we should ignore their tragic consequences and fail now to recognize that unfairness.”
Issuing a ruling in a lawsuit brought by Attorney General Martha Coakley, Gants ordered Fremont to work with state officials for up to 90 days to resolve late-mortgage cases before initiating foreclosure proceedings.
If the two sides fail to settle, Fremont can then foreclose on a home, but must prove it took “reasonable steps” to avoid doing so.
The ruling potentially covers some 3,000 Massachusetts mortgages issued or serviced by Fremont, one of the nation’s largest subprime lenders.
This doesn’t look too good for the home team. Great info Moe, you’ve been mighty busy lately. Really like the new format.
The funny part is Wells still hasn’t marked down most of its portfolio, 30% of which is in California.
So, the loans are junk where it suits them to cover their behinds and limit their exposure, but the loans are fine when it comes to avoiding write-downs and making earnings look good.
I agree Aaron. But sooner or later, they to will have to face the piper and Peter isn’t picking a peck of pickled peppers because Peter Piper picked a pack of “toxic pickled peppers” for which Peter isn’t piping anymore.
In fact, Peter is dead on the floor…………………