$258,900 for a Condo in Santa Monica? One Catch. It is 400 Square Feet. Attorney General Has Eyes Set on Option ARMs.

I have been covering the option ARM fiasco for a very long time now and as I have highlighted before, this is very much a California problem. Apparently I’m not the only one that has realized that option ARMs are a ticking time bomb just waiting to go off. None other than our own attorney general, Jerry Brown is going after the top option ARM banks and servicers. He has a few of the same questions that we have. How in the world are banks going to deal with the coming recasts? Have banks done anything since the crisis has started in addressing these loans? Inquiring minds would like to know.

The AG has been busy in the last year. He went after toxic mortgage poster child Countrywide successfully and recently, has gone after State Street. Jerry Brown recently came on CNBC regarding State Street:

Source: Zero Hedge

If anything, the AG is one of the few people that is actually going after the crony bankers and Wall Street for their financial robbery against the U.S. We should be saluting the AG for this. Instead, CNBC with their typical pandering and cheerleading for Wall Street tries to make a mockery out of the interview:

“I don’t dispute that $56 million is a lot of money, I don’t dispute the merits of the suit but you had a big press conference, you’re coming on C….N….B….C…. all this surrounding publicity over this $56 million, what do you say to people who look at this and say this is a perfect example of the demagoguery that attorney generals [sic] use when they want to run for governor.”

This is precisely what is fundamentally wrong with the financial press. Here we have a public official who has gone after Countrywide, is going after State Street, and is now openly questioning the practice regarding option ARMs that are arguably the worst loan products ever devised and CNBC has the gall to mock him for “$56 million” because in their journalistic circles, this is a tiny amount that only the proletariat would worry about. Contrary to their comrade circles, $56 million is a lot of money plus, there is the need to stop the financial thievery that has engulfed this country. Who else is going after these institutions legally? I realize that next year is a big election year and Jerry Brown is the front leading Democrat but come on financial press, we should be seeking out folks like this and Elizabeth Warren who are actually on the side of the consumer.

So what is in the letter you ask?