by Danny Schechter

California Real Estate Insider Sues Financial Greed Industry In The Public Interest

It has been nearly a year since what we now know as the subprime crisis melted down the markets, caused banks to begin writing down assetless assets and forced The Federal Reserve Bank to come to the attempted rescue of the American economy by injecting billions of dollars into the banking system and cut interest rates seven times

It has been nearly a year since this crisis began to ricochet through our financial system and the world like an out of control virus intensifying the number of foreclosures and compelling investigations by State and federal agencies, including the FBI. In the interim, the “contagion” of our financial system has not been contained and has in fact spread worldwide, led in part to massive hikes in the cost of oil, slowdowns in credit systems, unemployment and inflation, and I can go on.

This system failure has been called a “market correction” by some, and just another bust in the business cycle that regularly builds bubbles that burst. So many institutions, regulators and corporate oversight bodies have aided and abetted this crisis that it seems as if there is no one to blame or hold responsible, except perhaps the mostly small fries that have already been busted.

The Bank of International Settlements says the world economy may be “at some kind of tipping point,” adding, to underscore the sense of panic in high places, “these fears are not groundless.” At the same time it does not want to “apportion blame,” perhaps because so many are complicit and ignored warnings. The scale of the dodgy credit derivatives at the heart of this mess has grown an “eye-popping” 10,000 percent in seven years according to an official report quoted by London’s Financial Times.

When the Financial Times is worried, we all should be worried.

In the US, most of the media avoids too much institutional analysis or exposing the financialization of our economy — i.e. rule by a credit and debt complex — and focuses on individuals. Eliot Spitzer’s sexual exploits got massive attention. His call for financial prosecution of wrong doers did not (http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR200802...).

Meanwhile, the mainstream press pounds the hypocrisy of Senator Dodd, the former presidential candidate and current Chairman of the Banking Committee, and now Barrack Obama is being smeared for allegedly receiving good deals on mortgages. Although there may be conflicts, we as a nation should be much more concerned about the allegations Dodd brings, than those presently against him - one or two preferential mortgages are less important than investigating the origination of trillions in fraudulent loans. (Everyone, rich or poor, wants the best rate that they can get. Although, given our mounting inequality, the poor, as a rule, tend to pay more in a system rigged against them.)

What can anyone do except scratch their heads, and bemoan another cycle of corporate greed and rip-offs. When the whole system is to blame, it is almost as if no one is to blame. So far, as of early July, Congress has talked rescue and reforms but done little. Many experts fear the worst is yet to come.

Who has the guts to take on the phalanx of power that claims to be legitimate parts of America’s loan and debt complex? Who will stand up the subcrime criminals who engineered this calamity that all of us will soon pay for?

There are journalists finally exposing this crisis, and some organizations like Neighborhood Assistance Corporation of America (NACA) and ACORN challenging the predators in the streets.

Now there is also a mad as hell rebel named Michael Blomquist, a former member of the California Real Estate industry, trying take the bad guys to court. He has lost millions as a result of bad deals he was sold. But in the American tradition became one of those born again members of the middle class, who once wronged, has gone on the trail of those responsible.

He’s doing it all by himself in Federal Court with what’s called a pro-se law suit — that’s when you can’t afford lawyers and represent yourself. Needless to say, the slick attorneys for the companies he’s indicting are trying to stop him with procedural challenges and a wad of convoluted briefs to avoid a reckoning.

Blomquist, an industry insider, alleges a criminal conspiracy, writing in his own brief that:

"Defendants knowingly conspired and or combined to exploit the American Dream of Homeownership, myth that banks are too big to fail, Government policies pertaining to an ownership society, human emotions (greed, fear) and past court rulings for their own personal enrichment.

The most unconscionable element of the defendant’s horrific scheme is that the borrowers’ incomes could have been easily [emphasis added] verified by any or all via the mandatory IRS form 4506 and 4506-T.”

I am not a lawyer and am not able to decipher all the legal terms that a Court demands to both obscure the issues and make it hard for ordinary Americans to get justice. The corporate defendants in the case are insisting the Judge throw out his complaint even though these issues have been amply documented.

Blomquist, like myself, has been attempting to provide insight on this foreseeable crisis from a foot soldier’s perspective. His prior comments can be found here. You can also Google his name for other articles he has written.

These schemes have not only devastated the economy, but, as he argues, the livelihoods of millions of Americans:

“Consumer/home prices have skyrocketed to unsustainable levels as a direct result of defendants’ illegal scheme. Interest rates have also spiked despite numerous interest rate cuts by the Federal Reserve. Rampant inflation and countless city bankruptcies (Vallejo) are clearly connected to defendants’ criminal behavior. The deterioration of financial and social services is just beginning to surface, which will require additional tax revenues. Further attempts to maintain unsustainable prices will further enrich the criminals, enslave borrowers and continue a concentration of wealth within a limited few.”

Who is he suing? Here are some of defendants. Some may be familiar to you:

Michael Blomquist,
Plaintiff,
vs.
WASHINGTON MUTUAL;
KERRY K. KILLINGER;
JOSEPH W. SAUNDERS;
COUNTRYWIDE HOME LOANS, INC.;
ANGELO MOZILLO;
WACHOVIA CORPORATION;
KEN THOMPSON CITIGROUP;
SANFORD WEILL;
CHARLES PRINCE;
GOLDMAN SACHS GROUP, INC.;
HENRY PAULSON;
BEAR STERNS COMPANIES,INC.;
JAMES CAYNE;
THE MCGRAW HILL COMPANY;
HAROLD MCGRAW III;
WELLS FARGO & COMPANY;
PATRICIA R. CALLAHAN;
HERBERT M. SANDLER;
ROCK HOLDINGS,INC.;
EXPERIAN CORPORATION;
FIMALAC, INC;
HAROLD MCGRAW III;
PATRICIA R. CALLAHAN;
HERBERT M. SANDLER;
ROCK HOLDINGS,INC.;
EXPERIAN CORPORATION;
FIMALAC, INC.;
MOODYS CORPORATION;
JAMES E. GILLERAN;
JOHN M. REICH;
JOHN D. HAWKE JR.;
JOHN C. DUGAN;
SUSAN SCHMIDT BIES;
DONALD E. POWELL;
SHEILA C. BAIR;

You can read his full brief here: http://michaelblomquist.com/Docket/Document97.pdf

His case (No. C07-04108 JF) is going to be argued on July 11, 2008, at 9:00 a.m., before Hon. Jeremy Fogel in the US District Court of San Jose, California. If you live in the area, why not support his brave efforts by showing up for his hearing?

If you too are the victim of a predatory lender, you can visit this site: http://getgreencredit.ml-implode.com/landing-mm.html

Can one man or Judge or Court stop the biggest financial crime in history? Will the people who created the crisis ever pay, or will we have to pay because of them for years to come?

Michael may be angry — like so many who have lost their homes and fortunes — but, at least, he’s doing something, trying to fight back on behalf of the rest of us who mostly aren’t.

In the spirit of that old campfire song, Michael, row your case ashore.

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News Dissector Danny Schechter made “IN DEBT WE TRUST,” a film on the underlying issue and has written the forthcoming book “PLUNDER,” investigating the crisis. He is also involved in a new music project to revive/revise the song HOME SWEET HOME. He edits Mediachannel.org. Comments may be posted here and sent to Dissector@mediachannel.org