Forum Post: FDIC Bank Closure Process destroying small businessmen, killing jobs, undermining communities and slowing the economic recovery.

The FDIC and its Wall Street Hedge fund partners like Lennar, Rialto and Multibank and others are using billions of taxpayer dollars interest free to fund for profit real estate investments with all their legal bills paid by the FDIC.

This means that borrowers and landowners cannot compete with Lennar, Rialto, Multibank and others in the legal process. They are up against the deep pockets of the taxpayer competing in the courts.

It is important to understand the most small businessmen facing the attack by Lennar, Rialto and others on their personal assets were in good standing when their bank closed. Their only guilt was being in a bank closed by the FDIC.

-----Please forward this message as widely as possible to all possible victims of the FDIC bank closures, Lennar Corp., Rialto Corp, Multibank Corps other Wall Street Hedgefunds developing structured partnerships with the FDIC.

The FDIC is continuing to close approximately 2 banks a week. They have closed over 100 banks each of the last two years. That means that thousands of additional small businessmen, landowners and borrowers are being destroyed putting a huge drag on the economy. Hundreds of local communities are suffering as a result.

Solution:

Congress must reign in the FDIC and subject them rigorous oversight. The structured loan process must be stopped or FDIC must insist that borrowers with loans at failed banks be allowed to work out reasonable settlements where they have the resources to do so.

ALRA can help provide specifics to facilitate a closer look at the FDIC, its main partner Lennar Corp and it’s Wall Street hedge fund subsidiaries such as Rialto and Multibank.

Bottom line, an agency of the federal government (FDIC) has and is forming numerous For Profit Entities [PPIP] to liquidate notes and related real estate collateral left over from failed banks. On its face, OK, what's the problem?

These new For Profit entities are not authorized, protected or empowered by FIRREA [the federal regulation that gives the FDIC super powers] and the loan transfer documents confirm it.

The FDIC then arranges interest free loans from the US Treasury to capitalize the new private for profit LLC FDIC partners created to own the notes and operate the liquidation process.

They use low-ball fair market value valuations and then borrow 100% of that amount from the Treasury Dept. FDIC corporate guarantees the debt. They then sell a 40% interest to a "winning bidder" for pennies on the dollar, typically to a publicly-traded company like Lennar, Rialto, Multibank etc., who also guarantees their pro-rata portion of the loan.

Now we have a Wall Street company (Lennar, Rialto, Multibank and others) as 40% owner of a For Profit LLC using public funds interest free and a 100% loan with all their legal bills paid by the FDIC to shake down and foreclose on damaged borrowers (damaged when their bank failed) for additional dollars before taking the property away from them to in turn make a profit for themselves and the FDIC.

If that wasn’t enough, Rialto and other Wall Street Hedgefunds are then going after the deficiencies of the borrowers. That means taking their homes, cars and anything else they own because the borrowers often pledged personal assets to the bank to get the original loan.

The FDIC has sicked predator organizations like Lennar, Rialto and Multibank on innocent private citizen borrowers destroying them financially and guaranteeing they cannot come back and hire people and help the economy recover.

Remember that in most cases the borrowers did nothing wrong. They just happened to be doing business with a bank that was closed by the FDIC.

Also keep in mind that most borrowers in the process were making their payments and in good standing before the FDIC closed their bank.

These PPIP's (Lennar, Multibank, Rialto etc) are borrowing billions in interest free dollars from the U.S. Treasury. To make matters worse, all their legal bills are paid by the FDIC. The small businessmen cannot compete in the courts and cannot afford to hire the lawyers to stay in the game.

The FDIC has created a situation where there is no opportunity for the borrower to gain equal access to justice.

There are numerous aspects of this that are morally and ethically wrong.

-----A. FDIC is using / risking tax payer funds with no return to the taxpayer.

-----B. FDIC has created an un-level playing field favoring a federal agency and private Wall Street hedge funds and substantially disadvantaging private enterprise and small businessmen. That is contrary to government's function.

-----C. The FDIC is a profit-making partner to the tune of a 60% share in each of the structured loans involved in the process. So the FDIC has become the enemy of the taxpayer borrower. The FDIC continues to be a 60% owner of each of the structured partnerships. So of course they have slanted the playing field and given unusual powers to their own partners.

-----D. If FDIC can do this for Wall Street, why would they not work with the original Borrowers that were damaged when their bank failed or at least include them in the workout solution -- give them a chance to participate and get their investment back? The Borrowers have the property knowledge that would be very valuable to any development resolution down the road, especially critical on development loans.

-----E. The FDIC has become the enemy of local economies. They and their giant Wall Street hedge fund partners intend to make a profit on the property taken from the failed bank's borrower's with no compensation for the property they take. Often the FDIC actions yield a much lower settlement than if the FDIC allowed the borrowers to work out their loan.

-----F. The FDIC guarantees to pay most or all of the legal bills necessary to make Lennar, Rialto, Multibank and other structured partnerships function and attack borrowers. The Lennar, Rialto etc come into court with five or ten attorneys intimidating the court. The borrower has no chance at a fair crack at the legal system. The borrower is swamped with legal bills;.

These same borrowers are unable to refinance to move the loan in today's environment. The banks are not lending and the regulators, state and federal, have told the banks that they will be criticized if they engage in making acquisition & development loans, construction loans and even commercial real estate loans.

So they take the loans and underlying collateral, attempt to bully, intimidate and frustrate the Borrowers on the one-hand while they compile the properties to partner with Wall Street and make a profit with the other.

To be sure, there are bad Borrowers out there that need to be addressed as such. But the majority of Borrowers are good people that honored their loans. They have good histories of honorable dealings with the banks that were closed. They were not the problem.

In many cases, especially acquisition & development and construction loans, the FDIC just "repudiated" a valid loan contracts, refused funding, put the borrowers out of business and breached the terms as a Lender default.

According to reports from borrowers, Lennar, Rialto and others make no effort to deal with the borrowers fairly or even equitably under the law. The borrower is often given little or no opportunity to work out a solution. Lennar, Rialto and others and their representatives use the IRS and litigation as a threat to intimidate.

Remember the FDIC uses funds from the banking industry [insurance fees charged banks] to guarantee depositors' accounts. They do not use taxpayer money for their primary function, so why are they allowed to use taxpayer money interest free to run over small businessmen borrowers, take their property and make profits with a Wall street partner (Lennar, Rialto, Multibank and others)?

MULTIBANK 2009-1 RES-ADC VENTURE, LLC RL RES 2009-1 INVESTMENTS, LLC RES-GA OXFORD, LLC RIALTO CAPITAL MANAGEMENT, LLC RIALTO CAPITAL ADVISORS, LLC MARTYRS, LLC DBS WEGO REALTY & PROPERTY MANAGEMENT RES-GA GDEA, LLC RES-GA 2 LLC RES-GA TWO LLC RES GA 5 LLC RES GA FIVE LLC RES GA 6 LLC RES GA SIX LLC RES-GA 11 LLC RES-GA ELEVEN LLC RES-GA WELLINGTON LAKE, LLC QUANTUM SERVICING CORPORATION RES GA NBSA LLC RL RES 2009 1 INVESTMENTS LLC RLRES 2009 1 INVESTMENTS LLC MULTIBANK 2009 1 RESADC VENTURE LLC CRE VENTURE LLC RES ADC VENTURE LLC MULTIBANK 2009-1 CRE VENTURE LLC RES MULTIBANK 2009-1 CML-ADC VENTURE LLC MULTIBANK 2009-1 RES-ADC VENTURE LLC MULTIBANK 2009-1 CRE VENTURE LLC MULTIBANK 2010-1 SFR VENTURE LLC WEGO PROPERTY MANAGEMENT WEGO MANAGEMENT WEGO TEAM WEGO http://www.wegoteam.com/