>FTC cracking down on deceptive mortgage ads
>Lenders who don't fully disclose terms may face civil action
WOW this may be a big legal loophole for the borrowers, if they
didn't disclose the full terms in dollars even in the documents.
When the first wins in court this will cost investors tens of billions of dollars even if the mortgage broker is dead now
and this will hunt the Mortgage originators still left (CFC,WAMU,OOMC) for years to come. Both the investors and the borrowers will go after the lenders/originators.
The legal mess from housing will roll on IMHO for the next few years:
- Borrowers against lenders (deceptive marketing)
- Lenders against borrowers (SISA,kickbacks,EPD,fraud...)
- Lenders against mortgage brokers/originators (SISA,kickbacks,..)
- Investors against Rating agencies (Misrating, rating payed be lenders)
- Investors against Lenders (SISA,deceptive marketing)
- Lenders against housing firms (kickbacks, appraisal fraud)
- MI against lenders/originators/borrowers
- investors against hedge fonds for not disclosing risk
- banking supervisors against banks (off balance SIVs)
- lenders and/or borrowers against appraiser (appraisal to high)
- banks against hedge fonds and vice versa
- FBI,FTC against the rest for rampant fraud or deceptive marketing, SISA, Insider selling,kickbacks, ...
This legal mess will increase the risk in owning any non GSE mortgages and devalue the MBS further. |
