The Texas Attorney General’s Office and a pair of Lubbock-based businesses that buy mortgages from sellers are trading paper salvos regarding consumer protection issues in Lubbock County Superior Court.

Enhance Mortgage Corp. and Templeton Mortgage Co. sued Attorney General Greg Abbott’s office Sept. 21, alleging the Lubbock office of the AG’s consumer protection division was making false allegations and threats through misuse of the state’s Deceptive Trade Practices-Consumer Protection Act.

The AG’s office countered Oct. 25 with a suit accusing the two mortgage businesses and company officers Mark Templeton Brown and Amy Dawn Brown of violating the state’s consumer protection laws.

Christopher Whalen, co-founder of Institutional Risk Analytics, doesn’t expect the good times to last much longer — especially for the big banks. Whalen thinks they’re headed for a world of trouble — although if you follow his comments, you know he’s been saying that for at least a year.

"The crisis is going to come when people realize this current GDP level… is normal," he says, referring to the economy's 2% annual growth rate last quarter. That realization will lead to a sell-off in bank stocks, he predicts. “I don’t see how they (the stocks) can go up if we have down revenues and uncertain GDP.”

Indeed, fairness dictates that all of the financial claims against [Ambac Assurance Corp] be segregated. Yet in an affidavit filed with the Court, Dilweg argues that holders of financial guarantees such as Dunkin Doughnuts and Herz will be inconvenienced if the CDS contracts are not closed-out. But Dilweg's sworn statement seems inconsistent given that he is advantaging one class of non-insurance financial claims for another. Why are the RMBS claims inferior to the convenience of Herz and Dunkin Doughnuts? Why are CDS senior to any insurance wrap by AAC and in particular the coverage of RMBS?

The determinative factor for Dilweg seems to be the Geithner imperative of first paying the bank counterparties in the CDS and effectively repudiating similar guarantees on RMBS, which were destined to eat all of AFG's capital had the State of Wisconsin not intervened. That economic fact of the losses on the RMBS, at the end of the day, was probably the driver behind Mr. Dilweg's sworn statements to the Court.� And how conveninent that the State of Wisconsin decides to segregate the liabilities most likely to become current.