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To: Ilaine who wrote (76962)	7/27/2011 9:52:09 PM
From: Ilaine	2 Recommendations Read Replies (3) \| Respond to of 218633

>>>Before I became a bankruptcy lawyer I would have scoffed. It's crazy.<<< Even crazier are the negative amortization mortgages. I have many dozens of clients who took out mortgages where, the only payment they can afford is the minimum payment, which, if that's all they pay, they owe more on the mortgage every month. I have one lady who used to owe $100,000 on her mortgage, and now owes $300,000. How and why? She can't explain it, she's functionally illiterate. Most of my clients are not functionally illiterate, just financially illiterate. Innumerate. Whatever you want to call it. They don't read Silicon Investor, and if they did, they have pretty much zero chance of understanding it. The only real explanation is that the people who sold them these loans have no heart. And, the lenders knew that they would be bailed out. And the lenders sold the loans to people who had no idea that what they were buying was toxic. I like to joke that the Chinese sold us their crap goods, and we sold them our crap mortgages. Ha ha. Not actually funny. Vis-a-vis crap mortgages, read: The Big Short. amazon.com

To: Ilaine who wrote (76962)	7/28/2011 1:25:09 AM
From: Cogito Ergo Sum	Respond to of 218633

Great Quote

To: Ilaine who wrote (76962)	7/29/2011 12:35:10 AM
From: Maurice Winn	1 Recommendation Read Replies (1) \| Respond to of 218633

CB, I'm not a lawyer, but when we studied contract law long ago as part of civil engineering education, one of the one of the laws of contract was that parties had to be mentally fit to form a contract. So, children and mentally defective people couldn't form a contract. Such purported contracts would be unenforceable. The people you are describing might be considered "normal" and able to form contracts, but if they are functionally illiterate and so cognitively incompetent that they have no chance of understanding the contract, then they are effectively as hopeless as the children and others. Of course it would not be reasonable to allow a get out gaol free card to people who would claim after the fact to be mental defectives. But I can see that judges might determine that some people were played for fools. That's as old as the hills so there is obviously plenty of case law over the matter and from what I've seen, many people who get into financial trouble knew what they were doing but don't like the result, which was supposed to be that they get rich quick with no effort, on borrowed money. Do you get some contracts rejected by judges as unenforceable due to obvious mental incompetence which creditors ignored in their formation of a contract? Mqurice Edt... speak of the Devil> regarding the article about Wells Fargo: < The Justice probe signals that the agency, after battling claims that it's been too easy on major mortgage firms in the wake of the financial crisis, may be toughening its approach. Its fair lending unit has about 60 open matters, >