Here are some nice gems from a suit filed in Massachusetts this past Friday July 09, 2010.
(see complaint below) It has two pages of Defendants…
How could of all these investors been defrauded by Wall Street, SHOULDN’T THEY OF KNOWN BETTER?
How could of all these investors been defrauded by Wall Street without the homeowners being defrauded as well?
Everything that was misrepresented to the investor was also misrepresented to the borrower. It was all a lie. It couldn’t of worked any other way!
AGAIN, HOW CAN COURTS GRANT SUMMARY JUDGMENTS AT ALL IN FORECLOSURE CASES HERE IN FLORIDA OR ANYWHERE ELSE FOR THAT MATTER WITH ALL THAT IS NOW KNOWN???
FRAUD ON THE BORROWERS. FRAUD ON THE INVESTORS. AND NOW FRAUD ON THE COURTS!!!
By GRETCHEN MORGENSON
Published: July 9, 2010
Last Friday, an investment management firm that lost $1.2 billion in mortgage securities it bought for clients filed suit in Massachusetts state court against 15 banks, accusing them of abetting a fraud. The firm, Cambridge Place Investment Management of Concord, Mass., purchased $2 billion in mortgage securities from the banks, and it says the banks misrepresented the risks in the underlying loans — both in prospectuses and sales pitches.
The complaint says the banks misled Cambridge Place by maintaining that the mortgages in the securities it bought had met strict underwriting requirements related to the borrowers’ ability to repay the loans. Cambridge also contends it relied on the banks’ claims of having conducted due diligence to verify the quality of the loans bundled into the securities.
The complaint also details the anything-goes lending practices during the subprime mortgage boom.
Interviews in the complaint with 63 confidential witnesses turned up such gems as Fremont Investment & Loan, which had been based in California, approving loans for pizza delivery men with reported monthly incomes of $6,000, and management at Long Beach Mortgage, also in California, directing underwriters to “approve, approve, approve.”
One Long Beach program made loans to self-employed borrowers based on three letters of reference from past employers. A former worker said some letters amounted to “So-and-so cuts my lawn and does a good job,” adding that the company made no attempt to verify the information, the complaint stated.
Such tales are hardly shockers. But they provide important context when Cambridge moves up the ladder to the banks that bundled and sold the loans.
For example, the complaint contended that Credit Suisse, from whom it bought $88 million of mortgage securities in 2005 and 2006, told Cambridge of its “superior” due diligence, including a performance review of every loan. Three-quarters of these loans are delinquent, in default, foreclosure, bankruptcy or repossession, the complaint said.
Bear Stearns, now a unit of JPMorgan Chase, sold Cambridge $65 million of securities. It owned three mortgage lenders and told Cambridge it sampled the loans it sold to check underwriting procedures, borrower documentation and compliance, the complaint said.
Among others named in the suit are Bank of America, Barclays, Citigroup, Countrywide, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS. All of those, as well as Credit Suisse and JPMorgan, declined to comment.
CAMBRIDGE’S lawyers brought its case in Massachusetts under laws barring those who sell securities from making false statements about them or omitting material facts.
Read article in its entirety here…
Read entire fascinating complaint below…