Loan Modification

Common Sense v. Legal Sense: You Can?t Get Refinanced? Guess Who Got A New Second Mortgage? O.J. Simpson

By Karen Oakes, Southern Oregon Mortgage Law Attorney

Hat tip to the blog author at Underbelly for pointing the way to the news that Washington Mutual granted a second mortgage to O.J. Simpson AFTER the huge civil judgment had been entered.   And why would they do that?   Because there was a note in the Wamu file from Simpson saying that the judgment was no good because he didn’t do the killing.    The second mortgage was disclosed in a Seattle Times article about Washington Mutual’s reckless strategies in lending practices.

You might recall that you haven’t heard much about Washington Mutual these days.   In late 2008, the institution’s banking units were seized by federal banking regulators.   JP Morgan Chase acquired the banking assets shortly thereafter.    Among the reasonsfor failure given by Times author, Drew DeSilver, were:

? In its headlong pursuit of growth, WaMu systematically dismantled or weakened the internal controls meant to prevent the bank from taking on too much risk ? the very standards and practices that had helped it grow in the first place.

? WaMu’s riskiest loans raked in money from high fees, but because the bank skimped on making sure borrowers could repay them, they eventually failed at disastrously high rates. As loans went bad, they sucked massive amounts of cash that WaMu needed to stay in business.

? WaMu’s subprime home loans failed at the highest rates in nation. Foreclosure rates for subprime loans made from 2005 to 2007 ? the peak of the boom ? were calamitous. In the 10 hardest-hit cities, more than a third of WaMu subprime loans went into foreclosure.

Judges around the country have proven to be fed up with Washington Mutual, as explained by my colleague Carmen Dellutri, after a Sarasota Florida judge shut down one of WaMu’s foreclosure processes.   

WaMu had more success at least attempting to foreclose on other celebrities, such as Evander Holyfield, as explained by Georgia attorney, Jonathan Ginsberg.  The problem with the Washington Mutual/Simpson second mortgage is that the Goldman/Brown judgment has priority over the Washington Mutual mortgage.   Washington Mutual cannot foreclose without paying that judgment.     Simpson has already proved he will not pay the Goldman/Brown judgment, so Washington Mutual won’t be paid unless Simpson voluntarily paid them.   Anyone think he is paying his second mortgage from the Nevada prison he is currently residing in?

Related posts:

1. A Common Sense Mortgage Solution From An Arkansas Attorney
2. Sarasota Florida Judge Berlin Slams The Foreclosure Door On Wamu!
3. Credit Cards vs. Mortgages: Be Careful What You Wish For

Full post as published by Mortgage Law Network on December 28, 2009 (boomark / email).