The Four Horsemen

The confirmed and startling rejoinder of this swiftly moving foreclosure current by insurance companies, pension funds, charities, and large scale institutional investors with multi-million and perhaps billion dollar lawsuits against the big banks for damages resulting from the purchase of the mortgage backed bonds and securities is enormous. "Every layer of this onion you peel is rotten,” says Talcott Franklin, a Dallas lawyer who is representing the 129 year old Catholic charitable organization, the Knights of Columbus, and other investors in lawsuits against banks. “It's hard not to feel wronged", a quote from this weekend's Janet Whitman in the New York Post Business article. It is reported that $1 trillion dollars may represent the sum total of product sold and packaged.

Alarming? Certainly so when the consequences and implications trickle down to one of the next tiers affected - our retirees, pensioners, financial advisers, friends and relatives who will be surely asked to absorb the blows of these losses in reduced monthly income, increased premiums and decreased services.

Vacant properties, boarded up homes, underwater mortgages, strategic defaults and decades of real estate market recovery are the visible results of failure when responsible families and business owners are denied the assistance of the Courts during the foreclosure settlement conferences. Yet the opportunities for success are often overlooked in many cases. In our law firm, our new callers and clients are visited by the four horsemen of this new apocalypse - terror, bewilderment, frustration and despair on their initial visits to our office. We encourage the introduction to those and others as they confront the fears of mortgage arrears and foreclosure to learn what the big boys are doing.

On September 2, 2011, in the Federal District Courts for the Southern District of New York, the Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, filed a complaint against one of the largest banks, complaining that its purchase of these residential mortgage backed securities was based upon materially false or misleading statements. Underwriting guidelines, overstated borrowers' income, creditworthiness, owner occupancy and other significant indicia of reliability were dishonestly reported and resulted in the diminished value of the securities. In other words, the risks to Fannie Mae and Freddie Mac when it purchased these securities were far greater than what was represented in the disclosure process.

Surprising? Absolutely not. Talk to the homeowners and business owners who regularly visit with the lawyers and staff at Rubin & Licatesi, PC. For instance, many of our clients relate the advice given to them in the past when it was recommended that a refinance transaction would be the first step to complete their financial recovery considering their home equity and their need for a fast and quick infusion of cash several years ago. Take the money and come back next year for more or for a lower rate or for both! With regrets, tomorrow never came.

There are those who maintain that Fannie Mae and Freddie Mac should have known better that the underwriting standards were questionable. After all, these venerable Washington DC institutions were replete with knowledgeable attorneys, staff members, economists and the like who regularly interacted with federal and state regulators. Notwithstanding, the fallout supports important findings that the default risks inherent in the products which were brought to market and brought to our clients were scaled to fail.

The callers and clients to our law firm, Rubin & Licatesi PC, have little in the way of cushion, assessments or statistics. Our clients are the families who presented willingly and without warning of the benchmarks that would evidence a pre-disposition of a future inability to repay the loan. The model makers knew back then, or perhaps it could be argued that the banks should have known that so many of their loans showed a significantly higher scale of default based upon well recognized principles of financial analysis. This conclusion must be allowed to enter the foreclosure settlement conference solutions and become pressed into use to protect the thousands of residential subprime homeowners who now suffer the indignities of mortgage arrears and mortgage foreclosure.

Terror, bewilderment, frustration & despair -- the Four Horsemen who, when allowed to run with free rein and practice, enable and serve the notorious ends that they seek -- the destruction of families, businesses, neighborhoods and the very values that have made our communities and generations so valuable. For those of our clients who have chosen to abandon the attitude of self-defeatism and are now responsible for action and solution, we use your cases now as the model makers of the future. Our Federal and State courts are now besieged with allegations against your lenders and servicers of employing untrue statements and have engaged and retained law firms to bring their claims to the very hallways and courts which are also open to families and business owners.

Give these actions your interest and time for they are strong advocates of the need to develop solutions in the evolutionary search to stabilize the residential and commercial lending and real estate market. There is truly no more amazing feeling in the world than to abandon the hopeless of the past when served with a mortgage foreclosure lawsuit and to realize that the requirements for success are within your grasp, when you decide to ....KEEP HOME YOUR OWN.