ING Bank files mortgage racketeering lawsuit in Seattle -- !!!

[grasswire]

My jaw dropped when I read this. The implications are staggering.

From the Associated Press, in my local print newspaper:

"The nation's second-largest thrift has filed a federal racketeering lawsuit in Seattle, accusing a state escrow agent, mortgage broker and 10 couples of a home mortgage conspiracy to bilk the bank out of at least $6 million.

ING Bank, an arm of the Netherlands-based ING Groep NV, also seeks a court order to foreclose on eight properties in King, Snohomish, Pierce and Grant counties in Washington, claiming that the borrowers made false statements in their loan applications and failed to make interest-only, adjustable rate mortgage payments on time.

Some borrowers received $1,500 to $12,500 in cash from the loan proceeds, court documents filed by the bank show.

According to the lawsuit, the defendants misrepresented borrowers' assets, income and employment on the purchase or refinancing of properties for which the value was overstated in at least nine loans between November 2007 and June 2008. The loans were intended to be sold to investors, and the bank discovered the problems only after borrowers began missing payments, ING's lawyers wrote.

(snip)

Legal experts said the case may be one of the first in which a U.S. bank, unable to recoup losses by selling loans or the collateral properties, uses the racketeering law to seek money from borrowers and real estate professionals who arranged a home purchase."

[moundsview]

1. I hope that this is just the first of many

I've been in the Real Estate business for many years and still can't believe some of the crap that went on.

[terisan]

2. Looks like a good beginning. nt

[Lasher]

3. This could be big.

Most of the time the banks were able to "...recoup losses by selling loans or the collateral properties...". How about all those cases where these toxic assets were sold by banks to investment firms (hedge funds, etc) who in turn bundled them and sold them to investors (pension funds, etc)? Will the victimized pension fund managers file racketeering lawsuits against involved mortgage brokers and perhaps hedge fund managers?

[grasswire]

4. yeah, where does this end?

Does everyone who misrepresented their income on a mortgage application get sued by the bank? Did they sign under penalty of law? If so, do criminal statutes apply to all those people?

[aquart]

5. Excuse me, WHO misrepresented the income?

Very very cute, banksters. My experience is with stock traders and not mortgage lenders, but I can say with confidence that the ones misrepresenting income were NOT the clients but the traders in order to justify riskier trades and account churning, and my expectation is that we will find that to be true in the case of mortgage lenders as well.

[sandnsea]

6. It sounds like this was real fraud though

I think there were companies or groups of people who colluded together to get these loans in the last few years. I know a realtor in my very small town who is up to his ears in it and all it will take is one yank on a thread to pull him down. If I had one solid piece of evidence of an appraiser or mortgage broker, I'd surely be the one pulling the thread. I just get disgusted when they start blaming some $40,000 a year couple who were doing just fine until the interest rates tripled on them, even though they made every payment on time. Meantime, these real estate speculators get the best rates and they're the ones who are the fuel to the whole thing. What an ugly mess.

[grasswire]

9. I agree.

Aside from individuals who got loans through lying, there is huge fraud throughout the bubble. Equity skimming, rent skimming, and now this racketeering is exposed.

I suspect that my landlady may have conspired to defraud the lenders of her rental properties. She is in foreclosure on properties and is continuing to collect rent but hasn't paid mortgage payments since September. She has three partners. I suspect there's some kind of racket going on.

[grasswire]

8. apparently, many buyers misrepresented their incomes

This case appears to be a real racket, with appraisers, buyers, and others in conspiracy to suck cash from ING. But we know that many many buyers DID misrepresent their income in order to qualify for the loans that then turned toxic on them. ING isn't after those individuals in this instance, but who can say that banks won't begin to go after those suckers?

The question remains. On a loan application, does a person sign under penalty of law? I don't know.

[sandnsea]

10. No. "Many" buyers did not

Just like only 6% of the subprime loans are the Clinton era low-income loans, despite the Republicans convincing everyone otherwise.

It's the derivative market that is causing all of this. It's the difference between the price of gas at the pump and oil speculation pushing prices sky high. Sometimes they're related, but in recent years it has been oil bubbles pushing those prices no matter how many times people say otherwise.

Too much money going to the "investor class" at the expense of the workers. And now the workers are being blamed for a mortgage crisis that they had very little part in creating. These crappy loans weren't necessary 30 years ago. No reason they were necessary in the last ten years.

[ww2player]

7. At least ING is trying to get to the bottom of it.

The SEC appears to be doing squat in figuring out what parties are responsible for creating bad loans they knew people couldn't afford. But what do you expect from the SEC, they fired one of their own who was trying some politicly connected guys for insider trading. Then they ignore Evidence of Madoffs scam and Stanfords. They totaly ignore the damage done by Counterfiting Naked Short sellers... The SEC IS PART OF THE PROBLEM!!


Watch this video to see how inept the SEC is and how their "look the other way" actions have helped destroy companies and this country.

http://vimeo.com/3722293

[bahrbearian]

11. I just saw Dino Rossi running for a train to Portland with a suit case.