Class Actions Being Investigated

People have been asking about class actions. With a little bit of help at I have come up with the following list. The one to watch is in Reno Nevada filed by Hager and Hearne. It covers Arizona, Nevada, and California. It has not been certified yet as a class action. I am involved as an expert witness in those cases (Lopez v Executive Trustee Services et al) and some other ones as well. Keep in mind these are investigations and that so far there is something like “probable cause” but not proof these were systemic actions or part of an established pattern of conduct.

  1. Countrywide pressured borrowers into unsuitable home loans.
  2. Countrywide materially increased loan costs at closing and switched the promised fixed rate into a variable rate loans.
  3. Americanize engaged in deceptive and predatory lending practices
  4. Bank of America reneged on promise it made to some home buyers by failing to comply with the bank’s “No Fee Modification Plan.”
  5. Countrywide schemed with appraisers to artificially inflate home prices. [Editor’s Note: This is a big one. By artificially increasing liquidity (i.e.., available money) into targeted geographical areas the scope of the fraud expands from individual homes to entire markets. By creating a “fraud upon the market” they create “plausible deniability” in the inflated appraisals because the comparable data is actually present to “support” the inflated appraisal. But the comparable data was inflated by artificially pumping money into a system and making it available under terms that appeared affordable. People forget that prices go up for one of TWO reasons — increased demand for housing (which never happened) due to increases in population etc. and increased liquidity (easy money). Either one will make prices appear to rise. As it turns out, increased liquidity has a geometrically higher impact on apparent asset values than consumer demand. See the Schiller (not Case Schiller) index which removes inflation from hosing prices and views the last 120 years of prices. Until 2001 they were always within range or explainable by various real external events. Then the prices rose as though propelled by a rocket in a manner and scope never seen before on any graph or analysis.]
  6. Countrywide severely damaged appraisers by blackballing them unless those appraisers issued Countrywide friendly appraisals. [Editor’s Note: Until securitization of mortgages a lender wanted to make absolutely sure that the property was worth what the buyer/borrower was paying for it. When securitization of loans kicked in the paradigm was turned on its head. Since the “lender” was a pretender lender and not using their own money and not booking the transaction as a loan receivable where they were assuming any risk, they now wanted to make sure the transaction was completed so the “lender” would receive its fee for standing in on a table-funded loan. The big change was that they had absolutely no motivation to verify the appraisal — quite the reverse. In order to meet their promise of providing “inventory” to Wall Street they needed to expand the apparent value of the homes because the unit count or number of transactions was trailing off, as Brad Keiser points out in our CLE workshops. So during this wild period they didn’t actually care what the property was worth, since all they needed was an “appraisal” that made the property APPEAR to be worth a certain amount of money, thus defrauding both borrowers and the investors who put up the money.]
  7. Countrywide rigged home appraisal process to inflate price Washington state homeowners paid for an appraisal. [Editor’s Note: examine the settlement documents carefully. You will usually find that the appraisal fee was either split or entire swallowed by a subsidiary or affiliate controlled by the pretender lender]
  8. Wells Fargo might be requiring home purchasers or those consumers refinancing a home to use Wells Fargo’s appraisal subsidiary Rels Valuation, then Wells Fargo requires the homeowner to pay an inflated fee for the appraisal.
  9. Richmond American Homes and Countrywide may have engaged in a scheme to artificially inflate the appraised value of homes build by Richmond American Homes.
  10. KB Homes, Countrywide and Landsafe might have conspired to rig home appraisals in KB developments causing homeowners to pay upwards of $20,000 over the true value of the homes. [Editor’s Note: My observation, non-statistical, is that this pattern of conduct was the prevailing way business was done. The developer would raise prices, and then appraisers would use the asking prices of the developers as their “comparables.” This made the appraisal always fit. It would be interesting to note how often the appraisal verified the contract before securitization and what the rate appraisals were accepted after securitization.]
  11. Countrywide improperly charging prepayment fee when homeowner sells house to third party.
  12. Countrywide charging excessive and illegal fees during foreclosure process.
  13. Large Banks and MERSCORP charge excessive fees during foreclosure process.
  14. New Century engaged in fraudulent origination practices in the home loan market.
  15. Novastar tricked homeowners into paying excessive fees and purchasing risky loan products. [Editor’s Note: The use of the term “purchase” applies to the borrower as well as the investor. In fact, based upon my analysis, the borrower’s transaction had mroe characteristics of a securities transaction and a securities issuance scheme than it did a loan].
  16. Chase Manhattan Mortgage part of scheme to fraudulently sell overpriced homes to consumers in Poconos Mountains
  17. Chase Home Finance illegally failed to properly apply prepayments by homeowners to the outstanding loan balance.
  18. Chase failed to promptly credit homeowners for prepayments on the consumers home loan.
  19. Large mortgage lenders discriminated against African-Americans by charging them higher fees and interest rates than similarly situated Caucasians.
  20. Amerifirst might have made unlawful pre-recorded calls to residential phone lines without their prior consent
  21. JPMorgan Chase Bank may an illegal closing fee at the closing of a residential real estate sale.
  22. JPMorgan may have been involved in a conspiracy to sell homes in Pocono Mountain area at inflated values
  23. Litton Loan servicing might not properly service adjustable rate home loans causing borrowers to pay more than owed.
  24. American Home Mortgage Servicing might improperly service adjustable rate home loans which may have the affect of causing borrowers to pay more than is owed.
  25. EMC Mortgage Corporation might overcharge customers when servicing adjustable rate mortgages.
  26. Countrywide improperly used deceptive disclosures when selling Option ARM loans to borrowers.
  27. EMC Mortgage Corp. might unlawfully service home loans.
  28. Homecomings Financial when servicing home loans may be unlawfully charging unneeded and excessive fees to customers.
  29. National City may fail to properly credit mortgage payments which generates unwarranted late fees
  30. Litton Loan Servicing may be improperly servicing home loans.

13 Responses

  1. Is there a class action suit against Quicken Loans.
    My husband and I would like to be included, as well as our daughter. We’ve each been scammed out of $500 “good faith deposit” along with hundreds of others on the internet.

  2. How about a CLASS ACTION again BANK OF AMERICA for charging OVERDRAFT FEES THAT FAR EXCEED THE AMOUNT OF THE OVERDRAFT– effectively loan sharking under the guise of it being “a fee”

  3. None of it surprises me, my loan originated with New Century and they screwed me over royally, by saying on the phone it was all inclusive (taxes and insurance) when it WASN’T written up that way. They also tried to get me to create stuff that didn’t exist, which I refused to do. Finally, though they were to file a homestead when I refinanced they NEVER did it, leaving me in harms way. It is outrageous and then I was sent from the fire to frying pan, when Litton took it over. When are these people going to be held accountable for what they are doing to homeowners?

  4. How about Litton Loan Servicing deliberately STALLING on finalizing home loan modifications? By denying they have documents they at other times AGREED they had. By waiting late into the trial modification to request documents they either: 1) do not actually need or 2) aren’t even entitled to.

    Get this one, for folks whose taxes and house insurance ISN’T paid to Litton, once you apply for a loan modification they come up with this “CONTRACTUAL MONTHLY PAYMENT” which includes the original amount you were to pay, plus, monthly taxes and homeowners insurance costs– they THEN seem to say that they will take the difference between WHAT YOU PAY FOR THE TRIAL MODIFICATION AMOUNT and THAT NEW CONTRACTUAL AMOUNT , for EVERY MONTH YOU WERE ON THE TRIAL and tack that ONTO THE AMOUNT THEY ARE OWED. Interesting, so I PAY my OWN house insurance premium monthly, during the ENTIRE LOAN MODIFICATION TRIAL, but then Litton Loans get to make me REPAY LITTON FOR THAT RETROACTIVELY, for a bill they haven’t even been covering on my behalf for four months? Wow, talk about the NEW MATH!

  5. From Courthouse News

    Class Claims Lenders Destroyed Mortgage Records
    ALBANY (CN) – Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action.
    “To cover up the servicing mistakes and fraud and misrepresentation in the servicing of a consumer escrow, Defendants ‘recreate’ letters, insert data as they see fit, and fail to produce the entire HUD complaint form. This way, a consumer is left in the dark about the fraud that occurred to them,” the complaint states.
    Lead plaintiff Kim Gorham says that when she sent a letter seeking information about her escrow account, she was informed that it had been “destroyed by a letter opener.”
    After repeated requests, Gorham, who is blind, received her purported escrow analysis, but it was “100 percent illegible,” according to the complaint. The defendants knew that Gorham was legally blind, the complaint states.
    She says that getting a “clear and concise” statement from the defendants has been an “impossible task.”
    Countrywide routinely responded to customers’ requests for records by claiming they were “unavailable or destroyed,” according to the complaint.
    Gorham says a Countrywide lawyer wrote her that copies of her escrow statements and analyses were “not retained.”
    Statutory law requires that such records be kept for 5 years, the plaintiffs say.
    Mortgage servicers have a “statutory duty to send consumers an annual escrow analysis and statement, advising the consumer of their escrow, monthly payment, and how it is calculated based on taxes,” the class claims.
    The information is especially important with an escrow addition to a mortgage, which “throws consumers off,” as principle and interest tend to fluctuate.
    The class is estimated at 10,000. They claim the documents they received from the subprime lender were “incorrect or incomplete.” The records allegedly were tailored to cover up misrepresentations, and to “ward off lawsuits such as the instant one.”
    BAC Home Loans is also named in the complaint.
    BofA acquired Countrywide in 2008 for $4.1 billion. Federal officials are investigating Countrywide for claims that it misrepresented losses on subprime mortgages.
    Records in this complaint allegedly were destroyed in an attempt to suppress damaging information.
    The class seeks damages for RICO violations, conspiracy and failure to produce records.
    They are represented by Richard L. DiMaggio of Glenville, N.Y.

  6. Great post, I found it useful information on this site and relationship with my blog…thanks

  7. FYI – Hager and Hearne, Reno, NV (775) 329-5800 stop taking members in the Class Action two weeks ago. However, they will take on individuals on retainer.

  8. Does anyone know of a class action suit agianst Mers in CA. After all it was found illegal in 2002 and “lenders” used it still to create tis fraud.

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  10. Is anyone putting together a class action against Auroa Loan Services

  11. We are working on putting together a class action against Wells Fargo. Anyone interested may call Robert at 860-599-5557. Neil is correct, the tide is turning and people are waking up and taking charge of their lives and property.

  12. I am interested to know if there is a class action of Wachovia for all of the old World Savings (pic-a-pay)
    Neg-Am Arm toxic loans? They are certainly not trying to help their customers to avoid foreclosure by doing a fair loan mod. Check out this forum…

  13. Again-one can go to the Stanford Law Securities Class Action website and peruse through some of the complaints by investors in certain companies.

    In the case of New Century, the CWs (confidential witnesses) who are former employees, are quoted as stating they routinely typed into their underwriting system ‘fake’ salaries for people who were applying for a home loan. Usually, the amount was $22,000 per MONTH!! not year….MONTH!! was the income needed to quailify even a gardener for the loan!!

    Also, search for and read the MIssal Report, ordered to be produced by Judge Carey in Delaware for the BKR11 of New Century Mortgage and HOME123.
    It is laden with what occurred at that company.

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