--- On Fri, 7/18/08, Per Fagereng <phantom@xxxxxxxxxxx> wrote: > I'm not sure I see the connection. The gist of > Brown's > article is that, if fraud is proven, a mortgage lender has > to take back the mortgaged property at face value, even > though its market value has dropped. > > How does this apply to Pacifica? > > Per Fagereng She cites the impact this has on banks and of its possibly growing role in bank failures. Not long ago, Brian Shiratsuki posted an excerpt from the auditor's report, in which it was pointed out that Pacifica had rather large amounts in accounts exceeding the $100,000 covered by FDIC. How much of amounts in excess of that limit will be recovered by the depositor is uncertain (as is, I think, WHEN it will be recovered) if the bank fails. --Frank LeFever > ----- Original Message ----- > From: "Frank Le Fever" > <fflefever@xxxxxxxxx> > To: "Joseph Wanzala" <wanzala@xxxxxxxxx>; > "Fulcrums of Change" > <fulcrumsofchange@xxxxxxxxxxxxxx>; > "newpacifica" > <NewPacifica@xxxxxxxxxxxxxxx>; "Per > Fagereng" <phantom@xxxxxxxxxxx> > Sent: Friday, July 18, 2008 5:38 PM > Subject: Re: [Fulcrumsofchange] Let the Lawsuits Begin: > Banks Brace for a > Stormof Litigation > > > > --- 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---- > >> > _______________________________