City Attorney Mike Aguirre has filed a lawsuit against Bank of America and its new subsidiary Countrywide. The central complaint of the suit appears to be that Countrywide engaged in fraudulent practices by putting people into high-risk mortgages and that Countrywide, as Aguirre put it in a press statement, "originated loans with little or no regard for the borrowers’ financial ability to afford the loans or to sustain homeownership." The suit is intended to prevent Countrywide (now Bank of America) from initiating foreclosure on any homeowner who has a high-risk mortgage and who actually occupies the home.
The lawsuit may be well-intentioned, but it’s unlikely to help San Diego and there’s a fairly good chance that it will make things worse.
It’s also yet another bailout attempt.
continue reading at voiceofsandiego.org
July 30, 2008 @ 9:10 AM
Given that this article deals
Given that this article deals with the housing bailout AND Aguirre (2 polarizing topics for the price of 1!) I am expecting some serious hater comments over at voiceofsd.org.
We will see… so far it’s pretty civil but then again it’s only 9am.
July 30, 2008 @ 10:08 AM
Great read. SD should sue
Great read. SD should sue itself for letting such a tool attain the office of City Attorney.
July 30, 2008 @ 10:57 AM
I liked the article and there
I liked the article and there isn’t anything in it that will bring out the haters because it was balanced. This will not be last time someone tries to “fix” things and your article explained in simple terms why it cannot be “fixed” by anything other than itself.
July 31, 2008 @ 2:51 PM
I must disagree with those
I must disagree with those concluding that Aguirre’s lawsuit is a bad idea. I find that it is all too easy for San Diegans to criticize anything and everything Mike Aguirre does just because it’s Mike Aguirre doing it just because most everyone has a bad opinion of him. While it’s true that some of the remedies sought in his lawsuit, namely injunctions against foreclosures of “high risk” mortgages would ultimately have a deleterious and chilling effect on the local mortgage market, the chances of a court actually granting that type of relief are extremely remote. Don’t forget that in Aguirre’s lawsuit, he names four of the principals of Countrywide, the most notable of which is Tangelo Mozilo. To the extent that monetary relief is obtained against those principals who most likely have snookered away tens and maybe even hundreds of millions of dollars of profits from the mortgage/real estate bubble, I say, let justice be done. Also, the gravamen of the complaint is that the named defendants engaged in unfair business practices. Damn straight they did. And, under the laws of the State of California, city attorneys are among those vested with the power to pursue relief for violation of the California laws proscribing against unfair business practices, so the filing of Aguirre’s lawsuit is certainly something that isn’t a product of Mike Aguirre’s ego.
If I had to guess, part of Aguirre’s motivation in bringing the suit is to create awareness amongst the citizenry of what actually took place. To the extent that’s all he achieves in the bringing of the lawsuit, I say, it still would be worth his effort and the taxpayer expense, because I believe that Joe Sixpack still fails to understand how this mess and disaster came about and fails to understand who profited by it and who continues to keep most of their ill-gotten gains from the catastrophe.
I for one think that if Aguirre’s lawsuit only accomplishes planting the seeds in the citizenry the notion that something like this should never happen again after revealing to the citizenry the reasons and the causes of the event, then more power to him.
July 31, 2008 @ 7:33 PM
pmretep, so who is at fault
pmretep, so who is at fault again? What did Tanzillo do exactly? I could care less about Aguirre, I don’t dislike him, I just think that he has a day job he should attend to. He is a city attorney, one who is employed to defend the city in lawsuits and prosecute muicpal code violations, parking tickets and misdemeanors. This isn’t his apple to bite, these seeds are not his to plant. I also don’t care what is opinion of the war, abortion, gay marriage, the death penalty or any other issue that is not in his job description or realm of authority. I certainly don’t care what his opinion of stated income, teaser rates or pay option arms is.
What “Justice” needs to be done? Where in the law does it say who can be lent money, does this apply to Visa and Mastercard too? Do you honestly think that lender wanted to go out of business and lose money? The took a risk, it didn’t work, some were ruined by it. Same thing happened to the borrowers. Funny that this is only an issue because it didn’t work, had values doubled again and all of the people made money, would anyone be suing anyone? I noticed Aguirre didn’t file a lawsuit against builders for charging too much or sellers for asking for too much profit. Where was the value based prop 13 style legislation that says houses can only go up in price 5% a year, funny, nobody wants to put a ceiling on things, just a floor.
July 31, 2008 @ 8:42 PM
pmretap – Then he should sue
pmretap – Then he should sue Tangelo Mozila for monetary damages, not try to create a “Foreclosure Sanctuary”.
July 31, 2008 @ 10:17 PM
“Joe Sixpack still fails to
“Joe Sixpack still fails to understand how this mess and disaster came about”
Joe Sixpack is a brain-dead moron who is only interested in watching American Idol and scratching his nuts
How exactly will this lawsuit cause Joe Sixpack to understand how this mess and disaster came about?
You need to understand that Joe doesn’t care how it came about – all he cares about is that American Idol comes on when scheduled and that he can blame someone else for his lack of achievement in life
August 1, 2008 @ 10:19 AM
[quote=FormerSanDiegan]pmretap – Then he should sue Tangelo Mozila for monetary damages, not try to create a “Foreclosure Sanctuary”. [/quote]
Right. “Tangelo” or “Tanzillo” (I like that btw – he shoulda spent more time varifying incomes than fake’n’bakin) should be in jail.
People like Aguirre forget that it’s still somewhere around 2% of the nation that are in foreclosure. CA is somewhere around 1 in 60 households, which begs to ask Mr. Aguirre:
Why punish the other 98% with higher rates, inflated home prices, and higher taxes on those who own because of lazy joe sixpack’s reckless borrowing?
August 1, 2008 @ 9:33 PM
pmretep – let me clarify
pmretep – let me clarify something here.
I don’t dislike this idea because it comes from Mike Aguirre.
I dislike Mike Aguirre because of this stupid idea.
August 1, 2008 @ 12:03 PM
Rich mentions higher interest
Rich mentions higher interest rates as a potential lender reaction, and that’s true to some extent, but significantly higher downpayments are also a likely result of this sort of mindboggling silliness.
Now if the banks can sell local loans to GSEs, then none of this may apply, as longer as foreigners are foolish enough to buy FNM and FRE debt (not to mention US Treasury debt.)
August 5, 2008 @ 10:07 AM
HereWeGo wrote:Now if the
[quote=HereWeGo]Now if the banks can sell local loans to GSEs, then none of this may apply, as longer as foreigners are foolish enough to buy FNM and FRE debt (not to mention US Treasury debt.)[/quote]
Yes, but under the new bill only 30yr fixed loans are now bought by these 2 GBSE’s. So higher rates, 20% down payments, and 30yr fixed at 6.5% or higher are going to make it tough for a lot of people who bought on anything else.
August 12, 2008 @ 10:54 AM
To those who questioned the
To those who questioned the remedy that Aguirre is seeking against Tanzillo and the other individual defendants in the lawsuit, he is seeking money damages against them. Read the lawsuit.
To those who questioned why Aguirre is wasting his time with this lawsuit when he should be defending the City against lawsuits filed against it and chasing down parking ticket fines, etc., the Unfair Business Practices laws of the State of California, give specific authorization to State attorneys general, district attorneys and city attorneys to pursue violations of those laws. That is all that Aguirre is doing, namely, pursuing violations of the law which he is authorized to pursue.
To those who want to put all the blame for the current disaster on the people that never should have borrowed money in the first place, don’t forget that it takes two to tango. On the one hand, you have borrowers who bit off way more than they could chew. They’ll pay the price. They’ll lose their property to foreclosure and hopefully learn a valuable lesson in the process. But let’s also not forget to punish the other participants, namely, the lenders, the appraisers, the brokers, and everybody else who helped to inflate the bubble and made a crapload of money in the process. Certainly, you don’t want Tanzillo and his ilk to walk away from this mess with all the benefits and none of the burdens, do you? And who, may I ask, other than a government attorney, whether it be an attorney general, a district attorney, or a city attorney, can most effectively mete out that justice to the perpetrators?
August 14, 2008 @ 9:45 AM
Unfair Business Practices
Unfair Business Practices laws of the State of California, give specific authorization to State attorneys general, district attorneys and city attorneys to pursue violations of those laws.
Since this problem is much more than a city-level problem, then why not deal with it at the State level at the State Attorney General’s office. A city attorney addressing a nationwide problem is equivalent to a city council declaring war. Aguirre is simply pimping for votes.