Mortgage Daily Logo
mortgage news from industry experts

Borrowers Sue Foreclosure Attorney, Lenders

Borrowers Sue Foreclosure Attorney, Lenders

Class action alleges borrowers lost homes because of attorney fees

January 12, 2005

By PATRICK CROWLEY

A group of low income homeowners have banded with a community nonprofit group to take on a Louisiana law firm and a group of mortgage lenders in court.In a lawsuit filed in New Orleans Civil District Court, the homeowners allege that the Dean Morris law firm of Monroe, La., has been charging fees so high in potential foreclosure cases that some people have been forced from their homes, according to a community activist that has been working with the homeowners.

“People have lost their homes. Others have fallen behind on their mortgage payments because of high attorneys fees,” Gwen Dixon of the Youth & Adult Enrichment Network in New Orleans, told MortgageDaily.com. “Most are people of color, the elderly and women.”

A total of 19 homeowners have joined the class action lawsuit against Dean Morris. Dixon, who helped gather information and identify homeowners for the suit, said it alleges that the firm inflated costs and fees for homeowners who were facing foreclosure but trying to get caught up on their payments.

The mortgage companies are named because they hired Dean Morris to deal with the homeowners that had fallen behind in payments, Dixon said.

“The big problem…is that people could get caught up on their mortgage but then they have to pay these fees as well,” she said.

The Dean Morris law firm could not be reached to comment.

The New Orleans Times-Picayune published a story saying the firm reportedly declined to comment on any specifics but said it is “confident that any action undertaken by it in the course of representing its clients in pending litigation were reasonable and appropriate exercise of the professional duties owed to its clients, and in complete compliance with the law.”

Dixon said she has been working with homeowners on the situation for more than two years.

The first homeowner came to her after she had fallen behind on her mortgage and filed bankruptcy because of thousands of dollars in fees she had been charged by the law firm.

“There was no way to bring her payments current…because of the fees,” Dixon said.

When the homeowner tried to make payments on her mortgage, her lender would not accept the payments and instead told her to contact Dean Morris attorneys.

When the homeowner couldn’t make the payment, the mortgage company and Dean Morris sued her.

“They were already filing suit before having all the information about the case,” Dixon said.

The pattern continued for other homeowners. Dixon began noticing the similarities in instances where people were losing their homes or being threatened with foreclosure. She finally talked to lawyers who asked her to help organize the class action lawsuit.

“If the attorney’s fees weren’t so high and the mortgage companies would work with (the homeowners), homes could be saved,” Dixon said.

One of the homeowners involved in the suit is fighting a foreclosure right now, she said.

“But the fees are so high that people just can’t come out of it, so some will definitely lose their house. It’s just a matter of time,” Dixon said.


Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: pcrowley@enquirer.com

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION