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Mortgage Fraud Lawsuits
Third Quarter 2008 Mortgage Litigation Report |
| Cases involving mortgage fraud, flipping, identity theft and inflated appraisals. |
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Defendant
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Plaintiff
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Court
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Amount
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Overview
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Case Title
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Case Number
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Date Filed | Link to Story |
| 1st American Inc. and owner Eric Otterholt | Oregon Division of Finance and Corporate Securities | na | $26,000 in fines were suspended | Portland-based 1st American Inc. and owner Eric Otterholt were ordered to cease and desist from unethical practices and failing to supervise. The action was prompted by an originator at the company who provided inaccurate loan documents that indicated more funds were available than what actually occurred. | na | na | na | www.mortgagedaily.com/OregonLicenses081408.asp |
| Allegiance Mortgage LLC and Brian Fallini | Oregon Division of Finance and Corporate Securities | na | $50,000 fine | A cease-and-desist order was issued against Allegiance Mortgage LLC. In addition, the mortgage broker’s lending license was revoked and the company, along with owner Brian Fallini, was fined $50,000. | na | na | na | www.mortgagedaily.com/OregonLicenses081408.asp |
| Countrywide Financial Corporation, Countrywide Home Loans Inc., and Countrywide Home Loans Servicing LP | State of Connecticut, Attorney General and Commissioner of Banking | Superior Court, Judicial District of Hartford | Civil penalties of up to $100,000 per violation, up to $5,000 per violation of state consumer protection laws, restitution for the borrowers and give back ill-gotten gains. | The Connecticut Attorney General alleges overcharging, mortgage fraud and poor underwriting by Countrywide. | State of Connecticut v. Countrywide Financial Corp., et al. | na | July 28, 2008 | www.mortgagedaily.com/LawsuitCountrywideCt080608.asp |
| Countrywide Financial Corporation, et al | People of the State of California (by City of San Diego) | San Diego Superior Court | na | San Diego accuses Countrywide of engaging in a “pattern of unlawful, fraudulent or unfair predatory real estate lending practices.” The alleged activities have left a number of the city’s residents facing foreclosure. | People v. Countrywide Financial Corp., et al. | na | July 23, 2008 | www.mortgagedaily.com/LawsuitSanDiegoCountrywide072308.asp |
| Countrywide Financial Corporation, et al | Office of the Attorney General, State of Florida | Circuit Court of the Seventeenth Judicial Circuit, Broward County | na | Florida Attorney General Bill McCollum announced another lawsuit against Countrywide and its legendary founder, Angelo Mozilo, claiming the company deceived borrowers into signing risky loans. | “Office of the Attorney General, Department of Legal Affairs, State of Florida v. Countrywide Financial Corporation, et al | No. 08 30105 03 | June 30, 2008 | www.mortgagedaily.com/CountrywideSale070108.asp |
| Countywide Home Loans, Inc. and Countrywide Financial Corp. | State of Indiana | Steuben County Court | $15,500 per violation, plus voiding of loans and/or prepayment penalties. | An investigation by Indiana’s attorney general has led to a lawsuit against Countrywide, which alleges mortgage fraud and customer deceit. | Indiana v. Countrywide Financial Corp., et al. | 493710-1 | na | www.mortgagedaily.com/LawsuitCountrywideIn082508.asp |
| Domestic Bank, Intervale Mortgage Corp. | Office of Thrift Supervision | na | $1.8 million | The Office of Thrift Supervision issued a Cease-and-Desist order and an Order of Assessment of a Civil Money Penalty against Domestic Bank and its mortgage lending subsidiary Intervale Mortgage Corp. | “In the Matter of Domestic Bank, Cranston, Rhode Island, (OTS No. 13964) and its Subsidiaries, including Intervale Mortgage Corporation, Cranston, Rhode Island | Order No.: NE-08-07 and Order No. NE-08-08 | June 30, 2008 | www.mortgagedaily.com/FineDomesticBank071508.asp |
| First Call Mortgage Company, Inc. | Commissioner of Banks, Mortgage Lender & Mortgage Broker Licensing, Commonwealth of Massachusetts | na | na | Mortgage regulators in Massachusetts have issued cease-and-desist orders against four reverse mortgage companies. Among the charges were mortgage fraud, deceptive advertising and failure to comply with reverse lending requirements. | In the Matter of First Call Mortgage Company, Inc. | 2008-020 | na | www.mortgagedaily.com/MassReverseLenders092508.asp |
| GRP Financial Services Corp., GRP Loan, LLC, and IndyMac Financial Services | Frank Stoffels and Karen Stoffels | U.S. District Court for the District of Nevada | na | A Nevada couple alleges that they are the victims of fraudulent lending practices by IndyMac Financial Services and a scheme to shield IndyMac from liability by transferring the fraudulent mortgage to a knowing purchaser to foreclose on the loan. Lawyers in the case allege compliance violations and seek class action certification. | Stoffels v. GRP Financial Services Corp., et al. | 08-cv-468 | na | www.mortgagedaily.com/WbskLawsuitIndymac092408.asp |
| IndyMac Bancorp, Inc and IndyMac Bank, F.S.B. | Virgen Cedeno | U.S. District Court for the Southern District of New York | na | A recent ruling by a federal judge in Manhattan dismissed class-wide claims against failed IndyMac Bancorp, declining to hold it liable for alleged inflated appraisals. Violations of the Real Estate Settlement Procedures Act and the Truth in Lending Act were alleged. | Cedeno v. IndyMac Bancorp, Inc., et al. | 06-CV-6438 | na | www.mortgagedaily.com/WbskLawsuitIndymac092208.asp |
| James C. Platts, Easy Realty Solutions Inc., Guaranteed Results Co., and Easy Realty Solutions LLC | Allegheny County Court of Common Pleas | Allegheny Court of Common Pleas | $3.6 Million | A Pennsylvania man has been ordered to release liens on more than 100 illegal second mortgages and return more than $2 million in illegal fees. | James C. Platts and his companies, Easy Realty Solutions Inc., Easy Realty Solutions LLC (doing business as Fieldstone Real Estate Co.) and Guaranteed Results Company | na | November 15, 2007 | www.mortgagedaily.com/JudgmentEasyRealty091808.asp |
| Mid Atlantic Capital, LLC | First Franklin Financial Corporation | U.S. District Court for the District of New Jersey | na | Mid Atlantic is accused of submitting seven fraudulent loans files for more than $2.2 million that resulted in losses of more than $1.0 million. | First Franklin Financial Corp. v. Mid Atlantic Capital LLC | 1:07-cv-04398-JEI-AMD | September 7, 2007 | www.mortgagedaily.com/ClosureMidAtlantic091908.asp |
| Nationstar Mortgage, LLC, et al. | Mark Richter, et al. | San Diego Superior Court | Plaintiffs seek compensation for ruined credit, restitution for lost money and the rescission of all debt owed to Nationstar. Attorney’s fees, court costs and an award of $25,000 per plaintiff is also sought. | Nationstar Mortgage LLC has been sued over allegations that one of its star branch managers prodded borrowers into bad investments, committed mortgage fraud and failed to maintain proper compliance. The company is also accused of operating without a license. | Richter v. Nationstar Mortgage, LLC | 37-2008-00092170-CU-BT-CTL | September 22, 2008 | www.mortgagedaily.com/LawsuitNationstar092908.asp |
| Perry | United States of America | na | na | Financial institutions ignored red flags that led to identity theft. | United States v. Perry | na | na | www.mortgagedaily.com/Technology070808.asp |
| Prajna Group Inc., petitioner | Prajna Group Inc., petitioner | U.S. Bankruptcy Court for the Western District of Kentucky | na | A Kentucky mortgage company that filed for bankruptcy liquidation is accused of defrauding lenders it sold loans to. | In re Prajna Group, Inc., dba Liberty Mortgage Funding | 08-33673 | August 20, 2008 | www.mortgagedaily.com/ClosureLibertyMortgage091008.asp |
| The Mortgage Specialists Inc | Commonwealth of Massachusetts Commissioner of Banks | na | na | In a July 31 cease-and-desist order from Massachusetts’ Commissioner of Banks, the state said an examination found The Mortgage Specialists falsified asset and income information on three residential loan transactions. | In the Matter of the Commonwealth of Massachusetts Commissioner of Banks and The Mortgage Specialists Inc., Plaistow, New Hampshire | No. 2008-015 | July 31, 2008 | www.mortgagedaily.com/MortgageSpecialistsOrder081908.asp |
| The Mortgage Specialists Inc., Michael Gill, Lisa Tracy, jean Duerr, and David Caillouette | State of New Hampshire Banking Department | na | $400,000 | The New Hampshire Banking Department has entered into a consent order with The Mortgage Specialists Inc. Also listed in the order were the company’s owner Michael Gill and its compliance officer Lisa Tracy. | In re the Matter of: State of New Hampshire Banking Department, Petitioner, and The Mortgage Specialists Inc. Michael Gill, Lisa Tracy, jean Duerr, and David Caillouette, Respondents | No.: 08-223; | July 23, 2008 | www.mortgagedaily.com/MortgageSpecialistsOrder081908.asp |
| Williams | United States of America | na | na | Financial institutions ignored red flags that led to identity theft. | United States v. Williams | na | na | www.mortgagedaily.com/Technology070808.asp |
