‘Pick-A-Payment’ Mortgage Class Action Settlement – What A Joke This Is!

I am like many of you who have been dismayed on how our banking institutions nearly ruined not only the economy here in the U.S., but also of the world. What is even more disturbing is that none of the people who caused the banking crisis nor the crisis on Wall Street, have been brought to justice. It is also amazing that the U.S. taxpayer is picking up the tab for the outrageous loan scandals that have occurred including this novel approach called ‘Pick-A-Payment’ Mortgage.

The borrower was given the option on how they wish to be taken advantage of. The lender would offer some attractive loan payments, in which the unpaid load interest was added to the end of the loan. This permitted borrowers who other wise would not qualify to obtain a loan that they could not afford. The banks and mortgage companies, who deny any wrong doing, are:

The Defendants include: World Savings, Inc.; World Savings Bank, FSB; Wachovia Mortgage, FSB, now known as Wachovia Mortgage, a division of Wells Fargo Bank, N.A.; Wachovia Corporation; Golden West Financial Corporation; Wachovia Bank, FSB, formerly known as World Savings Bank, FSB-TX; Wachovia Mortgage Corporation; Wells Fargo Home Mortgage; and Wells Fargo Bank, N.A.

The lawsuit claims that the Defendants violated various state and federal laws in connection with the Pick-a-Payment mortgage loan product.  The Pick-a-Payment mortgage loan permitted the borrower to select and make a minimum payment amount for a limited time and subject to certain conditions. When a payment was insufficient to pay the interest owed, unpaid interest was added to the loan balance and the outstanding loan balance increased (“negative amortization”). The Plaintiffs claim that the Defendants did not adequately disclose the Pick-a-Payment loan’s potential for negative amortization.

The Defendants deny all claims made against them, deny that their lending practices violated any laws, and deny that they financially harmed any of their customers.

I believe that the borrowers are entitled to compensation, but what about us taxpayers? We are letting these people get away with financial theft by slapping their wrists.

When are we going to hold these people responsible for their actions? Or have they contributed so much money to the politicians that it places them above the law?

Is it just me, or do others of you who read this find it hard to believe?

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I have been writing for Lockergnome for eight years.