|Borrowers Sue Foreclosure Attorney, Lenders
Class action alleges borrowers lost homes because of attorney fees
January 12, 2005
|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.
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