The financial ties that many judges have to banks raise questions about conflicts of interest and a bias against homeowners victimized by mortgage fraud.

East Bay Express-

In early 2006, as California’s real estate bubble was beginning to burst, an elderly Los Angeles couple, Fannie Marie and Milton Gaines, fell behind on their mortgage payments and received a notice of default from their lender, Countrywide Home Loans. Hoping to avoid foreclosure, the couple agreed to a plan suggested by Countrywide: They would obtain a loan modification provided by a third party, a businessman named Joshua Tornberg. What the Gaineses didn’t know, however, was that Tornberg was the fiancée of the Countrywide employee who made the recommendation. And instead of saving the Gaineses’ house, Tornberg scammed the elderly couple, recorded an altered deed, and extracted $240,000 from the property before walking away, according to court documents.

Then things really went to hell. In August 2006, Milton Gaines died, leaving his wife to battle two banks, a title company, a mortgage servicer, and Tornberg. Fannie Marie Gaines filed suit against Countrywide, Tornberg, and others involved in the fraud. Then, in 2009, she passed away, too, but their son pressed forward with the lawsuit.

The case, however, was tied up in Los Angeles County Superior Court for six years as Countrywide and the other defendants filed counter-motions and stalled. Countrywide eventually reached a settlement with the Gaines family, but the company’s actions, and the alleged fraud its employee initiated, remained central to the case against the other defendants. Further, mediation with those defendants — Fidelity National Title Company, Lehman Brothers bank, Aurora Loan Servicing, and Tornberg — ultimately failed. In August 2012, a superior court judge dismissed the case on a legal technicality: It had taken more than five years to come to trial. The Gaineses’ lawyers appealed, but two Second Appellate District Court judges denied the appeal, tallying yet another victory for the banking industry.

[EAST BAY EXPRESS]

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