Freddie, Fannie Force Borrowers to Waive Legal Rights
Mary Kane, The Washington Independent: "When the government announced in November that it would use mortgage giants Fannie Mae and Freddie Mac to streamline loan modifications for possibly hundreds of thousands of borrowers, officials billed the idea as a fast-track program to fight foreclosures. What no one mentioned is that homeowners would have to sign away their rights to sue, if they wanted to get those loans modified. The waiver of legal rights is buried among a long list of requirements in loan modification agreements for delinquent borrowers seeking more affordable loans under the new loan program, which began on Dec. 15."
In this particular incident, lenders who have just screwed people to the wall and gutted the economy are now demanding that borrowers waive their right to sue if something else goes wrong. That seems like a good way to guarantee that something will go terribly, horribly wrong -- and probably will end with more people homeless and the lenders demanding more money from the taxpayers.
I wish them much jingle mail.
January 17 2009, 11:44:26 UTC 12 years ago
Also in employment contracts, if a company tries to put a clause in saying that if you leave, you must notgo and work for a competitor, that sort of clause is usually unenforceable in law because it represents a restraint of trade.
Ideally somebody would take one of those waivers you describe and bring a test case in the courts. I hope someone is brave enough. A company should not be able to say "anyway, we have no duty to provide any of the things you are paying for, so there". It's against natural law.
January 17 2009, 15:41:41 UTC 12 years ago
Hmm...
January 17 2009, 17:55:54 UTC 12 years ago
I've heard that from various sources. The problems include:
1) The victims targeted by this attack are all poor. Not only does that limit their ability to sue now, but many of them have always been poor. That usually means an inferior education, so they probably don't know what their rights are. They're easy prey for slick marketeers. The lenders know this; it's a key reason why they targeted that market.
2) America is currently more concerned with what is profitable than with what is right; that's what created the mortgage crisis in the first place. Plenty of laws and courts uphold things that are wrong, or against natural law. The tendency is to favor corporations over individuals, even when individuals are harmed or killed by corporate actions. This makes it risky to trust that the courts will do what's right.
>> Ideally somebody would take one of those waivers you describe and bring a test case in the courts. I hope someone is brave enough.<<
That requires not only bravery, but the knowledge that a lawsuit is possible despite the contract, the money to lodge a suit, and the time and energy to see it through. The chance of a poor person having all of those things is slim, although it would be wonderful if such a suit came together.
>> A company should not be able to say "anyway, we have no duty to provide any of the things you are paying for, so there". <<
In fact, I've seen that concept propagating wildly, in almost those exact words. Let me think ... "You understand there is no guarantee that this will have the desired effect. It may have no effect, or it may make things worse." Why would anyone put up with that nonsense? Because that provider is the only one available, or there's no time to get another one, or there are others all of whom now say the same thing. Businesses literally don't want to promise that their services will do you any good, or that they'll do you no harm. It's appalling.
>>It's against natural law.<<
I agree. Wouldn't it be nice if it were against paper law also? Businesses shouldn't be allowed to defraud people out of their rights, even if the contract is unenforcable. If something has been established as not valid contract procedure, it should not be allowed in a contract. And yet, there they are, all over the place. That creates an impression that those things are valid, because why else would they be so frequent?
January 19 2009, 02:25:26 UTC 12 years ago
For example, the SCA always has such waivers at any event. Most likely it is to prevent people from just coming along and needlessly hurting themselves, but also necessary at feasts where you *could* get food poisoning (doesn't matter how good of a cook you are, it can happen).
Those sorts of things I would hope hold up in court.
The fannie/freddy thing is just absurd and sounds like they're trying to prevent a class action suit should they attempt to freeze all of the assets they hold.
Hmm...
January 19 2009, 04:36:23 UTC 12 years ago
I am endlessly frustrated by America's knack for screwing things up at both ends of the spectrum: the courts are jammed with ridiculously inappropriate suits, while at the same time, people are being stripped of their right to sue for harm that was someone else's actual fault. Some parts of the system are just so broken, I don't even know where to begin fixing them. And when people put stuff in contracts that may or may not even be enforceable, it's difficult or impossible to tell if the nonsense you're reading is genuine or illusory.
Re: Hmm...
January 19 2009, 07:06:16 UTC 12 years ago
I think for the most part, it is mostly there to prevent lay people coming along, doing something to harm themselves and then filing a lawsuit for something which was not the direct fault of any person there. Again, in the case of the SCA, it's not organised in the sense of an organisation. It's a lot of individuals coming together and sharing an event but becuase you'll have maybe 100-200 people, it has to be held at a community centre and not someone's home.
Re: Hmm...
January 19 2009, 07:17:11 UTC 12 years ago
What it comes down to is, people need a legitimate way to resolve disputes. If that's taken away, many of them will resort to undesirable methods of satisfaction. That would be bad, in the same way that sealing steam valves is bad. Things explode.
Re: Hmm...
January 19 2009, 07:10:33 UTC 12 years ago
If someone were to go and trip and, say, hurt an ankle, the waiver would prevent them from tryign to sue the non-profit Bruce Trail org for liability, since they arranged the event in the first place. It was not the fault of Bruce Trail that the individual was hurt, but that's not going to stop the person from suing and potentially winning.
Hence the waiver.
So far as I know, it is held up in Canadian courts.
January 17 2009, 13:24:27 UTC 12 years ago
January 17 2009, 14:55:02 UTC 12 years ago
January 17 2009, 16:59:34 UTC 12 years ago