The United States Securities and Exchange Commission sued Citigroup Inc. with misleading investors about the company's exposure to subprime mortgage-related assets. The SEC also charged one current and one former executive for their roles in causing Citigroup to make the misleading statements in an SEC filing. Citigroup and the two executives agreed to settle the SEC's charges. Citigroup agreed to pay a $75 million penalty. Former chief financial officer Gary Crittenden agreed to pay $100,000, and former head of investor relations Arthur Tildesley, Jr., (currently the head of cross marketing at Citigroup) agreed to pay $80,000.
A copy of the SEC's litigation release is attached. A copy of the SEC's complaint is available at: http://www.sec.gov/litigation/complaints/2010/comp21605.pdf
The SEC alleges that in response to intense investor interest on the topic, Citigroup repeatedly made misleading statements in earnings calls and public filings about the extent of its holdings of assets backed by subprime mortgages. Between July and mid-October 2007, Citigroup represented that subprime exposure in its investment banking unit was $13 billion or less, when in fact it was more than $50 billion.
According to the SEC's complaint filed in U.S. District Court for the District of Columbia, Citigroup represented in earnings calls and public filings from July 20 to Oct. 15, 2007, that its investment bank's subprime exposure was $13 billion or less and had declined over the course of 2007. However, the $13 billion figure reported by Citigroup omitted two categories of subprime-backed assets: "super senior" tranches of collateralized debt obligations (CDOs) and "liquidity puts." Citigroup had more than $40 billion of additional subprime exposure in these categories, which it didn't disclose until November 2007 after a decline in their value.
The SEC's complaint alleges that as early as April 2007, Citigroup's senior management began to gather information on the investment bank's subprime exposure for purposes of possible public disclosure. From the outset of these efforts, internal documents describing the investment bank's subprime exposure included the super senior CDO tranches and the liquidity puts, while noting that they bore little risk of default. Nevertheless on four occasions in 2007, Citigroup stated that its investment bank's subprime exposure was reduced to $13 billion from $24 billion at the end of 2006 — without disclosing the more than $40 billion in additional subprime exposure relating to the super senior CDO tranches and liquidity puts. These occasions included a July 20 earnings call, a July 27 Fixed Income investors call, an October 1 earnings pre-announcement, and an October 15 earnings call.
According to the SEC's order instituting administrative proceedings against Crittenden and Tildesley, they were repeatedly provided with information about the full extent of Citigroup's subprime exposure. Crittenden received a detailed briefing on valuation issues relating to the super senior tranches of CDOs in early September 2007. Tildesley received information that same month that discussed the possibility that Citigroup's disclosures could be misleading because they did not include the amounts of the super senior tranches and the liquidity puts. The SEC's order finds that both Crittenden and Tildesley helped draft and then approved the disclosures that were included in a Form 8-K filed with the SEC on Oct. 1, 2007. The SEC's order finds that, in doing so, Crittenden and Tildesley caused Citigroup's filing to be misleading to investors.
Without admitting or denying the SEC's allegations, Citigroup Inc. consented to the entry of a final judgment that permanently restrains and enjoins it from violation of Section 17(a)(2) of the Securities Act of 1933, Section 13(a) of the Securities Exchange Act of 1934, and Exchange Act Rules 12b-20 and 13a-11. Crittenden and Tildesley, without admitting or denying the SEC's findings, consented to the issuance of an administrative order (copy attached) requiring them to cease-and-desist from causing any violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-11.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
The Loop Center Building
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@kw-llp.com
http://www.kw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com
The Securities and Exchange Commission announced that Goldman Sachs will pay $550 million, and reform its business practices, in order to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.
A copy of Goldman's consent to the settlement is available at:
A copy of the proposed final judgment against Goldman is available at:
In its complaint, the SEC alleged that Goldman misstated and omitted key facts regarding a synthetic collateralized debt obligation (CDO) it marketed that hinged on the performance of subprime residential mortgage-backed securities. Goldman allegedly failed to disclose to investors material information about the CDO (known as ABACUS 2007-AC1), particularly the role that hedge fund Paulson & Co. Inc. played in the portfolio selection process and the fact that Paulson had taken a short position against the CDO.
In agreeing to the SEC's largest-ever penalty paid by a Wall Street firm, Goldman also acknowledged that its marketing materials for the subprime product contained incomplete information. However, Goldman agreed to settle the SEC's charges without admitting or denying the allegations, by consenting to the entry of a final judgment that provides for a permanent injunction from violations of the antifraud provisions of the Securities Act of 1933. Of the $550 million to be paid by Goldman in the settlement, $250 million would be returned to harmed investors through a Fair Fund distribution and $300 million would be paid to the U.S. Treasury.
The landmark settlement also requires remedial action by Goldman in its review and approval of offerings of certain mortgage securities, including the role and responsibilities of internal legal counsel, compliance personnel, and outside counsel in the review of written marketing materials for such offerings. The settlement also requires additional education and training of Goldman employees in this area of the firm's business. In the settlement, Goldman acknowledged that it is presently conducting a comprehensive, firm-wide review of its business standards, which the SEC has taken into account in connection with the settlement of this matter.
The settlement is subject to approval by the Honorable Barbara S. Jones, of the U.S. District Court for the Southern District of New York. If approved, the settlement would resolve only the SEC's enforcement action against Goldman related to the ABACUS 2007-AC1 CDO, but not any other past, current or future SEC investigations against the firm, and not the SEC's litigation against Fabrice Tourre, a vice president at Goldman.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
The Loop Center Building
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@kw-llp.com
http://www.kw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com
Massachusetts Attorney General Martha Coakley announced that Morgan Stanley agreed to pay $102 million to affected Massachusetts homeowners and the Commonwealth following an investigation by the Attorney General's Office into Morgan's role in the securitization and financing of Massachusetts subprime loans. A copy of the Assurance of Discontinuance is attached.
Pursuant to the settlement, Morgan will provide pay $58 million to more than 1000 Massachusetts homeowners, $23 million to the Massachusetts Pension Fund for investment losses, and $19.5 million in taxpayer money to the Commonwealth's General Fund.
As a result of a lengthy investigation, the Attorney General's Office alleged that Morgan entered the subprime arena in Massachusetts by offering funding to retail lenders that specialized in loans to less-qualified borrowers. Morgan provided billions of dollars to subprime lender New Century Mortgage, which alleged used Morgan funds to target lower-income borrowers and to supposedly lure them into loans that "consumers predictably could not afford to pay." The MA AG claimed that the loans often were "unsustainable because of payment shock or poor underwriting," and that "borrowers would have to refinance in the short term or face foreclosure." Some Morgan Stanley investment bankers allegedly referred to New Century as Morgan's "partner" in the subprime lending business.
In addition to the $102 million in financial compensation, the settlement also requires Morgan to change its business practices going forward and to provide information and materials needed in the Attorney General's ongoing investigation of the subprime securitization marketplace.
Today's settlement is the latest in a series of actions brought by the Attorney General's Office in response to the economic and lending crisis. AG Coakley's Office has been a national leader in bringing actions on behalf of homeowners and taxpayers against companies relating to their role in the subprime marketplace, including Goldman Sachs, Fremont, and Option One (see our updates, below).
Allegations in the Assurance of Discontinuance (attached) include that Morgan provided warehouse lending to New Century, and after New Century made the loans, Morgan would place the loans into a securitization pool, and then act as the underwriter selling investments backed by the subprime loans in the pool.
As part of this securitization process, Morgan employed third party due diligence providers to review the quality of New Century's loans. During this review, Morgan allegedly learned:
- New Century allegedly repeatedly violated the Massachusetts Division of Banks' "borrower best interest" standard when it made subprime loans, and thus made loans that violated Massachusetts law.
- New Century allegedly calculated the Debt to Income (DTI) ratio for borrowers based only on the initial "teaser rate" for the loans, rather than the fully indexed interest rate that would kick in after the teaser period expired. When calculated using the fully indexed rate, almost 40% of the loans failed Morgan's own internal underwriting standards for whether the borrower could pay them.
- The large majority of New Century loans supposedly failed the basic test of their own underwriting guidelines and could only be approved as "exception" loans, which required the presence of "compensating factors." Sample reviews by Morgan vendors showed that many of these loans violated the guidelines in several different ways, and about one-third of the randomly sampled loans lacked compensating factors to justify the extension of credit.
- Appraisals used by New Century to value the collateral backing the loans (the homes) allegedly were often significantly different from BPOs that Morgan obtained to check New Century's figures.
- New Century originated a large number of "stated income loans." In fact, a Morgan employee allegedly noted that New Century overused stated income loans to the point of abuse.
All of these due diligence discoveries underscored the riskiness and/or uncertainty relating to New Century's loans and whether borrowers would be able to pay them back. According to the MA AG, it is illegal under Massachusetts law to make loans without reasonably assessing a borrower's ability to pay the loan according to its terms.
In late 2005 and early 2006, Morgan began rejecting greater numbers of New Century loans as a result of the due diligence findings. After New Century suggested it would shift its business elsewhere, Morgan allegedly began again to include a wider range of New Century loans in its purchase pools. A Morgan Stanley senior banker allegedly purchased loans that Morgan's own internal due diligence team initially rejected, and Morgan allegedly waived vendor concerns regarding a substantial number of the New Century loans identified as having material problems.
Moreover, as New Century finally spiraled towards bankruptcy, its risky lending practices exposed to the public, Morgan Stanley continued to lend money to the subprime originator even when other banks would no longer provide New Century with cash. During early March 2007, Morgan Stanley provided millions of dollars that the AG claims "New Century used directly to finance a last round of unsustainable predatory loans in Massachusetts."
Throughout 2006 and the first half 2007, Morgan continued to securitize New Century's predatory subprime loans, and sold investments to two Massachusetts state entities—the Massachusetts Pension Reserves Investment Trust (PRIT) and the Massachusetts Municipal Depository Trust (MMDT). According to the AG, this "led to state funds being used to fuel predatory subprime lending, and to significant losses for PRIT and the MMDT."
Under the terms of today's settlement, Morgan will make the following payments and conduct reforms:
- Pay $58 Million in principal reduction and related relief to over 1000 Massachusetts subprime borrowers
- $19.5 Million payment to the Commonwealth
- $23.4 Million to PRIT and the MMDT
- $2 Million to non-profit groups throughout the Commonwealth to assist victims of subprime foreclosure
- Not fund unfair subprime loans in Massachusetts
- Make additional disclosures to Massachusetts investors regarding its future subprime securitizations
- Provide documents and information to the Attorney General's Office in its ongoing review of industry subprime securitization practices.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
The Loop Center Building
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@kw-llp.com
http://www.kw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com
Attorney General Martha Coakley's Office announced that it has reached a $50M settlement agreement with Goldman Sachs & Company, including substantial principal write-downs and refinancing options for loans owned by Goldman and/or serviced by Litton. Copies of the settlement agreement, and a diagram explaining the write-down process on 1st and 2nd lien loans, are attached.
The Attorney General's Office has been investigating the role of investment banks in the origination and securitization of subprime loans in Massachusetts. In order to resolve any potential claims stemming from the Attorney General's investigation, Goldman has agreed to provide loan restructuring valued at approximately $50 million to Massachusetts subprime borrowers. The loan restructuring program is designed to enable borrowers to replace problem loans with new, more affordable loans that take into account the current value of their properties. Goldman has also agreed to make a $10 million payment to the Commonwealth, and will continue to cooperate with the Attorney General in her ongoing investigation of industry practices.
Under the settlement, Goldman has agreed to significant principal write-downs to allow Massachusetts homeowners to refinance or sell their homes. For homeowners with loans held by Goldman entities, Goldman has agreed to reduce the principal of first mortgages by up to 25-35% and second mortgages by 50% or more. Borrowers whose first mortgage is significantly delinquent will be required to make a reasonable monthly loan payment while seeking refinancing or until they sell their home. If after six months, a borrower is still unable to find financing or sell his or her home, Goldman will reduce the principal owed on the existing loan to assist the borrower. Additionally, for loans not currently held by Goldman, but which are serviced by Goldman's affiliated servicing company, Litton Loan Servicing LP, Goldman has agreed to assist qualified borrowers with finding refinancing options and other alternatives to foreclosure.
The Attorney General's Office states that it began its investigation into the securitization of subprime loans in December 2007, and that it has focused on a variety of industry practices involved in the issuance and securitization of subprime loans to Massachusetts consumers. The MA AG's Office also states that it is investigating whether securitizers may have:
- facilitated the origination of "unfair" loans under Massachusetts law;
- failed to ascertain whether loans purchased from originators complied with the originators' stated underwriting guidelines;
- failed to take sufficient steps to avoid placing problem loans in securitization pools;
- been aware of allegedly unfair or problem loans;
- failed to correct inaccurate information in securitization trustee reports concerning repurchases of loans; and
- failed to make available to potential investors certain information concerning allegedly unfair or problem loans, including information obtained during loan diligence and the pre-securitization process, as well as information concerning their practices in making repurchase claims relating to loans both in and out of securitizations.
The Goldman settlement and the Attorney General's investigation into securitizers reflect the latest aspect of the Office's comprehensive enforcement approach to combating subprime lending and the foreclosure crisis. This latest inquiry concerns the role of securitizers—those who bundled mortgage loans and sold them as mortgage-backed securities or other investment vehicles.
The Attorney General's Office has sued Fremont Investment & Loan, as well as Option One and its parent H&R Block, alleging unfair, deceptive and predatory lending practices, and obtained preliminary injunctions against those companies. (See our prior updates below.) The Office also promulgated new consumer protection regulations, effective in January 2008, governing mortgage lenders and brokers.
For a map of Massachusetts illustrating locations of loans covered by this agreement, please see:
http://www.mass.gov/Cago/docs/press/2009_05_11_goldman_map.pdf
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@kahrlwutscherllp.com
http://www.krw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
From: Ralph T. Wutscher [mailto:rwutscher@krw-llp.com]
Sent: Thursday, December 11, 2008 7:18 PM
To: Ralph T. Wutscher
Subject: FYI: MA Sup Ct Affirms Lower Court's Injunction in AG Litigation Against Fremont
The Supreme Judicial Court of Massachusetts affirmed the lower court's grant of a preliminary injunction against the company formerly known as Fremont Investment & Loan. A copy of the opinion is attached.
As discussed in our prior updates below, Fremont appealed a preliminary injunction in favor of the Massachusetts Attorney General that restricts Fremont's ability to foreclose on residential mortgage loans with certain features the judge described a "presumptively unfair."
The Massachusetts high court disagreed with Fremont's argument that: (1) the lower court retroactively and in an ex post facto fashion applied new rules or standards for defining what is "unfair" under Massachusetts's UDAP statute; (2) the lower court improperly expended the reach of the state's "predatory lending" statute to reach loans not covered by that statute; (3) the lower court improperly ignored that the loans at issue were permissible, valid and legal when made; and (4) the lower court improperly ignored the effects of its ruling on mortgage loan pricing and the availability of credit when considering public policy implications.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@krw-llp.com
http://www.krw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
The Massachusetts Attorney General brought an action against Option One Mortgage Corporation and its affiliates similar to that which she brought against Fremont (see our updates below). The same court granted the Attorney General's motion for a preliminary injunction in the Option One litigation. A copy of the opinion is attached.
Referencing its earlier Fremont decision, the court held as follows:
In this Court's Fremont Decision, the Court found that it is an unfair act in violation of G. L. c. 93 A, section 2 for lender to issue an adjustable rate home mortgage loan secured by the borrower's principal dwelling that the lender reasonably should expect the borrower would be unable to afford to pay or be able to refinance once the introductory period ends unless the fair market value of the home has increased at the close of the introductory period. In that decision, the Court characterized this as structural unfairness. In this decision, this Court characterizes it as reckless disregard of the risk of foreclosure.
However, in its Option One decision, the court changed the criteria for structural unfairness. Here, the court lowered the introductory rate criterion from 3% to 2%, explaining the revision as follows:
In blunter terms, most mortgage loans that fell into delinquency were so carelessly underwritten that the borrower could not afford them even before the payment shock kicked in. Therefore, this Court will revise the second criterion by including all loans with an introductory or "teaser" rate for the initial period that is at least 2 percent lower than the fully indexed rate, and will eliminate this criterion entirely for all loans with a debt-to-income ratio of 55 percent or above.
The court also lowered the loan-to-value criterion from 100 percent to 97 percent, with the following explanation:
…for all practical purposes, a loan meeting the other three criteria with a loan-to-value ratio of 97 percent will only be able to be refinanced by a loan with a loan-to-value ratio equal to or greater than 100 percent, which will almost certainly not be available to a lender with a 50 percent debt-to-income ratio. Therefore, this Court provides the fourth criterion to require a loan-to-value ratio of 97 percent or a substantial prepayment penalty or a prepayment penalty that extends beyond the introductory period.
As with Fremont, the court did not find any evidence of pervasive deception or other wrongdoing on the part of the defendants in the Option One litigation. Nevertheless, it again found that the Attorney General was likely to prevail at trial on the issue of structural unfairness, and consequently, granted the Attorney General's motion for a preliminary injunction. Likewise, the Court's preliminary injunction imposed the same review procedure as in the Fremont decision.
Apparently, the court revised the criteria set forth in the Fremont decision upon being informed that only a very small fraction of loans in dispute would have met all four of the criteria imposed against Fremont. The court felt compelled to change the criteria in order to enjoin the foreclosure of a greater population of loans.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
RWutscher@krw-llp.com
http://www.krw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
The Supreme Court of Massachusetts announced that it is soliciting amicus briefs in Fremont's appeal of the appellate court's and trial court's decisions. (See our updates below).
Amicus submissions are due on or before September 22, 2008.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Roberts Wutscher, LLP
105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (866) 581-9302
Mobile: (312) 493-0874
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you. A Massachusetts appellate court judge upheld the preliminary injunction entered against Fremont Investment and Loan, preventing Fremont from initiating or advancing foreclosures on loans that are deemed "presumptively unfair" without prior approval from the court. A copy of the appellate opinion is attached.
The appellate court noted that "[i]t has long been understood that a factor to be considered in determining whether a practice should be deemed unfair is whether it is 'within at least the penumbra of some common-law, statutory, or other established concept of unfairness."
Moreover, the court also noted that "[t]he fact that particular conduct is permitted by statute or by common law principles should be considered, but it is not dispositive on the question of unfairness." According to the appellate court, because the loan terms at issue (see our update below) were not explicitly authorized under state or federal law, Fremont could not qualify for the exemption under the Massachusetts UDAP statute for conduct permitted under state or federal law.
The appellate decision here was rendered by a single appellate court justice, under an "abuse of discretion" standard of review. Fremont was granted leave to move for full panel review by May 15, 2008.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Roberts Wutscher, LLP
10 S. LaSalle Street, Suite 3500
Chicago, Illinois 60603
(312) 551-9320 Direct Dial
(866) 581-9302 Facsimile
(312) 493-0874 Mobile
RWutscher@rw-llp.com
http://www.rw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
The Massachusetts Attorney General obtained a preliminary injunction in a case against Fremont General and Fremont Investment and Loan, preliminarily enjoining Fremont from initiating or advancing foreclosures on loans that are "presumptively unfair." A copy of the order is attached.
The court held that a loan is "presumptively unfair" if it possesses the following characteristics:
- The loan is an adjustable rate mortgages with an introductory period of three years or less:
- The loan has an introductory or "teaser" interest rate that is at least three percent lower than the fully-indexed rate;
- The borrower has a debt-to-income ratio that would have exceeded 50% (not based on stated-income application representations, but upon other evidence of income), calculated using the fully-indexed rate; and
- Fremont extended 100% financing or the loan has a substantial prepayment penalty or penalty that lasts beyond the introductory period.
Under the terms of the injunction, Fremont must provide the Attorney General's Office with at least a 30-day notice of all foreclosures it intends to initiate for the approximately 2,200 loans that Fremont still owns and services, and allow the Attorney General an opportunity to object to the foreclosure going forward. If Fremont has issued a loan that is considered "presumptively unfair," and the borrower occupies the property as his or her principal dwelling, the Attorney General has 45-days to object to the foreclosure.
After the notice and objection process, Fremont may only proceed with a foreclosure to which the Attorney General objects if Fremont files a request with the Court, and the Court reviews the matter and agrees that a foreclose is appropriate. In considering whether to allow the foreclosure, the court will consider, among other factors, whether the loan is unfair and whether Fremont has taken reasonable steps to work out the loan and avoid foreclosure. The preliminary injunction does not release borrowers from their monthly mortgage obligations.
Importantly, the court stated that the evidence showed that Fremont was the victim of misrepresentations on stated-income loan applications, and did not encourage or tolerate such misrepresentations. Specifically, there was no evidence that: (1) Fremont knew of any of the alleged misrepresentations of income on the 50 or 60 stated-income loans at issue; or (2) Fremont recklessly supervised its brokers by continuing to do business with them after Fremont learned that the brokers had a pattern or practice of inflating the borrower's income on loan applications. Likewise, the court also found no evidence that Fremont had ever misrepresented the terms of the loan to any borrower.
However, even though there was no indication that any of the loans were "high cost mortgage loans" under Massachusetts law, the court found that the Attorney General's theory of "unfairness" fell under the "penumbra" of the interests sought to be protected under the Massachusetts high-cost mortgage loan statute.
Also, the court emphasized that "borrowers who have received presumptively unfair loans from Fremont should not interpret this preliminary injunction to mean that they have been released from their obligation to repay these loans. Borrowers share with Fremont the responsibility for having entered into a mortgage loan they cannot repay. The spirit of this decision is simply that Fremont, having [allegedly] helped borrowers get into this mess, now must take reasonable steps to help them get out of it."
Let me know if you have any questions, or would like to discuss. Thanks.
Ralph T. Wutscher
Roberts Wutscher, LLP
10 S. LaSalle Street, Suite 3500
Chicago, Illinois 60603
(312) 551-9320 Direct Dial
(866) 581-9302 Facsimile
(312) 493-0874 Mobile
RWutscher@rw-llp.com
http://www.rw-llp.com
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
