Class Actions Being Investigated

People have been asking about class actions. With a little bit of help at www.classadvocate.com 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.

Tags: borrower, brad keiser, countrywide, disclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, lost note, predatory lending, rescission, RESPA, securitization, trustee, Wells Fargo
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