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Borrowers lost out to banks, suits say

Homeowners should have seen their properties sold for higher prices, according to the plaintiffs' court filings

By Ken Kobayashi

LAST UPDATED: 10:52 a.m. HST, Aug 07, 2012

Hundreds of Hawaii residents should have received higher prices for their properties sold through nonjudicial foreclosure auctions during the past four years, according to lawsuits recently filed on behalf of borrowers who allege unfair and deceptive practices by four major banks.

A fifth lawsuit alleges that a Washington law firm, Routh Crabtree Olsen (RCO), and others that assisted in the auctions committed multiple violations of the state nonjudicial foreclosure laws during those years and interfered with the residents getting the highest price for their properties.


Hawaii's nonjudicial foreclosure law leaves the foreclosure process in chaos, with many cases halted.

A lawmaker wants to revisit the foreclosure law to change the rules on publishing public foreclosure notices.

The amount of losses for the residents in the five suits totals in the millions of dollars, their lawyers said.

The lawsuits are fallouts from the state nonjudicial foreclosure system aimed at allowing lenders a quicker, less costly alternative to foreclosures handled by state courts.

The suits against the banks, however, allege a widespread practice that they advertised and conducted nonjudicial foreclosure auctions for quitclaim deeds but provided the winning bidders more valuable limited warranty deeds. The banks allegedly advertised auctions for quitclaim deeds, which means the properties are sold "as is" and clear title is not guaranteed. The winning bidders, however, received limited warranty deeds, which are considered more valuable and help ensure fee-simple title, according to the suits.

The practice of advertising quitclaim auctions discouraged bidders, lowered the amount of winning bids and left the borrowers with higher deficits, the suits said.

"Shame on them," said Barabara-Ann Delizo-Lima, whose Pearl City high-rise apartment went through a nonjudicial foreclosure auction in 2009. "We could have been in a better place if they did their job."

Her lawyers estimate she and her husband would have gotten at least $50,000 more if the sale had been for a limited warranty deed.

"It's like they came to my house and took money away from my wallet," husband Lionel Lima Jr. said.

The couple are the named plaintiffs in a lawsuit against Deutsche Bank National Trust Co. It seeks certification as a class action suit to represent hundreds of other borrowers whose property went through nonjudicial foreclosure by the bank.

Three similar lawsuits were filed against Bank of America, U.S. Bank N.A. and Wells Fargo Bank N.A.

The fifth suit alleges RCO and other defendants who assisted in the auctions also violated the unfair and deceptive practices law as well as the nonjudicial foreclosure law.

RCO is a professional service corporation in Washington state and with offices in Hawaii, Alaska and other Western states. The others named in the suit are RCO-Hawaii LLLC, Foreclosure Expeditors/Initiators LLC and Stephen Routh, a shareholder of RCO and a member manager of Foreclosure Expeditors. RCO-Hawaii successfully lobbied the Hawaii state Legislature this year to loosen Hawaii's foreclosure notice publication requirements.

John Perkin, a Honolulu lawyer representing the residents in the RCO lawsuit, called the practices by RCO and its civil co-defendants "outrageous."

"They came here as robotroops for these big mainland lenders and proceeded this wholesale violation of our Hawaii statutes," he said.

The suit alleges RCO and the others violated the state nonjudicial foreclosure law when they:

» Did not publicly announce postponements of auctions.
» Did not use licensed attorneys to conduct the auctions.
» Filed false affidavits about the transactions.
» Delivered the limited warranty deeds in violation of the notices that the sale would be for the properties "as is."

The companies' actions, the suit said, were "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers, (many) of whom were divested of record title to real property as a consequence of defendants' conduct."

Routh violated the state law by formulating and implementing the practices and policies of the defendants, the suit alleges.

Routh, a lawyer admitted to the Alaska and California bar associations, is a founding partner of the RCO and a 1972 graduate of the University of Hawaii, according to the law firm's website.

He and the others named in the suit did not respond to requests for comment.

The suit seeks class action status for the estimated 700 to 800 residents whose nonjudicial foreclosures were assisted by RCO and the co-defendants.

Perkin said the losses for each runs into the thousands of dollars and, in some cases, tens of thousands of dollars.

"Every one of them has been damaged," he said.

In the four lawsuits against the banks, the plaintiffs seek to represent close to 3,000 borrowers whose properties went through the nonjudicial foreclosures.

The suits allege the banks violated their duties to get the best possible price for the properties and should have auctioned limited warranty deeds.

An advertisement for a quitclaim deeds "dooms the sale," said James Bickerton, an attorney for several plaintiffs. "It drives the price down."

The advertisements, the suits said, "had the foreseeable effect of discouraging potential buyers and caused the auction prices to be lower than they would have been if the sales had been advertised as conveying the interest in the property that (plaintiffs) had pledged with the mortgage, i.e., with at least a warranty deed."

Two of the banks essentially said they were not involved with the foreclosures.

Teri Charest, a spokeswoman for U.S. Bank, said the bank was the trustee and that the conduct in the lawsuit relates "entirely to foreclosures."

"Although foreclosures are commonly brought in the name of a trustee for legal reasons, the trustee is not involved in initiating or managing foreclosure activity," she said.

"Loan servicers are solely responsible for all loan-servicing activities, including conduct relating to foreclosures and subsequently the sale of foreclosed property on behalf of the trust."

Wells Fargo communications manager Elise Wilkinson said the bank acts as a trustee for residental mortgage backed securities, or RMBS. She said Wells Fargo "has no contractual responsibility for the servicing of the individual mortgage loans included in the RMBS trust or for enforcement or foreclosure proceedings."

"The RMBS trustee does not direct the loan servicer's actions in connection with the servicing of the mortgage loans."

The other banks did not respond to requests for comment.

In the lawsuits against the banks, the borrowers were entitled to the best price when the banks chose to avoid the judicial foreclosure process, Bickerton said.

He said the price for a limited warranty deed on average would be 5 to 10 percent higher than a quitclaim deed, although in some cases it could be even higher.

For Barbara-Ann Delizo-Lima and Lionel Lima Jr., the amount is at least $50,000, Bickerton said.

The couple purchased a one-bedroom apartment at Century Park Plaza in 2005 for $169,000 and obtained a second mortage of $42,400.

Lionel, a 47-year-old maintenance supervisor, has been out of work since 2003 because of a disabling injury, and his 41-year-old wife has been plagued by a work-related neck injury that also left her disabled from her administrative assistant job.

They fell behind in payments and started to move out when they came home in late May 2009 and found the locks had been changed and they couldn't get into the apartment. They have been unable to recover furniture and personal belongings, such as photographs, documents and clothes, the couple said.

The winning bid for the quitclaim deed was $129,000, but Deutsche Bank gave the winning bidder a limited warranty deed, according to Bickerton. The winner, a known buyer of foreclosed properties, sold the apartment within four months for $197,000, Bickerton said.

The bank forgave the deficiency on the mortgage, but that resulted in the couple owing $14,000 in federal taxes, the couple said.

They still are faced with paying off the second mortage, they said.

"We could have paid off some bills," Lionel said. "We wouldn't be in debt. It hurts."

The two are still disabled, and they and their three children, ages 4 to 19, live with Barbara-Ann's parents in Ewa Beach.

"Everybody got money off other people's pain," Barbara-Ann said.

The five lawsuits are limited to nonjudicial foreclosure sales dating four years from the filing of the complaints from May to July because of the four-year statute of limitations.

The five suits seek millions of dollars in damages, which, if the residents prevail, would be tripled under the state's unfair and deceptive practices law.

The residents are represented by three teams of lawyers: Perkin and Brandee Faria; Bickerton and Stanley Roehrig; and Raymond Cho and Van-Alan Shima.


Five lawsuits seeking class action status allege unfair or deceptive trade practices by four banks and companies that assisted in the nonjudicial foreclosure auctions.
The suits seek to represent all those with similar claims to the named plaintiffs.


Ilar v. Routh Crabtree Olsen P.S. (RCO); RCO Hawaii LLLC; Foreclosure Expeditors/Initiators LLC, a Washington company, and Stephen Routh


Gloria Macadangdang Ilar purchased a Waipahu home in 2006 with a mortgage of $680,000. U.S. Bank moved to foreclose in 2010. RCO, counsel for U.S. Bank, filed a notice that the auction would be for property "as is" on April 7, 2010.

But the auction was postponed.

Foreclosure Expeditors/Initiators, which was given the responsibility of announcing postponements, did not do so. The auction was held April 7, 2011. Lava Rock Properties LLC was the high bidder at $465,000.

No licensed attorney from RCO or RCO Hawaii conducted the auction. A nonattorney from FEI is believed to have conducted the auction. An attorney with RCO filed an affidavit with the Bureau of Conveyances saying the winning bidder received a quitclaim deed. But U.S. Bank gave a limited warranty deed to Lava Rock. Suit filed May 30.


Degamo v. Bank of America N.A., successor to BAC Home Loans Servicing


Milagros Junan Degamo purchased property in Waipahu with a $550,400 mortage in 2007. At the nonjudicial foreclosure auction for the property "as is," BAC was the high bidder with a credit bid of $612,922.

Degamo was left with a second mortage on the property owing more than $100,000. If the property was sold at market price, Degamo's debt would have been reduced or eliminated by additional proceeds. More than 1,000 owners were subjected to nonjudicial foreclosure proceedings by BAC since 2008. Suit filed June 8.


Gibo v. U. S. Bank National Association, also known as U.S. Bank N.A.:


Evelyn Jane Gibo obtained a mortgage for $400,792 for an Ewa Beach residence in 2005 U.S. Bank moved to foreclose and sell the property "as is" or with a quitclaim deed.

A couple submitted the high bid of $326,772. Gibo had a second mortgage of more than $100,000, which is still outstanding. More than 600 owners of Hawaii property have been subjected to nonjudicial foreclosure by U.S. Bank since 2008. Suit filed June 18.


Lima v. Deutsche Bank National Trust Co.


Lionel Lima Jr. and Barbara-Ann Delizo-Lima purchased their Pearl City apartment with a $169,000 mortgage. They also took out a second mortage of $42,500. Deutsche moved to foreclose and advertised that the property would be sold by a quitclaim deed. At the auction the successful bidder bid $129,000.

Deutsche gave the bidder a limited warranty deed. The bidder sold the apartment for $197,000 within four months. More than 700 owners were subjected to nonjudicial foreclosure by Deutsche since 2008. Suit filed June 4.


Bald v. Wells Fargo Bank


David Emory Bald and his wife, Susan, obtained a mortage in 2007 for Honolulu property at Iwaho Place for $535,000. The mortage was assigned by Wells Fargo in 2008.

At the nonjudicial foreclosure auction in 2009, Wells Fargo submitted the high bid for $372,000. Wells Fargo executed a quitclaim deed and later sold the property through a limited warranty deed for $399,000. More than 500 owners of Hawaii property have been subjected to nonjudicial foreclosure by Wells Fargo since 2008. Suit filed July 23.

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ejkorvette wrote:
WOW, Is that Legal? What will become of the people that lost their House? This Is Terrible!!!
on August 7,2012 | 02:48AM
Grimbold wrote:
Borrowers lost out to banks, suits say. The opposit is true: The banks lost money to borrowers who broke their promise to pay their mortgages.
on August 7,2012 | 05:24AM
bender wrote:
The banks got theirs.
on August 7,2012 | 05:41AM
cojef wrote:
The Banks got stimulus money and many have not repaid the Governmenty yet, and may never do. Ironic that banks get bailed out and mortgage debtors get foreclosed. No justice for living being, and a corporation gets a second chance. Go figure! It's a cruel and heartless world. My heart goes out to dispossessed.
on August 7,2012 | 10:07AM
tiki886 wrote:
Most, if not all of the biggest banks have repaid the US Treasury. The only outstanding TARP funds is with an insurance company, AIG and hundreds of smaller banks. Even Central Pacific Bank repaid uncle Danny's bailout funds.

However, Government Motors is still in trouble and still not able to repay the Treasury. Even its formerly owner piggy bank, Ally Bank fka General Motors Acceptance Corp (GMAC) owes TARP funds.

on August 7,2012 | 11:58AM
peanutgallery wrote:
Enough already. When borrowers take advantage of lenders and stop paying; they lose their stuff. It's the reason the rest of us pay so dearly. This reminds me of prison guidlines. They have been progressively altered to favor inmates for years. It needs to stop. You break the law, or stop paying your loan; deal with it. The rest of us are tired of dealing with the fallout from corupt politicians.
on August 7,2012 | 06:47AM
bobbob wrote:
I think they'll win the suits in the end. Advertising quitclaim deeds but provided the winning bidders limited warranty deeds is a sham. If a buyer saw a sale for a property with a quitclaim deed, he'd not want to bid very high for it. Of course if buyers "in the know" knows they'll get a limited warranty deed, they'll have more confidence to bid higher and win the auction.
on August 7,2012 | 09:28AM
tiki886 wrote:
I believe the difference between a 'quit claim' and a 'limited warranty deed' is the former owner under a 'quitclaim deed' has one year to reclaim their home if they come up with the cash in full to repay the original loan. It is unlikely that that would ever happen but as a buyer of the auctioned property, I would not want that remote possibility hanging over my head. I want guaranty of title.

Should this suit prevail, which I doubt, not only would the lender be on the hook but the title company who insures clear title with title insurance would also have a big claim to settle.

on August 7,2012 | 10:40AM
2ljd wrote:
Incorrect, I believe your explanation refers to a "tax sale" deed wherein the prior owner has a one year right of redemption to reclaim the property from the winning bidder. A quitclaim deed is little more than conveyance from the seller to the buyer saying, "I'm selling you whatever rights I may have in the property." If it turns out that the seller didn't have an interest in the property, then the buyer gets extactly that, nothing.
on August 7,2012 | 12:54PM
bobbob wrote:
^ Exactly. It is exactly as what it sounds like. quit. claim. Prior owner gives up whatever claim they may (or may not) have. There is a huge difference between the two.
on August 7,2012 | 02:39PM
tiki886 wrote:
OK. I didn't know for sure. Thank you. But if the new owner can get title insurance coverage, which was surely required to obtain a new mortgage loan, then it doesn't matter if the new owner has a quit claim deed or a limited warranty deed? The new owner would be compensated in the event of a challenge to title right?
on August 7,2012 | 04:44PM
Grimbold wrote:
Deadbeats rip off the banks by not paying their mortgage, then suing the banks ? The world is upside down !
on August 7,2012 | 03:08AM
Highinthesierras wrote:
Lawyers buy politicians, that is the Hawaiian way.
on August 7,2012 | 05:31AM
KahinuG wrote:
Lorrin Thurston, Wm Owen Smith, Wm Ansel Kinney, George Wilcox... all lawyers, all crooks, drafters of the Bayonet Constitution... none of them Hawaiian.
on August 7,2012 | 06:01AM
Notawannabe wrote:
Well said!
on August 7,2012 | 07:57AM
Lanikaula wrote:
and what do you think when the banks were on the verge of BANKRUPTCY themselves and the PEOPLE's $$$ bailed their arse out?! deadbeats?!! you are one sick puppy! all you know is what you read in this one-sided slant. do you know these people? do you know what their challenges were? how stressful it is to be in this position? did you forget how these CORPORATES were ALL BAILED OUT with probably these/ALL peoples' $$$ and today are doing 'business as usual', but more w/o feelings for their own people. what da hell kind of country is this anyway? "for da people, by the people"...BS!! and that's NOT THE HAWAIIAN WAY!! in this ha'olified society that's the CAPITALISTIC way...the AINOKEA way by the FACIST CAPITALIST!
on August 7,2012 | 06:02AM
saveparadise wrote:
Lani, you have a good heart but the bottom line is if you borrow you gotta pay back. The media has used the term "bailout" but these were loans to banks by the government that have all since been paid back. People have borrowed to live in nice homes then want to walk away when they cannot pay. Nothing seems fair when events do not go your way but life is not a road of perpetual prosperity for all. Everyone is accountable for the situations they have created. These people were not forced to purchase at a time when the sharks were chumming the real estate waters. Anyways, best wishes to them in their law suit.
on August 7,2012 | 08:53AM
poppydog1 wrote:
on August 7,2012 | 12:15PM
cojef wrote:
Read my post above, and further the Banks created the prime-rate-interest loans and created the financial debacle by hedging their bets. I'm not saying it's all the banks fault, but they created the mess by letting unqualified borrowers into purchasing homes. I'm from the "minimum 20% down and 25% of income mortgage payment era, when banks were reluctant to loan funds to the so called unqualified. Not all foreclosed people were unqualified, but are victims of tragic events in their lives that placed them in their plight. Just because we are secure ourselves does not mean I can be smug about others whose property were foreclosed.
on August 7,2012 | 10:18AM
saveparadise wrote:
cojef, The corruption would not have even existed if there were no takers. You can blame others all you want but at the end of the day you need to look in the mirror and ask yourself how did I get here. Having a different opinion does not mean you can be "smug" about holding empathy over accountability.
on August 7,2012 | 10:50AM
onevoice82 wrote:
Yes, tragic things happen to good people, the problem is when the "good" people look for a scapegoat. Suck it up good people and do whats right. Hand the keys to the bank.
on August 7,2012 | 07:23PM
ejkorvette wrote:
Wow, is this Legal? Taking someone's house away from them, without their Knowledge? This needs to be investigated thoroughly, because Hawaii is already Unaffordable, when things like this in progress, the Residents will start to protest, maybe Violently!!
on August 7,2012 | 03:48AM
Christopher_murp wrote:
There could be very good reasons why a property sells for $50k more than when it was purchased at a foreclosure auction. Such minor things as new paint, appliances, carpet, and removal of the previous person(s) stuff. Doesn't sound like an outrageous amount of difference, but what would normally occur between a where is/as is versus ready to sell. People need to be more realistic when they purchase property and not borrow more than what they can pay back. If they lose their jobs, then they need to sell the place to recoup what they can before the banks default them.
on August 7,2012 | 04:25AM
whs1966 wrote:
And MItt Romney believes that the the way to improve the economy is to deregulate financial institutions and other large corporations. You bet!
on August 7,2012 | 05:02AM
tiki886 wrote:
What you fail to understand is that "regulation" doesn't always mean to stop or restrain something or someone, in this case financial institutions. Regulation can mean to force to you buy insurance like ObamaCare whether you need it or not. You have no choice. Government stole your freedom to choose.

What the government was doing it the subprime mortgage meltdown was to provide an incentive, a moral hazard to encourage irresponsible behavior to obtain loans to accomplish the goal of some utopian socialist philosophy of everyone having to own their own home whether they could afford it or not.

on August 7,2012 | 05:37PM
Grimbold wrote:
The law in the USA is a scandal against the banks : People can just enter a high risk purchase going into debt to the hilt, hoping to harvest a huge profit if their speculation of rising prices pans out. However if prices go down they can just give the property back and are not responsible for their debt, the debt is wiped out. : The bank eats the huge loss ! In other countries the borrower remains responsible for his debt until it is paid off to the end of his life.That should be the same here !
on August 7,2012 | 05:14AM
Grimbold wrote:
The banks are being short changed by USA law. A borrower can buy property and enter a highly specultive purchase. If the speculation for higher prices do not pan out , he can just walk away and the debt gets wiped out. The bank eats the loss ! In other countries the borrower remains responsible for his debt until paid off. Should be the same here !
on August 7,2012 | 05:19AM
onevoice82 wrote:
Thats right Grimbold! If the banks are stuck with these losses all the time but the banks are never able to share in the profits if you sell your house for more than you bought it for during the life of the loan. It should go both ways if we all believe the banks can eat-it!
on August 7,2012 | 05:45AM
Lanikaula wrote:
that's how much you know...what you think homeowners pay a FORCED MORTGAGE INSURANCE deduction for?!! the BANKS DON'T LOSE ANYTHING otherwise they wouldn't be IN BUSINESS!
on August 7,2012 | 06:08AM
HaoleGuy wrote:
You pay Mortgage Insurance if you have not invested enough money in the property (down payment), there is not sufficient equity within the property, or your credit score is such that you are a greater risk. (Possibly due to past financial issues). I agree with those above. If you read the article, each party to the suit listed took out 2nd mortgages, which added to their debt. Basically, due to the incredible spike in the equity in houses they were able to get large amounts of money and over extended themselves, and now are upset they actually have to pay back some (not all) of the money they borrowed.
on August 7,2012 | 07:23AM
sparkyzane wrote:
And if the purported facts in the cases are ture then the real losers are the banks who held the second mortgages. Sounds like law suit round number two.
on August 7,2012 | 09:08AM
tiki886 wrote:
You are correct. The 1st mortgagee, the lender in "1st position" only wants to recover it's loan amount. Even though the 2nd mortgagee may be a different company, they were agreeable and accommodating to the lender above them in 1st position and signed off on transferring title to the new owner. Without the cooperation of all lien holders which in this case involved a 2nd lender, the foreclosure and sale would never happened. Why would they do that you ask? They are probably already unsecured because their portion of debt is already beyond the value of the property anyway. So they either signed off or were given a token $5,000 for their cooperation.

Companies in 2nd position can sometimes "leverage" their position. Some call it extortion.

on August 7,2012 | 11:24AM
peanutgallery wrote:
If you pay mortgage insurance, you're either an ijut, or your credit rating is so low, you probably shouldn't have qualified in the first place.
on August 7,2012 | 09:49AM
bender wrote:
This really doesn't seem to be in the banks best interest. If they are trying to recover their money then why wouldn't they advertise the auction is such a way that it will attract the best price for the property. A better price means more money recovered.
on August 7,2012 | 05:46AM
saveparadise wrote:
bender, you pose a very interesting and rational question. There could be more to this that may be uncovered. More real estated corruption?
on August 7,2012 | 09:37AM
tiki886 wrote:
Because the lender only cares about recovering their loan amount or as much of it as possible before the value drops even lower. At this point in the transaction it is called minimizing your loses. No one is in a foreclosure to make money.
on August 7,2012 | 11:29AM
tiki886 wrote:
Here's another example. If your property is worth $1 million and you owe the bank $100,000 and you can't make the payment on $100K, the question will be, do you want to sell the property or do you want the bank to sell the property?

If you sell the property on your own, you could walk away with $900,000 in your pocket. The bank only wants $100,000. They are not obligated to sell it at market price. Selling it way below market might invite a lawsuit so to get a quick sale, they might sell it for $700K to $800K. The lesson here is to sell the property yourself if there is equity and don't let the bank sell it through a foreclosure process. Duh!

on August 7,2012 | 12:11PM
bluebowl wrote:
Exactly what my parents preached and never take out a second mortage.
on August 7,2012 | 12:41PM
onevoice82 wrote:
tiki886; your scenario never happens, if people in financial trouble can sell their house and still have equity or even break-even, they do sell it on their own! Said another way, no one looses a house that still has equity.
on August 7,2012 | 07:32PM
onevoice82 wrote:
Because most of the time, the bank already had the property on the market with a real estate company and it did not attract the price it was looking for so they end up putting it up for auction.
on August 7,2012 | 07:28PM
Mythman wrote:
The Obama DOJ is protecting financial criminals, unlike President Clinton, who put over a thousand of them in jail for the real estate scams of that time. The current DOJ has never indicted any financial services firm or individual. What does this tell you. We are all suckers and victims for the Fat Cats and their bought and paid for elected bums.
on August 7,2012 | 06:23AM
peanutgallery wrote:
...but, but, Obama said there wouldn't be any of that kind of stuff in his administration. He promised. He said it with such conviction.
on August 7,2012 | 09:51AM
soundofreason wrote:
"Lionel, a 47-year-old maintenance supervisor, has been out of work since 2003 because of a disabling injury, and his 41-year-old wife has been plagued by a work-related neck injury that also left her disabled from her administrative assistant job.">> So, he was "disabled" BEFORE they qualified to purchase the home. SHE later became "disabled" later from the well known hazards of her admin asst position. Imagine that.

Oh, and with respect to his comment ""It's like they came to my house and took money away from my wallet," husband Lionel Lima Jr. said.>>> I'm going to have say he knows what he's talking about as he was convicted of doing the same thing to others back in the 80's.

on August 7,2012 | 06:54AM
soundofreason wrote:
Just getting tired of these stories where the 1st party didn't do what THEY were supposed to but they expect everybody else to. McDonalds coffee story all over again.
on August 7,2012 | 07:01AM
onevoice82 wrote:
on August 7,2012 | 07:33PM
soundofreason wrote:
Just getting tired of these stories where the 1st party didn't do what THEY were supposed to but they expect everybody else to. McDonalds coffee story all over again.
on August 7,2012 | 07:01AM
Bdpapa wrote:
The only way they didnʻt get true value is if it was sold to a pre determined third party. Otherwise, they got fair value and just did not like it. They had the option of selling it before they got to this point.
on August 7,2012 | 07:08AM
soundofreason wrote:
Let's not forget about that sizeable equity loan they took out too. That money..........?
on August 7,2012 | 07:21AM
Bdpapa wrote:
Inflated equity was one of the major problems in this fallout.
on August 7,2012 | 07:39AM
tiki886 wrote:
It doesn't matter how much equity you have in the property. If you can't make the payments on the existing loan you are in default and foreclosure is the process for the lender to get back as much of the original loan proceeds as possible.
on August 7,2012 | 02:19PM
HD36 wrote:
Remember that the only reason banks loaned money to people who didn't qualifiy in the first place was because the Federal Government gauranteed the loans through Freddie Mac and Fannie Mae. To this day, the government is giving them billions of dollars to keep them afloat.
on August 7,2012 | 09:02AM
tiki886 wrote:
Correct. To prove you are correct you only need ask how did all of this come to an end. Fannie Mae and Freddie Mac said to all banks and lenders, "We are not buying or guarantying any of these loans as of tomorrow." (Sometime in August of 2007) PAU! The next day every bank and lender in the nation said we are not accepting any more subprime loans and those loans in the pipeline were cancelled. See how easy it was?

Fannie Mae and Freddie Mac could have ended the subprime mortgage meltdown at anytime they wanted to. They had the power and control from the very beginning. Government is not the solution. It is the cause of all the problems.

on August 7,2012 | 11:40AM
tiki886 wrote:
Banks and lenders are RISK AVERSE! More important than making a profit, they want to avoid risk. Enter: the government.

A socialist government. Manipulating private enterprise to do what Democrats wanted. Jimmy Carter's Community Reinvestment Act of 1977 (CRA) was to give everyone a home whether they could make the payment or not! To slowly over time make it easier for every American whether they could afford to or not, own a home. That's where the no income, no asset, no down payment, no job verification type of underwriting came into being. Democrats like Maxine Waters, Gregory Meeks, Chris Dodd, Bwarney Fwank, and other Dems threatened banks and lenders into complying with reducing or relaxing their underwriting guidelines and standards 'or else'.

How to make the banks and lenders accept this risk? The Dems promised to GUARANTY these loans with the full faith and credit of the American taxpayer!

The banks said, "Why didn't you say so!" The government, no the Democrats provided the 'moral hazard' to go down the road of financing mismanagement, corruption and financial upheaval.

on August 7,2012 | 05:25PM
LadyNinja wrote:
RCO Legal...............hmmm. Unethical attorneys?
on August 7,2012 | 02:55PM
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