--- On Fri, 7/18/08, Per Fagereng <phantom@xxxxxxxxxxx> wrote: > I'll be interviewing Ellen Brown on KBOO, Tuesday July > 22 at 10am. Ask her, in view of the auditor's warning, if Pacifica's funds are at risk. --Frank LeFever > > ----- Original Message ----- > From: "Joseph Wanzala" <wanzala@xxxxxxxxx> > To: "Fulcrums of Change" > <fulcrumsofchange@xxxxxxxxxxxxxx>; > "newpacifica" > <NewPacifica@xxxxxxxxxxxxxxx> > Sent: Monday, July 14, 2008 5:28 AM > Subject: [Fulcrumsofchange] Let the Lawsuits Begin: Banks > Brace for a > Stormof Litigation > > > > > http://www.globalresearch.ca/index.php?context=va&aid=9577 > > > > Let the Lawsuits Begin: Banks Brace for a Storm of > Litigation > > > > by Ellen Brown > > > > Global Research, July 13, 2008 > > > > [author's website: www.webofdebt.com/articles] > > > > In an article in The San Francisco Chronicle in > December 2007, > > attorney Sean Olender suggested that the real reason > for the subprime > > bailout schemes being proposed by the U.S. Treasury > Department was not > > to keep strapped borrowers in their homes so much as > to stave off a > > spate of lawsuits against the banks. The plan then on > the table was an > > interest rate freeze on a limited number of subprime > loans. Olender > > wrote: > > > > "The sole goal of the freeze is to prevent owners > of mortgage-backed > > securities, many of them foreigners, from suing U.S. > banks and forcing > > them to buy back worthless mortgage securities at face > value â right > > now almost 10 times their market worth. The ticking > time bomb in the > > U.S. banking system is not resetting subprime mortgage > rates. The real > > problem is the contractual ability of investors in > mortgage bonds to > > require banks to buy back the loans at face value if > there was fraud > > in the origination process. > > > > ". . . The catastrophic consequences of bond > investors forcing > > originators to buy back loans at face value are beyond > the current > > media discussion. The loans at issue dwarf the capital > available at > > the largest U.S. banks combined, and investor lawsuits > would raise > > stunning liability sufficient to cause even the > largest U.S. banks to > > fail, resulting in massive taxpayer-funded bailouts of > Fannie and > > Freddie, and even FDIC . . . . > > > > "What would be prudent and logical is for the > banks that sold this > > toxic waste to buy it back and for a lot of people to > go to prison. If > > they knew about the fraud, they should have to buy the > bonds back."1 > > > > The thought could send a chill through even the most > powerful of > > investment bankers, including Treasury Secretary Henry > Paulson > > himself, who was head of Goldman Sachs during the > heyday of toxic > > subprime paper-writing from 2004 to 2006. Mortgage > fraud has not been > > limited to the representations made to borrowers or on > loan documents > > but is in the design of the banks' "financial > products" themselves. > > Among other design flaws is that securitized mortgage > debt has become > > so complex that ownership of the underlying security > has often been > > lost in the shuffle; and without a legal owner, there > is no one with > > standing to foreclose. That was the procedural problem > prompting > > Federal District Judge Christopher Boyko to rule in > October 2007 that > > Deutsche Bank did not have standing to foreclose on 14 > mortgage loans > > held in trust for a pool of mortgage-backed securities > holders.2 If > > large numbers of defaulting homeowners were to contest > their > > foreclosures on the ground that the plaintiffs lacked > standing to sue, > > trillions of dollars in mortgage-backed securities > (MBS) could be at > > risk. Irate securities holders might then respond with > litigation that > > could indeed threaten the existence of the banking > Goliaths. > > > > -----snip---- > > _______________________________