The United States Trustee has filed a second lawsuit against the mortgage lender Countrywide Financial, accusing the company of abusing the bankruptcy process.
In a complaint filed Saturday with the Federal Bankruptcy Court in Miami, the United States Trustee for the Southwest region, Donald Walton, accused Countrywide Home Loans, a unit of the mortgage lender, of wrongly asserting claims related to the property of two Miami borrowers, Jose and Fanny Sanchez, who reorganized their finances in bankruptcy.
The Miami suit comes on the heels of a separate lawsuit in the bankruptcy court in Atlanta also accusing Countrywide of abusing the bankruptcy process.
No Responses
It will be a great day when we can put this little chapter in the history of our economy behind us. I’m not sure I see how liquidity injections accomplish all that much for new lending when there is still so much bad debt in circulation that hasn’t been accounted for yet.
Nonetheless, I guess every little bit does help I suppose and if these measures give consumer confidence a boost than I’m all for it.
Posted on March 15th, 2008 at 12:41 pm
None of these measures addresses the root of the problem which is that greed and wild speculation drove the price of housing to extreme valuations that were not in alignment with peoples ability to pay. Housing costs are reverting to a mean that matches a relationship to salaries. This process has far to go. Bernanke’s trashing of the dollar will only serve to drive long term interest rates up, thus worsening the problem of housing. No amount of legislation will reverse a severely overpriced housing market; the market must correct, and then people who operated under wise principles of debt management will be able to buy at much better prices. People need not fear a recession; it’s the best way to tame and punish (in some cases) wild speculation and reinforce good practices. Recession is a healthy cleaning process. What the Fed is doing to attempt to bail out the market is unhealthy at it’s core. It’s like trying to prevent all forest fires….eventually you grow a really big, unhealthy problem and the whole forest burns down, when a few smaller fires would have kept the system healthy and promoted good practices. Nature provides wolves to keep the herd healthy. The fed is acting against nature, promoting and rewarding Moral Hazard by helping to hide losses and bail out bad apples. This makes things worse. The games need to stop.
Posted on March 15th, 2008 at 1:45 pm
Doug - awesome post and you are exactly right. However, this is an election and desperate politicians will promise/do anything to purchase votes. The long term consequences of their actions mean nothing to them.
Posted on March 16th, 2008 at 10:48 am
In America, we (farmers) ended up killing all the wolves if you can recall. Now environmentalists are trying to reintroduce them in some areas. It’s hard to do nothing - politicians will always vie for votes, after all its an election year - and the inaction bus has already left the station. I’m not a big fan of thrashing the dollar either, but that seems to be the flavor of the day as of late and it has actually been slowly building for quite some time.
Posted on March 16th, 2008 at 2:01 pm
Doug,
I COULD NOT HAVE SAID IT ANY BETTER! I am appalled at the recent Bailout and then Buyout of Bear Stearns by J.P. Morgan Chase. What the media has not made clear is whether JP Morgan immediately repaid the $30 Billion to the Fed! Wonder why this isn’t covered. This calamity has fueled a passion in me to study economics because a mere middle class citizen can not entertain the fallacy that this government is looking out for our interests! They have been co-opted by corporations and foreign governments and investors - AT OUR EXPENSE!
FOR OUR GOVERNMENT NOT TO FORCE THE FINANCIAL INSTITUTIONS WHO MADE THESE DEFAULTED LOANS TO CONTACT EACH AND EVERY HOME OWNER CAUGHT IN THIS MESS AND OFFER THEM A 40-yr. LOW FIXED RATE IS BEYOND ABSURD! FOR OUR GOVERNMENT TO IMMEDIATELY TURN OVER $30 BILLION TO A FINANCIAL INSTITUTION IS MERELY TO COVER THE ASS OF THE WEALTHY. IT DOES NOTHING FOR THE BACKBONE OF THIS COUNTRY - THE WORKING CLASS CITIZEN! IT’S CLEAR BY WHAT’S HAPPENED WHO IS REALLY IN CHARGE THOUGH - THE WORKING CLASS CITIZEN - BECAUSE IF WE DON’T PAY - INVESTORS DON’T GET RICH! POETIC JUSTIC I’D SAY! EXCEPT THESE BOTTOM FEEDERS DON’T RISK THE VERY ROOF OVER THEIR SLUDGE-FILLED HEADS!
WHAT THIS ACTION BY THE FED SAYS IS THAT WALL STREET RULES! IT CAN DO ANYTHING AND NOT PAY ANY PRICE BECAUSE THE FED WILL ALWAYS BE THERE FOR THEM! IT PERPETUATES THE CULTURE OF LAWLESSNESS FOR VAMPIRES LOOKING FOR “BLOOD IN THE STREETS” WHEN CHOOSING AN INVESTMENT, TO ASSURE AN OBSCENE PROFIT! THERE IS ABSOLUTELY NO CONSIDERATION FOR WHO LOST IN THE TRANSACTION OR WHAT THAT MIGHT MEAN! THIS ACTION BY THE FED SAYS IS THAT ITS NUMBER ONE PRIORITY IS THE STRENGTH OF THE ALMIGHTY DOLLAR IN A GLOBAL MARKET - THE PEOPLE WHO TOILED TO BUILD THE STRENGTH WE ONCE NEW BE DAMNED.
IN CONTEXT, the Rev. Jeremiah Wright’s comment about America is directly related to this fiasco and I say he\’e2\’80\’99s absolutely right to condemn America for what our government has allowed it to become!
Posted on March 17th, 2008 at 1:27 am
THIS DRIVEL BOGLES THE MIND. OF COURSE, EVERYTHING THAT COMES OUT OF THIS ADMINISTRATION DOES.
ON THE STATEMENT, “Providing bankruptcy courts the authority to reduce mortgage debts by judicial decree would lead to higher interest rates on future loans, further RATTLE CREDIT MARKETS, and BE UNFAIR TO THE MILLIONS OF HOMEOWNERS WHO HAVE MADE THE HARD SPENDING CHOISE NECESSARY TO PAY THEIR MORTGAGES ON TIME EVERY MONTH. If a bank thinks that judges might step in and write down the value of home loans, they would charge higher interest rates to cover that risk.” NO ONE CLARIFIES THE BOGUS CLAIM OF A CONNECTION BETWEEN JUDICIAL FREEDOM TO REDUCE DEBT CAUSING HIGHER INTEREST RATES! REGULATE THE RATES! !
ON THE STATEMENT, “It does not make any sense to spend billions of dollars buying up homes that are already empty when the goal is to help more Americans keep their homes,” THIS IS, PARDON THE EXPRESSION, A PANT LOAD! THAT IS NOT THE GOAL! THE GOAL IS TO BOLSTER THE FINANCIAL MARKETS TO KEEP THE FINANCIAL MARKETS MAKING MONEY! IN OTHER WORDS, IT IS TO KEEP THE MONEY AT THE TOP! NO TRICKLE DOWN ALLOWED! THIS IS FEEL-GOOD RHETORIC BY MORONIC DRONES WHO BELIEVE THEIR AUDIENCE TO BE ILLITERATE AND JUST IN NEED OF ‘COUNSELING’!
ON THE OBSCENE STATEMENT, “The President remains deeply concerned about the housing issue and strongly believes that any government policies must be responsible,” I CAN BARELY CONTAIN MYSELF THAT THIS ADMINISTRATION HAS ANY NOTION OF THE CONCEPT OF ‘RESPONSIBILITY’ OR ANY INTELLECT FROM WHICH TO SPEAK ON THIS SUBJECT BUT I HAVE TO ADMIT THIS IS WRITTEN LIKE A DIE-HARD REPUBLICANT - ONE OF THE PRESIDENT’S “HANDLERS” PERHAPS!
ON THIS STATEMENT, “All HOPE NOW servicers are contacting subprime adjustable-rate mortgage borrowers 120 days before their interest rate resets. It is important to remember that at-risk borrowers need to do their part and respond to these outreach efforts.” IS BLATANTLY FALSE! MY LAST MORTGAGE PAYMENT WAS MADE IN NOVEMBER, 2006 (coming up on the 15th month of default - NOT BY A SERIES OF CHOICES, BUT BY THE LACK OF CHOICE WHEN FACED WITH PAYING FOR GAS TO GET TO OUR JOBS, UTILITIES, INSURANCE, FOOD, MEDICAL, PRESCRIPTION AND OTHER DELIGHTFUL “CHOICES”). I HAVE NOT HAD A CALL FROM “HOPE NOW.” RIDICULOUS! IN FACT, I JUST RECEIVED A NOTICE FROM AMERICAN SERVICING CORPORATION TO TELL ME OF THE ADJUSTED NEW RATE - AS IF THEY HAVE BEEN RECEIVING THE OBSCENE PAYMENTS THE PREVIOUS 15 MONTHS AND FULLY EXPECT TO RECEIVE EVEN MORE MONEY IN THE COMING MONTHS! IT’S ALMOST COMICAL! THE RIGHT HAND HAS NO IDEA WHAT THE LEFT ONE IS DOING! WHAT HAPPENED TO THE DAY WHEN YOU COULD WALK INTO THE BANK AND SPEAK TO THE GUY WHO GAVE YOU A LOAN ON A ON A FIRST-NAME BASIS??????????????????? WHY NOT FIX THIS! !
DO THE ABSURDITIES EVER CEASE? ON THIS STATEMENT: “Servicers and investors are now providing funds for housing counseling; previously, the Federal Government and foundations were the main sources.” YES, AT 59 YEARS OF AGE, THAT’S JUST WHAT I NEED IS “COUNSELING!” DO YOU KNOW WHAT THE ADMINISTRATION CAN DO WITH THIS INSULTING NOTION?
“The Federal Reserve Has Taken Action To Bolster The Economy” I’LL SAY, $30 BILLION IS A NICE LITTLE NOD.
ON THIS STATEMENT, “Today, with the support of the Treasury Department and the SEC, the Federal Reserve took additional actions to mitigate disruptions to our financial markets. Earlier this week, the Fed announced a major move to ease stress in the credit market by adding liquidity,” WELL, IF THEY WOULD JUST ADD A LITTLE OF THAT LIQUIDITY TO INDIVIDUAL HOMEOWNERS NOW THIS WOULD NOT BE NECESSARY WOULD IT?
ON THIS STATEMENT, “Congress needs to pass legislation to reform the regulation of Government Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae. The statutory mission of the Housing GSEs is to provide liquidity to the secondary mortgage market, and it is vital that they operate safely and soundly. The President has called on Congress to pass legislation that strengthens the independent regulator of the GSEs and ensures they are adequately capitalized and focused on their mission.” THIS PROBABLY MAKES SENSE IN THEORY BUT AGAIN - THERE’LL BE NO TRICKLE DOWN WILL THERE?
Posted on March 17th, 2008 at 2:29 am
Thank you Doug and Laura, I completely agree and I am happy to see your posts. I hope we vote for change in november.
Posted on March 17th, 2008 at 11:23 am
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