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On February 27, 2008 The Washington Post covered the story of a Wisconsin couple who is suing Chevy Chase Bank. The bank has already lost its case in the federal court in Milwaukee, but the Bank has appealed the case to the circuit court in Chicago.
"The case is alarming Wall Street's biggest banks, which could bear the hefty cost of reimbursing all mortgage interest, closing costs, and broker fees to groups of homeowners who uncover even minor mistakes in their loan documents."
Later in the article we read,
"According to the inspector general for the Federal Deposit Insurance Corp., 83 percent of federally supervised banks that issued loans at the height of the housing boom in 2005 have been citied for 'significant compliance violations'."
The implication is that 83 percent of those loans were faulty and subject to a class-action liability suit. The percentage is probably just as high for other years as well.
" 'It's critical for the industry because if you allow class actions . . . in theory you could have thousands of people in a class and you could have enormous amounts of damage for the industry,' said Thomas H. McCormick, vice president and general counsel for Chevy Chase."
Yes, of course. He is concerned about keeping the bank profitable, not with justice.
"The law states that even a miniscule violation by a lender can lead to a mortgage cancellation, or rescission."
The case above actually began when Bryan and Susan Andrews got an ad offering a fixed mortgage rate of 1.95%. As it turned out, the bank changed the provisions on the final copy of the papers, but worded it in a confusing way so that an average person would be fooled by it. They got a 1.95% rate on the first month only, and then the rate went up to 8%.
This case could establish a precedent that would bring down the whole banking industry, simply because there is so much fraud going on. If you dare to hold the banks accountable, it could threaten the entire banking system. Who knows, it might even threaten the existence of the Fed itself.
I don't see how a corrupt legal system would actually rule against a corrupt banking system, because they always end up doing what is wrong for the "good" of the country. Since failed banks are not "good" for the country, the banks must be protected at all costs, it seems. That is the same reason that government bails out big business, and why there is talk today about the government buying those worthless mortgages that the bankers got rich on in recent years. That way, the banks make all the money and the government takes all the risk.
Incidentally, when big business gets so powerful that it ends up running the government, it is called Fascism. Look it up in the dictionary. And meanwhile, you can read the entire Washington Post article online at: