Borrowers Allege Closing Documents Forged

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1 · 24 · 08

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.

The suit, filed recently in federal court in Reno by Frank and Karen Stoffels, targets GRP Financial Services Corp., which they say uses a sales pitch that it will protect the reputations of fraudulent loan originators “by proceeding with foreclosure of those fraudulent and toxic loans in the name of GRP specifically in order to take the focus off of the loan originator.”

The plaintiffs allege that they executed closing documents that provided for the payment of their outstanding credit card debt directly from escrow, but that the documents were fraudulently altered, including a “cut-and-paste” of their signatures onto a bogus settlement statement. But when they discovered that their credit cards had not been paid off, and that over $20,000 in fraudulent fees had been assessed, they attempted to contact the lender and got no response.

The Stoffels say that they were finally contacted by GRP and told that it now owned the loan and that it was not responsible for any fraud they alleged against the originating lender. GRP allegedly refused to investigate the Stoffels’ claims of fraud and initiated foreclosure proceedings.

The suit includes claims of violation of various federal statues, including the Truth In Lending Act, the Real Estate Settlement Procedures Act, and the Fair Housing Act.

The Stoffels also seek damages for conspiracy to commit fraud and conversion, and intentional and negligent infliction of emotional distress, as well as an injunction against foreclosure.

The complaint seeks class certification on behalf of borrowers “who are victims of the defendants GRP who acquired fraudulently originated and ‘scratch-and-dent’ loans and enforce the terms of those loans with full knowledge of the fraud committed in the origination of these loans.”

Frank Stoffels and Karen Stoffels v. GRP Financial Services Corp., GRP Loan, LLC, and IndyMac Financial Services
No. 08-CV-468 (D. Nev.)

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