California Real Estate Insider Sues The Financial Greed Industry In The Public Interest
It's been nearly a year since what we now know as the subprime crisis melted down the markets, caused banks to begin writing down billions in assetless assets, and forced The Federal Reserve Bank to come to the attempted rescue of the American economy by injecting still more billions into the banking system and cutting interest rates seven times. (It hasn't worked!)
It's been nearly a year since this crisis began to ricochet through our financial system and into the world like an out of control virus destroying the housing market, expanding the number of foreclosures and compelling State and Federal investigations and criminal probes by the FBI. In the interim, the "contagion" of our financial system has not been contained and has in led instead t massive hikes in the cost of oil, a crunch in credit systems, mounting unemployment and rising inflation and I can go on.
This system failure has been called a "market correction" by some, and just another bust in a business cycle that regularly builds bubbles to burst. So many institutions, regulators and corporate oversight bodies have aided and abetted this crisis that it seems as if there is no one to blame or hold responsible except perhaps the mostly small fries that have already been busted.
The Bank of International Settlements says the world economy may be "at some kind of tipping point," adding, to underscore the sense of panic in high places, "these fears are not groundless." At the same time it does not want to "apportion blame," perhaps because so many are complicit and ignored warnings. The scale of the dodgy credit derivatives at the heart of this mess has grown an "eye-popping" 10,000 percent in seven years according to an official report quoted by London's Financial Times.
In the US, most of the media avoids too much institutional analysis or exposing the financialization of our economy--ie. rule by a credit and debt complex--and focuses on individuals. Eliot Spitzer's sexual exploits got massive attention. His call for financial prosecution of wrong doers did not.
Meanwhile the MSM press pounds the hypocrisy of Senator Dodd, the former presidential candidate and current Chairman of the Banking Committee, and now Barrack Obama is being smeared for allegedly receiving good deals on mortgages. Although the conflicts are apparent, we as a nation should be much more concerned about the allegations Dodd brings than those presently against him: one or two preferential loans are less important than investigating the origination of trillions in fraudulent loans.
What can anyone do except scratch their heads, and bemoan another cycle of corporate greed and ripoffs. When the whole system is said to be at blame, it's almost as if no one is to blame.. So far, as of early July, Congress has talked rescue and reform but done little. Many experts fear the worst is yet to come.
Who has the guts to take on the phalanx of financial crime and greed? Who will stand up to the subcrime scammers who engineered a calamity that all of us are already paying for?
There are journalists finally explaining this crisis, and some organizations like NACA, the Neighborhood Assistance Corporation of America and ACORN challenging the predators in the streets.
Now there is also a mad as hell man named Michael Blomquist, a former member of the California Real Estate industry, trying take the bad guys to court. He's lost millions a result of bad deals he was sold, but, in the American tradition became one of those born again rebel who once, wronged, has gone on the trail of those responsible.
He's doing it all by himself in the Federal Court with what's called a pro-se law suit--that's when you can't afford lawyers and represent yourself. Needless to say the slick attorneys for the companies he's indicting are trying to stop him with procedural challenges and a wad of convoluted briefs to avoid a reckoning.
Blomquist, an industry insider, alleges a criminal conspiracy, writing in his own brief that:
"Defendants knowingly conspired and or combined to exploit the American Dream of Homeownership, myth that banks are too big to fail, Government policies pertaining to an
ownership society, human emotions (greed, fear) and past court rulings for their own personal enrichment.Instead of maintaining safety and soundness while funding, securitizing and rating
home loans the defendants exploited court decisions in an attempt to shift liability to borrowers and loan originators.Elements of their unconscionable scheme involve "actual malice", deceiving investors into believing that normal stable banking incomes and investment grade ratings were warranted, despite a dramatic and dangerous change in lending practices.
Deceiving buyers into believing that rapidly appreciating home prices were substantiated and based on a buyers ability to pay. Despite banking and thrift's margins at approximation 1-2%; these defendants participated in highly leveraged financing that are devastating millions of American families, shareholders, bondholders and depositors. The proliferation of deceptive Option ARMs and their new, deeply discounted payment structures further establishes scienter.
The most unconscionable element of the defendant's horrific scheme is that the borrowers' incomes could have been easily [emphasis added] verified by any or all via the mandatory IRS form 4506 and 4506-T."
I am not a lawyer and am not able to decipher all the legal terms that a Court demands to both obscure the issues and make it hard for ordinary Americans to get justice. The corporate defendants in the case are insisting the Judge throw out his complaint even though these issues have been amply documented.
Blomquist, like myself, has been attempting to provide insight on this foreseeable crisis from a foot soldier's perspective. His prior comments can be found here. You can also Google his name for other articles he has written
These schemes have not only devastated the economy but, as he argues, the livelihoods of millions of Americans
"Consumer/home prices have skyrocketed to unsustainable levels as a direct result of
defendants' illegal scheme. Interest rates have also spiked despite numerous interest rate cuts by the Federal Reserve. Rampant inflation and countless city bankruptcies (Vallejo) are clearly connected to defendants' criminal behavior. The deterioration of financial and social services is just beginning to surface which will require additional tax revenues. Further attempts to maintain unsustainable prices will further enrich the criminals, enslave borrowers and continue a concentration of wealth within a limited few."
Who is he suing? Here are some of defendants. Some may be familiar to you:
WASHINGTON MUTUAL, a Washington
corporation; KERRY K.
KILLINGER;JOSEPH W. SAUNDERS;
COUNTRYWIDE HOME LOANS, INC. a
Delaware corporation; ANGELO
MOZILLO; WACHOVIA CORPORATION, a
North Carolina corporation; KEN
THOMPSON CITIGROUP, a Delaware
corporation; SANFORD WEILL; CHARLES
PRINCE; GOLDMAN SACHS GROUP,
INC., a Delaware corporation; BEAR STERNS
COMPANIES,INC., a Delaware corporation;
JAMES CAYNE; THE MCGRAW HILL
COMPANY, INC., a Delaware
corporation; HAROLD MCGRAW III;
WELLS FARGO & COMPANY, a Delaware
corporation; PATRICIA R. CALLAHAN;
HERBERT M. SANDLER; ROCK
HOLDINGS,INC., a Delaware corporation;
EXPERIAN CORPORATION, a Delaware
corporation; FIMALAC, INCp
;HAROLD MCGRAW III;
WELLS FARGO & COMPANY, a Delaware
corporation; PATRICIA R. CALLAHAN;
HERBERT M. SANDLER; ROCK
HOLDINGS,INC., a Delaware corporation;
EXPERIAN CORPORATION, a Delaware
corporation; FIMALAC, INC., a Delaware
corporation; MOODYS CORPORATION, a
Delaware corporation;
His Case No.: C07-04108 JF is going to be argued on July 11, 2008 at 9:00 a.m. before Hon. Jeremy Fogel In the US District Court of California in San Jose. If you live in the area, why not support his brave efforts by showing up for his hearing?
If you too are the victim of a predatory lender you can visit this site:
Can one man or Judge or Court stop the biggest financial crime in history? It sounds unlikely unless more Michaels stand up and insist on being heard! Will the people who created the crisis ever pay, or will we have to pay because of them for years to come?
Michael may be angry--like so many who have lost their homes and fortunes, but, at least, he's doing something, trying to fight back on behalf of the rest of us who mostly aren't.
In the spirit of that old campfire song, Michael, row your case ashore
News Dissector Danny Schechter made "IN DEBT WE TRUST" a film on the underlying issue (i and has written the forthcoming book PLUNDER investigating the crisis. He is also involved in a new music project to revive/revise the song HOME SWEET HOME.
He edits Mediachannel.org. Comments may be posted here and sent to Dissector@mediachannel.org