RE: Let the Lawsuits Begin-Banks Brace for a Storm of Litigation

----------------- Bulletin Message -----------------
From: Lori
Date: Jul 14, 2008 10:37 PM


From: Lo
Date: Jul 14, 2008 9:13 PM






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Let the Lawsuits Begin: Banks Brace for a Storm of Litigation

by Ellen Brown

In an article in The San Francisco Chronicle in December 2007, attorney Sean Olender suggested that the real reason for the subprime bailout schemes being proposed by the U.S. Treasury Department was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. The plan then on the table was an interest rate freeze on a limited number of subprime loans. Olender wrote:...

“The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates.



The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process...

Let the Lawsuits Begin: Banks Brace for a Storm of Litigation


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