A Shot Across the Bow!

A huge shot was fired across the bow of the Major Banks Friday! A game changing precedent was set in a small claims court in Indio California that may bring the Banks to their knees.  A small lawsuit with a unique plan of action has gotten the attention of one of the Country’s largest Banks and soon the Nation! This lawsuit has done what the Obama Administration and the U.S. Treasury couldn’t do, and that is to get the Banks to process and approve a Loan Modifications is a TIMELY manor! The Bank fearful of the Judges possible ruling agreed prior to trial, to modify their Loan in 30 days. Their Loan Modification had been languishing in the Banks Loss Mitigation department for over 7 months! 

As you know I have been very critical on this Blog of the Making Home Affordable Program (HAMP) and the lack of WILL or AUTHORITY of the Obama Administration to do what is necessary to get the Banks to do what is right! Below is the News release from California Housing Justice and (http://www.lenderrefund.com which explains the dtory in more detail. 

uppitybanker

On Friday, March 26^th, a Superior Court in Indio, California approved a precedent setting loan settlement agreement between a local Rancho Mirage Homeowner (plaintiff) and one of the Country’s largest Mortgage Banks (defendant). This landmark agreement, negotiated between Ira Meltzer of California Housing Justice and the Banks legal department insures a guaranteed completion of the Homeowners loan modification within 30 days. The Plaintiff had previously been denied a Loan Modification from their Bank until they filed a Court Motion with the help of California Housing Justice and Mortgage Debt Solutions of Rancho Mirage (http://www.lenderrefund.com) 

The Bermuda Dunes couples story is like many in California and around the U.S. They had tried unsuccessfully for 7 months to get a Loan Modification with their Bank, only to receive continued delays, lost documents, and repeated requests for the same documents. In frustration they sought expert help, and attended a seminar provided by California Housing Justice. During the seminar they learned of their legal alternatives and a unique plan of action from Attorney Doug Kaye and the expert modification services of Mortgage Debt Solutions. 

After the court victory,  Attorney Doug Kaye, of Rancho Mirage, representing the plaintiff, hailed the agreement and quick Court approval, saying “ It’s important not to single out this one lender that was the first willing to repair years of modification gridlock. Now all mortgage banks working with California homeowners seeking mortgage relief, through California Housing Justice (http://www.lenderrefund.com/) and Mortgage Debt Solutions can follow the terms of this agreement to complete their loan modification in 30 days!”  

Teresa MacNamara, of MDS says, “We may finally have the  Game Changer! After 2 years of frustration and struggling on behalf of homeowner modifications and short sales, with the mortgage banks, we are finally seeing the light at the end of the tunnel.”  

FOR FURTHER INFO.: Alan Sherman (760) 488-2600 or info@desertmortgagerelief.com or visit http://www.lenderrefund.com to get them working for you.

California Housing Justice and Mortgage Debt Solutions are not for profit operations.

Heidi Explains Derivatives?

Easily Understandable Explanation of Derivative Markets

Heidi is the proprietor of a bar in  Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in  Detroit .

By providing her customers’ freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi’s gross sales volume increases massively. A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don’t really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since, Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi’s bar.

Now Do You Understand?

Uppitybanker

Originally Published at Abundanthope.net