50 attorneys general meeting to modify mortgages: have concern as to how to make it "equitable." Suggestion: consider people's "equity."

By Frank Louis

The 50-individual States' Attorneys General have been meeting and discussing our life savings and future economic realities without asking us for our input. However, I am sure they have been consulting with the "professionals" in the field; those who stand to make more commissions from the "solution." From what I understand from the little in the media that has mentioned about this "plan" (on the Columbus Day news while nobody was paying attention) is the overwhelming "concern" they have for insuring that this plan in not "inequitable." Really?

Since 2009 I have been broadcasting on the air and Internet and publishing articles on this very topic. I have some thoughts on this subject that need to be considered in this decision: Was There Money Invested? Were people defrauded?

I hope my readers might seize this opportunity to directly ask their individual States Attorneys General one question: "Have they thought about considering whether or not someone made a down payment or got an unrealistic amount of cash back at closing to put their property "underwater" from day-one?" This not only should be, but also must be, the first consideration in this plan to spend $20 billion more of our tax dollars in a potentially frivolous way. Nothing else!

Contact your State AG Office and let them know they need to look at people's closing documents and property "appraisals" in this process of finding an equitable solution. As banks may be left "off the hook" for these crimes once this plan is implemented, this may be the final chance for American property owners to receive some justice in this fraudulent episode in our nation's history; the "housing crisis."

I have written several articles and there have been hundreds of millions of articles more written on the fraud that swept this industry from the turn of this 21st century. Untold stories more about people getting as much as $50,000 in "cash-back" at closing with no money down, "straw buyers," some returning to "their country" with their "earnings" or never even making one payment. There are people who never made a down payment, whose mortgages were underwater from the day they signed the papers did not loose money, who should not receive modifications, it is that simple.

Story after story have been written about all of the various fraudulent practices by those in banking and real estate "professions" who created this crisis while making hundreds of billions of dollars from our losses. Yet no mention ever of people who actually invested their savings only to have it evaporate overnight while others made profits from these people's losses. Really, no wonder people are picketing Wall Street (a misdirected protest in my opinion but... none-the-less... some good points). Capitalism is designed to make profits from the exchange goods and services, not to sell people a "bill of goods" and defraud them.

Yet, other than this column, never a mention anywhere in the media about people who made down payments of 20% or more (money they worked for and saved) and who had good credit when they entered into that fatal real estate transaction. People whose equity has been stolen by the no money down loans that inflated the market, sending it into turmoil. People left with no other option but to file for bankruptcy and die broke or leave their estates in debt when they go.

The fact that these people's "lost equity" is never considered is "inequitable" if you ask me. I have not heard anyone disagree with that fact yet. Yet, this factor seems to again be overlooked in the search by the "professionals" who are running our economic-ship onto the ground; the bankers, the Fed, the realtors, politicians, ... those folks.

There are also people who made decisions to "cash-out" on their property, take out a home equity loan (perhaps to reinvest in more real estate) on equity that, as it turns out, was not there. The fact of the matter is that had the values not been fraudulently "inflated" these people would never have made this transaction. Think about this. It is true. They were set up and robbed.

The solution here is simple: require that people who apply for modifications bring in copies of their closing documents; even if their mortgage has been foreclosed upon already. Give them their down payment back, in cash to make the process "equitable." Even in the case of home equity loans made under fraudulent circumstances, cancel the loan. Now, with everybody even with respect to money lost in this Ponzi Scheme of packaging mortgages to sell Mortgage Backed Securities, the process of "modifying" the mortgages can begin and only then.

This could be our last and only opportunity to get this right as the other half of this "plan" is to forgive the mortgage companies for their crime. Yes, to provide "indemnity for future lawsuits" is how it was worded in this holiday's news coverage of this pending disaster with more of our money being thrown away. Yes, on top of the money we lost by making down payments on our real estate.

So, while the AGs all sit and discuss what "criteria" they will apply ask them to consider the following points:

• Do not ask "professionals" who stand to make more commissions from this process to come up with the solutions. They are the people who created the crisis in the first place. You don't ask criminals to help stop crime.

• How was this applicant's credit affected in this event? Did they have a credit score in the high 600s, maybe 700s or higher when they qualified for this mortgage?

• Did this applicant make a down payment on this purchase? Look at the closing documents, a simple way to discover this important fact.

• Has the value of the property depreciated to a value that has wiped out the down payment amount?

• Wouldn't it be "equitable" to first return this person's money lost in this transaction before any more action is taken?

• Submit corrections to the credit reporting agencies to restore these individuals' credit scores to the levels they were prior to being trapped in this fraudulent real estate market.

• Forgive debt taken on by people who borrowed against their property due to artificial appraisals based on the inflated housing "values" that resulted from the corrupt practices in the industry. If these people were not lied to about their property values these loans would have never been made.

• Then, return any remaining funds to the taxpayers. People who did not put any money down or had no credit in the first place have not lost anything. It is that simple. Think about it! Let the banks work that out with their own money, not ours!

Ask your state AG to consider these points. Think about it: If an item is "marked down" in a retail store soon after you bought it, you provide your receipt or your purchase is documented and then your "overpayment" is refunded you. If the store clerk overcharged you, lied about the product's value, or "price gouged" due to a crisis, you get your money back. Is housing any different? I think not. However, this real estate crisis was price gouging on the grandest scale and those who perpetrated it with their "flawed" economic models need to be in prison.

Contact your State Attorney General tell them you want your money back first!

© Frank Louis