And then the f**ked borrowers started suing Countrywide Toxic Mortgage, and the lawyers got real excited

Countrywide, IndyMac, First Fed, WaMu, Wells Fargo and the rest of the toxic lenders who put people into teaser rates and option ARMs (to earn higher commission), and whose agents knowingly falsified loan applications and appraisals "to make the numbers work" (to earn higher commissions), will find out soon enough that there aren't enough lawyers in the land to handle the onslaught of lawsuits coming their way.

The 1980's had asbestos. The 1990's had tobacco. The 2000's will have housing.

Quick! Someone call John Edwards!

(note, I'm short WaMu and WFC)

Borrowers sue Countrywide Financial

Several people who took on home loans from Countrywide Financial Corp. are suing the company, claiming they and other borrowers were steered unnecessarily into taking on risky loans with built-in payment hikes, which ultimately led them to go bankrupt or lose their homes.

The seven plaintiffs filed an amended complaint Friday against the Calabasas-based company and several of its subsidiaries.

Among the allegations are claims that Countrywide tried to "induce as many borrowers as possible into expensive and dangerous subprime loans, because such loans are the most lucrative for Countrywide."

FLASH: The center no longer holds, and today was the day when it all fell apart. S&P admits to the biggest financial con game of all time.

In order for the Great Housing Con Game to work, the bagholders (the buyers of the toxic subprime and liar's loan crap) had to believe that one day they'd get paid back. Even though this garbage was being lent out to people who lied about their jobs, their income and their ability to pay. Or worse yet to people with no jobs, no credit, no income, no honesty, no problem gaming the system themselves and absolutely positively no possible way to make good on the loans once the Ponzi Scheme ended.

Yes, think Casey Serin. Think David Crisp. Think of all the get-rich-quick failed flippers, think the $30,000 income families buying $800,000 homes, think Phoenix, think Miami, think all the sheeple who thought real estate could only go up and up.

So why did the bagholders of these mortgages (China, hedge funds, pension funds, overseas investors), which were so nicely bundled up into neat little CDO's, think they'd get paid back? Why did they think that obvious hilarious loan garbage was worth the price they were paying?

Because the "unbiased ratings agencies" told them so.

Well, not anymore. S&P, one of the three major CDO ratings agencies, now staring lawsuits, jail sentences and the collapse of their game straight in the face, bitchslapped the housing and mortgage market today and simply came clean, in one of the ugliest financial mea-culpas I've ever seen. Simply put, the charade is over. And hundreds of billions, more likley trillions, will now be lost.

So now, the housing collapse goes into overdrive. The Subprime and Alt-A industries die. Hedge funds worldwide fail. Pension funds screw their retirees. Markets crash. China gets pissed. Lending tightens even more. Demand plummets even more. And home prices crash even faster.

It's all over folks. Now we just count up the damage and look for someone to blame.

S&P finally says subprime is mostly junk - New methodology is death knell for the troubled industry

WASHINGTON (MarketWatch) - Standard & Poor's just drove a huge harpoon into the heart of the mortgage credit bubble and it's going to take a long time to clean up the mess once the beast finally dies.

S&P, one of the three main credit-rating agencies that served as enablers of the subprime mortgage boom, announced Tuesday that it would lower its ratings on 612 bonds, a small portion of the mortgage-backed securities it had given its seal of approval to.

But the bigger news is that S&P isn't going along with the charade any more. S&P said it would change its methodology for ratings hundreds of billions of dollars in residential mortgage-backed securities.

And it would review its ratings on hundreds of billions of dollars in the more complex collateralized debt obligations based on those subprime loans.

A lot of debt will be downgraded to junk status. A lot of that debt will have to be sold at fire-sale prices. A lot of pension funds and hedge funds that once thrived on the high returns they could get from investing in subprime junk will now lose a lot of money.

S&P's announcement is a death warrant for the subprime industry. No longer will mortgage brokers be able to help buyers lie their way into a home. Fewer stressed homeowners will be able to refinance their mortgage, thus extending and exacerbating the housing bust.

"We do not foresee the poor performance abating," S&P said. Prices will fall, and foreclosures will rise. More mortgage fraud will be uncovered as the tide goes out.

For true HP wonks, you can read the whole nasty report here.

Trump Implosion Begins - lawsuits, lies, deception and now "A lot of people are going to be hurt on this thing"

Even though a lot of these Trump Tower projects will see lawsuits, foreclosures, financial disaster and mothballs, you gotta give it up for The Donald. He swindled people into paying millions for an apartment, to be "part of the Trump Empire", but alas, the guy didn't even have an ownership stake in the projects - he was just licensing his name out like Subway or Dairy Queen.

Brilliant. And yes, there is a sucker born every minute. And Donald Trump knows it.

Frustrated buyers sue for refund on condo - They bought into the idea of living in Trump Tower luxury. Now they just want their deposit back.

Joe Shultz and Louis Ricci tried to disregard Trump Tower Tampa's growing distress: the broken financing deals, the unpaid contractors and the slippery completion dates.

They will disregard them no longer. Partners on a $1.48-million condo, Shultz and Ricci have become the first Trump Tower buyers to sue to get their deposit back.

They also blame Donald Trump, suggesting the New York tycoon misstated his relationship to the project. Trump said at the time he had a "substantial stake" in the $300-million tower when, in fact, his exposure is limited to a licensing deal with SimDag.

The project, advertised as west-central Florida's tallest at 600 feet and 52 stories, was unveiled with fanfare in early 2005, but remains little more than a hole in the ground at 111 S Ashley Drive in Tampa.

Smitten with owning a piece of the Trump empire, Shultz and Ricci grabbed a condo in August 2005. As part of the 20-percent nonrefundable deposit, the men paid SimDag $148,200 in cash and provided a letter of credit for an equal amount.

"I think these suits are going to become more frequent. I think we're three months away from when developers say, 'Forget about it,' " Long said. " There's a real risk many people will not get their money back. There's a real risk you're going to see a bankruptcy filing."

Long suspects SimDag is out of money and has used up some of the deposits. How else to explain why developers owe more than $3-million to contractors forced to place liens on the property?

"I understand their position. To a certain extent it's a floodgate: If they give one person money back, it's the same for everyone else," Long said.

"A lot of people are going to be hurt on this thing."

What are the Sheeple who got taken gonna do?

Desperate Homedebtors who listened to charlatans like Greg Swann and bought in 2005 and 2006 (or god forbid 2007 - are people really that dumb?) are probably about now realizing that they got taken, that they were had (yet their real estate clerk and mortgage broker of course got paid).

What does a person do who realizes that one mistake, just one, has now ruined his financial future? What does a Desperate Homedebtor looking at foreclosure, short sale or massive losses on his Phoenix condo do?

Lawsuits?

Refund?

Bankruptcy?

Arson?

Violence?

Who does he blame? What will he do?

I think we're about to find out.

Prepare yourselves America for a wave of hostility, lawsuits and anger directed at realtors, mortgage brokers and the NAR

First, let me say that under no circumstance should any distressed homedebtor ever resort to violence against any REIC member. Nor in any circumstance should they burn down their debt-trap or anyone else's debt-trap. It's just money folks.

That said, now that housing is collapsing and Americans are waking up from their no-down, no-doc, liars-loan stupor, and realizing that they significantly overpaid for their sh*tshack, they're gonna be pissed. Really, really pissed.

And who are they going to be pissed AT? You got it - not themselves. Nope, they're gonna be pissed at the real estate clerk, mortgage broker, appraiser and homebuilder. They're going to come to see that they were the mark, the pawn, the target of the Big Real Estate Ponzi Scheme. And they'll realize that the real estate clerk, mortgage broker, appraiser and homebuilder all got paid their big commissions, with the screwed homedebtor's money.

Get ready. Lawsuits. Protests. Shouting. Screaming. Threats. General Ugliness.

Here's one lady in San Diego taking matters into her own hands, picketing the Re/Max office every weekend until they cough up some cash for 'damages' and 'misrepresentation'. Good luck.

"Even though it's always 'buyer beware,' you think that the Realtor is looking out for the client's best interest," Vern Ummel said. "You have to do your due diligence, but you can only work with the information you have. And we weren't given the right information."

"Nobody's going to feel sorry for us," Marti Ummel said. "We can afford to get screwed. But there are other people who can't." And that's why she's carrying out her campaign, to alert home buyers that they should seek independent information to verify what their Realtor tells them.

Marti Ummel said she may continue picketing even after the suit is settled. She wants more than money -- she says she wants to make sure this situation doesn't happen to anyone else."I will not stop picketing until we feel that Re/Max has been fair with us," she said. "I could be doing this for five years."