Since Karl over at The Market Ticker already did a nice job summarizing the complaint, I wont recreate the wheel…
This is an extremely-important case folks. The pleadings here, like the case in Kentucky, lay the table in terms of the games that were played during the “Rah-Rah” years.
I am going to provide some excerpts via screenshots, and a link to the file containing the entire conformed copy in PDF format. Due to the PDF being protected against changes, SCRIBD will not allow me to upload it – I have asked for a copy without the protection and if I get it, will update this Ticker accordingly.
Uploaded it to SCRIBD so the full complaint can be viewed below…
Let’s start with the “meat” of the alleged violations:
And the first “meaty” part of the complaint….
In other words, Countrywide is alleged to not only have made bad loans, but also to have intentionally inflated appraisals.
Oh, that’s rich. So not only (it is alleged) did Countrywide bamboozle borrowers, they also bamboozled investors.
There’s the base of it all….
Of course there’s the famous “let’s hide Waldo” game once the gig is pretty much up. After all, if we have to produce the documents, well, our goose might be cooked – and that would be bad.
So what else is presented in here? Oh, all sorts of good stuff. Here’s a sampling:
That sounds like a problem to me……
Ding ding ding ding ding ding!
One of the keys to this mess is that the lenders knew full well that the borrowers could not pay “as agreed”, yet made the loans anyway.
You mean basically everything important about the loans, their quality, who they were going to be sold to, why and how was all bogus? And in addition, the price to be sought from investors exceeded the income stream that could be achieved even if nobody defaulted at all?
Heh, that’s a good gig if you can get it – and if you can find a way to do it legally.
Are there some facts behind this? Oh it appears there are…
Oh my. 2004 eh? I seem to remember tAngelo on CNBS making multiple appearances talking about how his company was going to take market share from all these subprime lenders that collapsed, and this was going to be great for his company. Indeed, I remember chortling at the time that I believed he was a lying SOB, and of course the so-called “Fantastic Mainstream Media” lapped it up – and helped support his stock price.
It appears that the intrepid attorneys who filed this action remember that too…. and the pages surrounding 100 in the complaint document a whole bunch of them, including statements in 10Ks and 10Qs that, it is alleged, were flatly false.
And, of course, there’s this one, which I have referred to many times over the last three and a half years:
I distinctly remember the cheesy suits and ties, not to mention the sprayed-on-looking tan.
As I have repeatedly pointed out, the entire intent of these loans was not to be a mortgage at all. It was, I allege, more akin to an asset-stripping scheme where the borrower would be effectively forced to come back to the lender after a couple of years when the teaser expired or the inevitable reset or recast occurred and effectively hand over his accumulated “appreciation” in price through yet more fees to be paid to the “lender.”
I believe that for all intents and purposes, from the lender’s point of view, this was nothing more than renting the house, as passing of a clear title to the buyer was never part of what was contemplated by the lender – but of course the borrower wasn’t told this in advance – or at all.
There’s much more in the complaint, but this will do for a start.
Incidentally, the banks tried to get this removed to Federal Court and kill it, and were rebuffed, so it appears that it’s headed to trial. Plaintiff’s Bar 1, Banksters 0 thus far – I will be providing updates on this case as I become aware of them.
To contact the attorneys involved (if you believe you might have an issue related to this) view the PDF – contact information is found right on the top, including email addresses – use them.