Repackaging Risk
Attorney
(866) 735-1102 Ext 385
As of this moment, on the auction site eBay, there are an assortment of Bear Stearns items being listed by several sellers. There are coffee mugs, t-shirts, duffle bags, umbrellas, etc. and all of them bear the Bear Stearns logo. But there is one item separating itself from all the others: a blue Bear Stearns helmet. The last bid on it, as of 1:40 PM PST, was for $152.50 and has 18 hours left till a lucky bidder has won it. The helmet features the Bear Stearns logo on the front, and an ominously ironic slogan, "Repackaging Risk," on the right side.
Earlier this week, several homeowners, who have been crushed by the iron heel of the subprime mortgage crisis and the "repackaging risk" lending practices of companies like Bear Stearns, decided to show up and vent their frustrations in the lobby of Bear Stearns' headquarters. The Machiavellian employees of Bear Stearns finally got to see some of the faces of Main Street, who, collectively, are paying as great a price (if not more so) as the troubled Wall Street firm. Many mortgagees spoke loudly about the problems they face in regards to their loans and many, it appears, had been tricked into an Option ARM loan with a very appealing "teaser" rate. A paramedic from Connecticut, Renee, was agitated, vocal, and realized she's been, "caught in a predatory loan," (Guardian, 3/28/08). However, she probably didn't realize that the teaser rate she had signed up for actually expired less than 30 days after its commencement, and, likely, before she had even submitted her first payment.
It's unfortunate that homeowners have been put in this mess, but it's even more unfortunate that when these victims of "repackaging risk" come to the place of business that clearly paved the way for all of this to occur (regardless of current conditions surrounding the housing market), they aren't even listened to by its employees and are just casually dismissed. The federal government has taken notice. And instead of finding immediate solutions to help freeze or lessen the severity of mortgages that are underwater, the Bush Administration has put together a stimulus package that couldn't even cover a whole month's mortgage payment per household (an adjective that comes to mind: myopic), and, rather, has chosen to inject $29B into the transaction of JP Morgan rescuing Bear Stearns assets from being worth more than the price of a "Happy Meal" per share.
Refreshing the page that lists the Bear Stearns helmet, the current bid is at $177.50 (again, in another turn of irony, that was near the highest price a Bear Stearns share was trading at a little over a year ago). It's become apparent why Bear Stearns chose to purchase hard hat helmets for the ground breaking of its Asset Management Building: in case those "repackaging risk" mortgages (i.e. mortgage-backed securities) came tumbling back at them in a manner closely resembling what has transpired over the last year and possible shoddy construction.
Any mortgagee that is currently in an Option ARM loan and who chose a "teaser" rate payment option should get in touch with an attorney to find out what they can do to resolve possible misrepresentations on their Truth in Lending Disclosure form. The attorneys at Kiesel Boucher Larson LLP can provide such assistance.