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Thursday, May 30, 2024 | Back issues
Courthouse News Service Courthouse News Service

How the Housing Fiasco Was Born

SIMI VALLEY, Calif. (CN) - In a RICO claim all too typical of the subprime mortgage fiasco, a Mexican-born woman who earned $2,810 a month as a house cleaner says Countrywide Home Loans sold her a $482,000 mortgage with monthly payments of $2,871 (plus $700 in monthly taxes and HOA dues), promised that she could refinance it at no cost, but shafted her.

In a wordy and somewhat ungrammatical summation of the nation's housing catastrophe, the plaintiff's attorney wrote: "Defendants' conduct in plaintiff's case was not an isolated incident. ... Defendants' regular business practice takes advantage of confusion between the genuine business of mortgage lending and a complicated but convincing moneymaking scam of selling or securitizing in the secondary market fraudulent purchase-money loans and refinance deals that violate statutory and common law standards and that use fictional accounting and imprudent business practices to unsophisticated borrowers who defendants know, or should have known, could not pay the loans; that it [sic], unless defendants continued to provide even shoddier loans to draw in more borrowers having less ability to pay, who then bought more houses, pushing real estate prices yet higher resulting in further rounds of junk refinancings and higher prices, and so on, with huge, with huge [sic] exponential profits traveling up the chain to defendants from swindled consumers at the end of the chain, including plaintiffs."

Elizabeth Martinez demands treble damages for RICO violations, untrue or misleading statements, quiet title, and voiding of contract. She is represented by Emmanuel Fobi in Ventura County Court.

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