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