This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose.
What virtually everyone who took out a home loan in the last decade already knew become official on July 13th of this year: Interest rates are rigged against the borrower. In other words, the world’s largest banks are guilty of what I call reverse bank robbery.This became an acknowledged fact with the release of a report by the Federal Reserve Bank of New York, which was headed up by now-U.S. Treasury Secretary Timothy Geithner until he assumed that role in 2009, indicating that the London Interbank Offered Rate, otherwise known as LIBOR, was subject to manipulation by these banks, including U.S. banks Bank of America, Chase and CitiBank as well as foreign institutions HSBC and Deutsche. The report also indicated that Geinther knew of the illegal practice at the Bank of New York, yet did nothing to stop it.
To give you an idea of the extensive breadth of this scandal, consider this – a whopping $800 trillion in worldwide financial products are tied to the LIBOR index, with over 90% of all U.S. mortgages, both residential and commercial, being so. Because the interest rates of so many mortgages are tied to LIBOR, even a small falsification of the rate can mean that U.S. borrowers were illegally bilked out of trillions of dollars as excessive interest. Not surprisingly, in a time when one of our governments’ most revered principles is that these fraudulent financial institutions cannot be allowed to fail, not one person has been, or is likely to be, criminally prosecuted. Disgustingly, this is so even when their criminal conduct has undoubtedly led to millions of Americans losing their homes.
There is good news for the homeowner, however. Even though our institutions, including our own government, have failed and deserted us, self-help is available. You simply need to know to use the bank’s fraud against it in defending your home. When considering that every foreclosure action is equitable in nature, meaning that the bank must prove that it treated you fairly in order to take your home away, the far-reaching implications of the scandal become immediately apparent. Chances are that the interest rate in your mortgage is tied to LIBOR, and thus is fraudulent. That being so, if the issue is properly raised you can turn the tables on your bank, and get it back-tracking. Once you put your bank on the defensive, good things are likely to come your way in the form of mortgage relief.
Town Hall Mortgage Meeting update: This week we will focus on exactly how you can turn the banks fraud in manipulating your interest rate against it to save your home.
Note from the author: If you have questions or comments regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com.
Next week: The story of Sarah, who, while not yet in foreclosure, will start laying the groundwork leading to success in saving her home even though her bank refuses to modify her unaffordable 9% interest rate.
Copyright 2012 Daniel L. McGookey