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    Letters to the editor: The Wisconsin Lawyer publishes as many letters in each issue as space permits. Please limit letters to 500 words; letters may be edited for length and clarity. Letters should address the issues, and not be a personal attack on others. Letters endorsing political candidates cannot be accepted.

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    Wisconsin LawyerWisconsin Lawyer
    Vol. 81, No. 3, March 2008


    Letters to the editor: The Wisconsin Lawyer publishes as many letters in each issue as space permits. Please limit letters to 500 words; letters may be edited for length and clarity. Letters should address the issues, and not be a personal attack on others. Letters endorsing political candidates cannot be accepted. Please mail letters to " Letters to the Editor," Wisconsin Lawyer, P.O. Box 7158, Madison, WI 53707-7158, fax them to (608) 257-4343, or org wislawyer wisbar email them .

    Beware Bogus Literary Agents

    Shortly after my article "Writer Beware: Spotting the Publishing Scam" appeared in the December 2007 Wisconsin Lawyer, I got a call from a new client who had fallen for the other big publishing scam, the bogus literary agent. Since most legitimate publishers will no longer accept unagented submissions, such agent scams abound, especially on the Internet. So here is an addendum to the article, on how to spot a bogus agent:

    1) Legitimate agents are not trolling for clients. If you get a letter from a purported agent who is looking for people who want to be published, that agent is probably scamming you.

    2) Legitimate agents do not charge. The Association of Authors Representatives (the self-policing body of independent literary agents) frowns on any charges, but I have known of legitimate agents who charge a nominal fee - no more than $100 - to read (and perhaps briefly critique) a manuscript for the simple reason that they would otherwise be inundated by semi-literate attempts at authorship. But once an agent accepts a client, the agent should work strictly on a percentage (10 to 15 percent is standard) and should not charge for anything further, with the possible exception of the actual out-of-pocket costs of out-of-the-ordinary services, such as photocopying an entire manuscript or wiring royalties to the author. (Indeed, agents who accept a client for representation may even refund the reading fee.)

    3) Legitimate agents do not rewrite, retype, or rework an author's manuscripts, especially not for a fee. A legitimate agent may tell you that the name of your main character doesn't work for him or her (Scarlett O'Hara was named "Pansy" in the original manuscript of Gone With the Wind) or may suggest that you rework and expand Chapter 7, but not only is such advice free to the agent's clients, the author is always free to reject it - and a legitimate agent will never offer to edit the work for a fee nor will he or she recommend another person or company (usually with a tie-in to the agent) to do so. By the time a legitimate agent takes you on, your manuscript should be professionally competent - typed, grammatical, and in the appropriate format; anything less and you shouldn't be attempting to submit it, because you are just inviting scam responses.

    4) An agent whose other purported clients do not have books found on Amazon.com or in bookstores may be selling to the scam publishers I mentioned in my article - and taking a percentage of the author's royalties. Many of the same Web sites that provide warnings about scam publishers (Preditors & Editors, or Writer Beware, for example) also make note of some, but not all, scam agents.

    As always, if something seems too good to be true, it probably isn't.

    Ellen Kozak, Milwaukee

    Revisiting Andrews in"Mortgage Meltdown" Article

    The December "Mortgage Meltdown" article reflects a limited knowledge of the facts and a biased analysis of the Andrews case and of the reasons that the option ARM mortgage is causing a failure in the mortgage marketplace.

    I take issue with the authors' description of many of these subprime products as "creative financing." The authors suggest that these lousy products benefit the borrowers. With all due respect, most of these products are a complete rip-off, manufactured to confiscate hard-earned homeowner equity and to take customers from the banks that engage in honest practices. They also mislead bank investors, by allowing banks to report accrued interest in the form of negative amortization that is not being collected as charged. The authors suggest that the homeowners concocted schemes to defraud lenders. In truth and fact, the lenders designed many of these loan programs to tease and mislead their borrowers.

    Our firm won on summary judgment the Andrews v. Chevy Chase class action case (No. 2:05-CV-00454, E.D. Wis., filed Apr. 20, 2005) that is described in the article because the bank violated the Truth in Lending Act (TILA). The case is on appeal before the 7th Circuit.

    The Andrewses were holding a 5.75% fixed rate mortgage from Port Washington State Bank. Chevy Chase Bank sold the Andrewses a teaser product, promising a low introductory rate for five years. Although the Federal Reserve requires lenders to provide to borrowers a "truth in lending (TIL) disclosure" document that honestly describes a loan, the bank used a TIL disclosure that was grossly misleading. The Andrewses received a TIL that contained three material misrepresentations promoting a low teaser rate, stating the rate was "5 years fixed," and a false payment schedule that did not disclose the amount the bank is charging every month. A few months after the closing, the borrowers discovered the program was a "monthly" variable rate when their loan balance started increasing even though they were current in their payments. The teaser rate is not fixed for five years. The rate has quadrupled. The payment is not fixed for five years. In fact, the payment is nearly triple what it started at. Each of the closing documents in the program contained deceptive and teaser terms. When the Andrewses brought these issues to the attention of the bank, they were asked to pay a prepayment penalty of 3% of the loan balance or they would not be allowed to refinance their loan. While this case has been going on, the bank has wrongfully held a security interest on their property.

    Several thousand borrowers received the exact same disclosures as the Andrewses. On appeal before the 7th Circuit, the bank is trying to argue that it would be a penalty to the bank for the borrowers to have the loan rescinded. The bank fails to understand the statutory scheme of the TILA, which prohibits a bank from charging interest unless the bank gives honest disclosures.

    Chevy Chase bank is relying on a case that was issued under an earlier version of the TILA that existed before 1980 in the hope of deceiving the 7th Circuit into carving out an exception to TILA for a liability, because Chevy Chase owes a lot of borrowers refunds for the illegal interest charges it imposed. If the 7th Circuit rules in favor of Chevy Chase, the court will be allowing the bank to recover a windfall in the form of undisclosed interest that the U.S. Congress specifically banned the lender from collecting under the TILA.

    The U.S. Supreme Court, in Califano v. Yamasaki, stated that Rule 23 class actions are available as a remedy unless Congress expressly bans them in a statute. In the TILA, it states that a court may "award rescission in any action." The only real question before the 7th Circuit is whether it will ignore the TILA and Supreme Court precedent. If the court does so, it will be the result of amicus lobbying and political pressure rather than reliance on the law. 

    Finally, the article misplaces the blame for broker fraud. Under the wording of the Uniform Residential Loan Application, the broker is the agent for the lender and receives compensation from the lender. Thus, the broker is the agent of the lender and the lender is accountable for broker fraud. Moreover, it is the lender, not the broker, that designs the product and ultimately offers it for sale to the public.

    Kevin J. Demet, Milwaukee

    Comments Disregard Ethics Rules

    Regarding the letter of Thomas R. Jones in the February issue, I found his comments regarding Justice Louis Butler to be not only deplorable, but, more importantly, not to comply with Rule 8.2 of the Rules of Professional Responsibility, to wit:

    (a) A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer, or of a candidate for election or appointment to judicial or legal office.

    Moreover, they are not in keeping with Article 4 in the Preamble, which states in pertinent part: "A lawyer should demonstrate respect for the legal system and for those who serve it, including judges, other lawyers and public officials."

    Such comments also do not comport with the Wisconsin Lawyer letters policy: "Letters should address the issues and not be a personal attack on others."

    I have no quibble with Mr. Jones' argument that voters should be informed as to what a judge's judicial philosophy is, what a judge's past rulings have been, and what persons back the judge's campaign, nor do I question his right to criticize Thomas J. Basting Sr.'s suggestion to form a Judicial Campaign Integrity Committee.

    Mr. Jones' reckless comments toward the end of his letter, however, do nothing to advance his arguments nor do they help inform the Bar or the general public about anything other than Mr. Jones' personal political views and prejudices. Mr. Jones is a sufficiently experienced and competent attorney to know better than to make wild accusations such as these. He would do well to reconsider these remarks and issue an appropriate retraction.

    Scott K. Petersen, Sarasota, Fla.