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Commissioners: Bristol County, MA joining Norfolk, Plymouth counties in filing suits against MERS

Commissioners: Bristol County, MA joining Norfolk, Plymouth counties in filing suits against MERS


Taunton Gazette-

The Bristol County Board of Commissioners received a letter from Attorney Garrett Bradley notifying them that a complaint against Mortgage Electronic Registration Systems (MERS) was filed in Suffolk County on March 29.

Previously, the commissioners voted on Feb. 14 to file a lawsuit to reclaim millions of dollars from MERS for allegedly skirting public recording laws at the expense of the county’s three property registries.

Bristol County is joining Norfolk and Plymouth counties in filing lawsuits against MERS.

Commissioners have previously said the county won’t know exactly how much money they are looking to collect until the discovery process of litigation.

Read more: [TAUNTON GAZETTE]

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Bristol County, MA commissioners vote to participate in suit against MERS

Bristol County, MA commissioners vote to participate in suit against MERS


HERALD NEWS-

The Bristol County Board of Commissioners moved on Tuesday to file a lawsuit to reclaim millions of dollars from Mortgage Electronic Registration Systems, commonly known as MERS, for allegedly skirting public recording laws at the expense of the county’s three property registries.

Commissioner John Mitchell said Bristol County is joining with Norfolk and Plymouth counties in filing lawsuits against MERS.

“MERS has hidden all the assignment of mortgages,” Mitchell said. “This (lawsuit) is to get fees back for the recording of assignments of mortgages. You don’t know how many times they did it. They did it privately. Supposedly, somewhere, this MERS has a registry of their own assignments of mortgages which show who is the true owner of a mortgage, except I guess in practice they don’t really have it. And that’s been a problem with foreclosures. When a bankruptcy court says, ‘Who owns the mortgage now?,’ they haven’t always been able to come up with it.”

Mitchell said it has been a “substantial” problem, but the county won’t be sure about how much money they are actually looking to collect until the discovery process of litigation — rough estimates put together by county registries last year indicate that the loss of revenue ranges well into the millions of dollars.

[HERALD NEWS]

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Lawsuit: Chase And Wells Fargo Overcharged Homeowners As Much As 300% On Mortgage Fees

Lawsuit: Chase And Wells Fargo Overcharged Homeowners As Much As 300% On Mortgage Fees


Business Insider-

Yet another class action suit with the potential to reap millions for consumers has been filed against a pair of the country’s biggest mortgage lenders.

This time, Wells Fargo and Chase have been fingered over allegedly deceptive mortgage default fee practices, law firm Baron and Budd announced. 

The suit claims the lenders charged homeowners over inflated fees once they began to fall behind on mortgage payments

[BUSINESS INSIDER]

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Nichols Kaster PLLP Files Class Action Against GMAC Mortgage and Balboa Insurance Services for Illegally Backdating Insurance Policies and Charging for Worthless Coverage

Nichols Kaster PLLP Files Class Action Against GMAC Mortgage and Balboa Insurance Services for Illegally Backdating Insurance Policies and Charging for Worthless Coverage


Fort Lauderdale, FL (PRWEB) November 14, 2011

On November 14, 2011, Plaintiff Christine Ulbrich filed a nationwide class action lawsuit against GMAC Mortgage, LLC and Balboa Insurance Services, Inc. in the United States District Court for the Southern District of Florida. The lawsuit alleges that GMAC and Balboa illegally backdated force-placed insurance policies and charged borrowers for insurance coverage that was, in some cases, expired on the day it was purchased. The suit also alleges that GMAC and Balboa charged borrowers inflated premiums that were as much as 14 times the market rate. According to Plaintiff’s attorney, Kai Richter, “The whole point of insurance is to protect against future risks. Forcing borrowers to buy expired insurance at inflated premiums is inexcusable.”

The Complaint alleges that GMAC force-placed a windstorm policy on Ulbrich’s property in March 2011, which was backdated for the period from October 1, 2009 to October 1, 2010, and charged Ulbrich almost $10,000 for this already-expired coverage. The lawsuit further alleges GMAC sent Ulbrich a renewal notice on the very same date, stating that “the windstorm insurance coverage we placed on your account has expired,” and then force-placed a second windstorm policy on her property in April 2011, which was backdated by more than six months and cost more than $9,600. According to the Complaint, Ulbrich’s mortgage payments skyrocketed from $1,227.52 per month to $2,695.59 per month after GMAC purchased this backdated coverage, due to an alleged “shortage” in her escrow account. GMAC is now threatening to foreclose on her home because she cannot afford the increased payments, even though she previously was current on her mortgage.

“It is outrageous to drive homeowners into foreclosure by force-placing backdated insurance coverage on their property and charging them inflated premiums for expired coverage,” said Richter. “GMAC received billions of dollars in bailout money from taxpayers, and this is no way to say ‘thank you,’” continued Richter.

In her class action Complaint, Ulbrich seeks relief on behalf of herself and other similarly-situated GMAC borrowers across the country. Ulbrich asserts claims against GMAC for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, and violation of the Florida Deceptive and Unfair Trade Practices Act. In addition, Ulbrich also asserts an unjust enrichment claim against Balboa, which allegedly accepted premiums for backdated policies and allegedly paid a kickback to GMAC in return.

The case is entitled Ulbrich v.GMAC Mortgage, LLC and Balboa Insurance Services, Inc., No. 0:11-cv-62424 (S.D. Fla.). Plaintiff is represented by Kai Richter, Michelle Drake, and Timothy Selander from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California, and is currently pursuing several other cases against major banks for wrongfully force-placing insurance on borrowers, including JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., and RBS Citizens, N.A. (also known as Citizens Bank), and U.S. Bank, N.A.. Additional information is located at http://www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.

###

Read the full story at http://www.prweb.com/releases/2011/11/prweb8964133.htm

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U.S. Bank calls for court to hear MERS class-action suit

U.S. Bank calls for court to hear MERS class-action suit


Highly recommend that if anyone wants to go after MERS, you first read STATE OF DELAWARE v. MERSCORP, Mortgage Electronic Registration Systems, Inc., (MERS) to get familiar with some specifics. 

 

Observer- Reporter

U.S. Bank National Association has asked U.S. District Court to hear a class-action suit, filed by Washington County on behalf of all counties in the state, over the association’s failure to use the recorder of deeds offices to record mortgages, denying counties the related fees.

Washington County first took the case to Washington County Court, but the bank is now seeking a change in jurisdiction. The county alleges that more than $100 million has been lost in recording fees by all 67 counties in the state.

The county alleges U.S. Bank National Association, as trustee for various residential mortgage-backed security trusts, violated state law by failing to record “each and every mortgage transfer.”

The bank instead used a private entity, Mortgage Electronic Registration Systems Inc., for recording, “thereby depriving Washington County of the accompanying recording fees” for 15 or more years.

[OBSERVER-REPORTER]

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JIM FULLER, CLERK OF THE COURT, DUVAL COUNTY, FLORIDA vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), MERSCORP

JIM FULLER, CLERK OF THE COURT, DUVAL COUNTY, FLORIDA vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), MERSCORP


IN THE CIRCUIT COURT, FOURTH
JUDICIAL CIRCUIT, IN AND FOR
DUVAL COUNTY, FLORIDA

JIM FULLER, CLERK OF THE CIRCUIT
COURT, DUVAL COUNTY, FLORIDA,
in his official capacity and on behalf of
all those similarly situated,

Plaintiff,

vs.

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., a Delaware corporation; and
MERSCORP, INC., a Delaware Corporation

Defendants.

[ipaper docId=72570476 access_key=key-2j0q77ii32icyuhv6dnf height=600 width=600 /]

 

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Ka-Booom! Florida Clerk, Jim Fuller of Duval County Sues MERS

Ka-Booom! Florida Clerk, Jim Fuller of Duval County Sues MERS


This is major and pay close attention to the words below

Mortgage Servicing News-

The most recent lawsuit was filed by a county clerk in Florida, and seeks class action status to represent the state’s 67 counties. The complaint alleges the use of MERS does not comply with state property laws and has cost municipalities millions in unpaid recording fees.

Jim Fuller, the clerk of Duval County, filed suit against Merscorp Inc. and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc., on Oct. 31, claiming civil conspiracy, unjust enrichment, as well as fraudulent and negligent misrepresentation. The suit also seeks a hearing to determine the validity of tracking note transfers on the MERS System and a court injunction to prohibit the use of MERS in Florida.

“MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system,” the suit, filed in state circuit court, reads.

[…]

Both the note and mortgage are to be recorded. The principle issue we’re trying to get at is the punitive distinction of MERS being the mortgagee while the note is shifted from one to another up through the typical securitization process,” Volpe said in a phone interview. “The principle concern about the disconnect is that the public records are not complete insofar as the true beneficial owner of the mortgage is not reflected in the public records.”

[MORTGAGE SERVICING NEWS]

 

[ipaper docId=72570476 access_key=key-2j0q77ii32icyuhv6dnf height=600 width=600 /]

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MERS Registry Targeted by Local Land Offices Over Lost Fees

MERS Registry Targeted by Local Land Offices Over Lost Fees


I can tell you that this is ONLY the beginning… stay tuned for others to come forward soon.

MERS is done, repeat done.

Nancy Becker – You Go Girl!

Bloomberg-

For Nancy J. Becker, recorder of deeds in Montgomery County, Pennsylvania, outside Philadelphia, property records are practically sacred. So much so that her office keeps digital copies of land records dating to 1784 in four separate databases, including one 1,700 miles (2,735 kilometers) away.

If the county seat were leveled tomorrow, she says, “I could still record documents on my laptop on the street corner with a card table.”

Becker may sound tech-savvy, but to some of her constituents’ dismay, she can’t always call up a property with a keystroke and see who holds its note. That’s because more than 200,000 of her records list the lien holder as MERS, the private service that acts as a proxy for banks that bundle and sell off mortgage securities. That can make it all but impossible for a recorder to determine who really holds the paper, Bloomberg Businessweek reports in its Nov. 7 edition.

[BLOOMBERG]

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Washington County, Pennsylvania Brings Class Action on behalf of PA’s 67 counties to Recover Recording “MERS” Fees Lost to Wall Street

Washington County, Pennsylvania Brings Class Action on behalf of PA’s 67 counties to Recover Recording “MERS” Fees Lost to Wall Street


IN THE COURT OF COMMON PLEAS OF WASHINGTON COUNTY, PENNSYLVANIA

Civil Division

COUNTY OF WASHINGTON,
PENNSYLVANIA, on behalf of itself and all
other similarly situated Pennsylvania Counties,

Plaintiff

vs.

U.S. BANK NATIONAL ASSOCIATION,

Defendant

[ipaper docId=70965013 access_key=key-168o3025pdbk6qyzs3ct height=600 width=600 /]

 

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Montgomery County, PA recorder of deeds Nancy Becker to File Lawsuit Against MERS

Montgomery County, PA recorder of deeds Nancy Becker to File Lawsuit Against MERS


Wait until the “BIG” states file one against MERS, et al. This is going to lead all the lawsuits against the banking industry.

Follow the paper and audit MERS. Go down the MERS-HOLE & You’ll find out, what really went down.


Phillyburbs-

Montgomery County’s recorder of deeds on Tuesday said she is going after about $15.7 million she claims is owed to the county by an electronic mortgage registry company and banks doing business with that company.

“I am filing a class action lawsuit against MERS (Mortgage Electronic Registry System) and the banks using MERS for failing to record certain mortgage assignments and, therefore, not paying the required fees,” recorder Nancy J. Becker said.

 Becker said the lawsuit will claim the failure to file these transfers with appropriate recorder offices is an attempt to illegally circumvent the payment.
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Cleveland County, Oklahoma commissioners hires firm to investigate MERS filings

Cleveland County, Oklahoma commissioners hires firm to investigate MERS filings


I am confident that many more counties will step up to the plate and demand their cut from all the revenue that has been lost due to the MERS artifice.


Norman Transcript-

Cleveland County commissioners on Monday hired a law firm to investigate whether a banking system systematically failed to pay mortgage filing fees to the county clerk.

Commissioners Rod Cleveland and Rusty Sullivan said national banking companies joined the Mortgage Electronic Registration System (MERS) Inc., a private enterprise that started in 1997, to handle records of mortgage transactions.

The problem, Cleveland said, is that “any time a mortgage is touched, any transaction at all, then there should be a filing fee paid to the county.”

[NORMAN TRANSCRIPT]

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CHRISTIAN COUNTY, WASHINGTON COUNTY (KENTUCKY) v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. (MERS) et al

CHRISTIAN COUNTY, WASHINGTON COUNTY (KENTUCKY) v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. (MERS) et al


UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION

CHRISTIAN COUNTY CLERK, by and through
its County Clerk, MICHAEL KEM;
WASHINGTON COUNTY CLERK, by and through
its County Clerk, GLENN BLACK; on behalf
of themselves and all others similarly situated,

Plaintiffs

v.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS
INC.; MERSCORP, INC,; BANK OF AMERICA, N.A.;
CCO MORTGAGE CORPORATION; CITIMORTGAGE, INC;
CORINTHIAN MORTGAGE COMPANY;
EVERHOME MORTGAGE COMPANY; GMAC RESIDENTIAL FUNDING CORPORATION;
GUARANTY BANK; HSBC FINANCE CORPORATION;
MERRILL LYNCH CREDIT CORPORATION;
NATIONWIDE ADVANTAGE MORTGAGE COMPANY;
SUNTRUST MORTGAGE, INC.;JPMORGAN
CHASE & CO.; WELLS FARGO BANK, N.A.; AND
WMC MORTGAGE CORPORATION,

Defendants

[ipaper docId=70276713 access_key=key-1ltvdkngodowjj0xtcpg height=600 width=600 /]

 

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Senator Tester wants Justice Department to investigate big banks for fraud, illegal fees on veterans’ mortgages

Senator Tester wants Justice Department to investigate big banks for fraud, illegal fees on veterans’ mortgages


“If true, this type of behavior is illegal and it’s un-American. There is no question about that.”

-Sen. Tester

(U.S. SENATE) – Senator Jon Tester is pushing the U.S. Justice Department to investigate the nation’s biggest banks for allegedly adding illegal fees to the home loans of veterans and their families.

A recently unsealed whistleblower lawsuit alleges that Bank of America, Wells Fargo, and J.P. Morgan Chase disguised fees that are specifically forbidden under VA rules on veterans’ home refinancing loans. 

Because these loans are guaranteed by the federal government, they are low-risk, leading to additional profits for the banks. But the Justice Department has so far declined to pursue the case.

In a letter to Attorney General Eric Holder, Tester called for the Justice Department to take up the case, saying defrauding veterans would be “illegal and Un-American.”

“I request that you investigate the full extent of these illegal activities, and provide my office with detailed information about the subsequent damages as well as the actions the Justice Department will undertake to prevent them from happening in the future,” Tester wrote Holder. “Despite what some of our nation’s largest banks may believe, the men and women who have honorably served our country deserve better than this. They have earned as much.”

Under VA rules, lenders may not charge veterans for attorneys’ fees or settlement closing fees when handling home loans. The lawsuit alleges that lenders instructed mortgage brokers to disguise these fees by combining them with other, permitted charges.

“Taking advantage of veterans who put their lives on the line—that’s something no Montanan and no American should stand for,” Tester said. “The Justice Department needs to protect not only the men and women who defend this country, but also the American taxpayers who guaranteed these loans. The actions of these banks deserve a close and thorough look from this Administration.” 

According to the lawsuit, more than 1.2 million VA home loans have been issued to veterans over the past 10 years, and as much as 90 percent may involve some degree of fraud. 

Tester is Montana’s only member of the Senate Veterans’ Affairs Committee. Earlier this year, he introduced a bill that increases the penalties for banks that violate the Servicemembers Civil Relief Act, which protects active duty troops from certain financial and legal hardships.

Tester’s letter to Attorney General Holder appears below.

###

October 11, 2011

The Honorable Eric Holder
Attorney General
Department of Justice
950 Pennsylvania Ave, NW, Suite 5111
Washington, DC 20530

Dear Attorney General Holder:

I write regarding the lawsuit recently unsealed in federal court which reveals that as many as 13 banks and mortgage firms imposed excessive, hidden and illegal fees on a number of our nation’s veterans and their families. Because these home loans were backed by the federal government, they were low-risk and led to additional profits for the banks. I am bothered by the fact that the Justice Department reportedly will not be taking on the case at this time. I request that you provide justification for this decision, and urge you to reconsider. I also request that you investigate the full extent of these illegal activities, and provide my office with detailed information about the subsequent damages as well as the actions the Justice Department will undertake to prevent them from happening in the future.

According to the lawsuit, these veterans were fraudulently charged millions in illegal fees through a Department of Veterans Affairs (VA) loan program through which they sought to lower their interest rates or shorten the terms of their mortgages. More than 1.2 million of these loans have been issued over the past 10 years, and as much as 90 percent may involve some degree of fraud.

In defrauding these veterans and their families with excess fees, the banks allegedly also benefitted by receiving hundreds of millions of dollars in loan guarantees from the VA. That resulted in better prices from the loans that banks and mortgage brokers sold to investors. And as more of these loans went into default or foreclosure, it was ultimately American taxpayers who were on the line.

If true, this type of behavior is illegal and it’s un-American. There is no question about that. Despite what some of our nation’s largest banks may believe, the men and women who have honorably served our country deserve better than this. They have earned as much. Nevertheless, this lawsuit comes on the heels of multiple settlements that have been reached in legal actions against banks that have illegally seized homes, overcharged and defrauded members of the U.S. military. This is an alarming trend that cannot stand. And it must not continue.

The men and women who are serving or have served in uniform should never have to struggle to receive the protections due to them and their families under law. At the same time, we owe it to hard-working taxpayers in Montana and across the country to recover any federal funds that have been lost through the illegal actions of unscrupulous actors. 

As the Department of Justice begins taking more aggressive steps to address this matter, I urge you to work with Congress in a close and productive manner.

I look forward to your response.

Sincerely,
(s)
Jon Tester

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Supreme Court to Consider Mortgage-Fees Lawsuit: FREEMAN v. QUICKEN LOANS

Supreme Court to Consider Mortgage-Fees Lawsuit: FREEMAN v. QUICKEN LOANS


Mortgage/ Securitization forensic auditors especially, may want to pay close attention to this case.

 

WSJ-

The U.S. Supreme Court agreed Tuesday to clarify the circumstances in which home buyers can sue mortgage lenders for allegedly charging them unearned fees during the closing process.

The case centers on a group of lawsuits from Louisiana in which borrowers alleged Detroit-based Quicken Loans Inc. charged them loan-discount fees but did not provide reduced interest rates in return.

Quicken Loans said the fees were legal and denied allegations that the fees were unearned.

[WALL STREET JOURNAL]

[ipaper docId=68427648 access_key=key-1r7xd2v6zu1h9ly4emyn height=600 width=600 /]

 

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The Banksters Strike Back- The Florida Foreclosure Fraud Foregiveness Act of 2012

The Banksters Strike Back- The Florida Foreclosure Fraud Foregiveness Act of 2012


Via: Matt Weidner

This is the Bad, Bad Bankster Fraud Forgiveness Act of 2012!

Have a read at some of the lowlights!

  • Once suit has been filed, the public interest is served by moving foreclosure cases to final resolution expeditiously in order to get real property back into the stream of commerce… (NO FOLKS, ONCE A SUIT HAS BEEN FILED OUR COURTS SHOULD BE FOCUSED ON UPHOLDING HUNDREDS OF YEARS OF LAW)
  • Section 57.105, Florida Statutes, (Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee) is repealed. (THE FRAUDCLOSING PLAINTIFFS ARE PAYING ATTORNEYS FEES FOR IMPROPER CONDUCT, THIS WOULD PROTECT THEM FROM PAYING FOR THEIR IMPROPER CONDUCT.)
  • Following dismissal of the foreclosure case, and upon request of the plaintiff, the clerk may return the original promissory note without need for further order of the court. (WHY, SO THE NOTE CAN BE SOLD TO A ZOMBIE DEBT COLLECTOR?)
  • In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment of foreclosure or to establish or re-establish a lien or encumbrance on the property in abrogation of the final judgment of foreclosure, the court shall treat such request solely as a claim for money damages and shall not grant relief which adversely affects the quality or character of the title to the property. (THIS IS A BIGGIE PEOPLE, THIS IS THE REAL BIG ONE HERE, THE GET OUT OF JAIL FREE CARD!)
  • After foreclosure of a mortgage based upon the enforcement of a lost, destroyed or stolen note, a person, not party to the underlying foreclosure action, who claims to be the Actual holder of the promissory note secured by the foreclosed mortgage, shall have no claim against the foreclosed property after it has been conveyed for valuable consideration to a person not affiliated with the foreclosing lender. (ANOTHER RED ALERT BIGGIE HERE, A TOTAL REWRITE OF EXISTING LAW)
  • In uncontested mortgage foreclosure proceedings, the court shall enter final judgment within 45 90 days from the date 0of the close of pleadings. (GOTCHA!)
  • Where the amount of principal and interest, exclusive of fees and costs, owed to a foreclosing lender equals or exceeds 120% of the just value of the property subject to
    foreclosure, as determined by the county property appraiser in the most recent certified tax roll, the foreclosing lender may elect to foreclose without a judicial sale of the property. (THIS HERE IS THE REAL THING, GOTCHA!, GOTCHA!, GOTCHA! WE DON’T NEED NO STINKIN’ JUDGES OR COURTS OR DUE PROCESS!)
  • In any mortgage foreclosure action, upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney. (REMEMBER ABOVE WHEN THEY ELIMINATED THEIR OWN LIABILITY FOR ATTORNEY’S FEES IF THEY WERE CAUGHT? WELL, THEY ADDED FEES AGAINST DEFENDANTS.  THIS PUNITIVE SECTION WILL PREVENT ANY CONSUMER FROM HAVING ANY ATTORNEY REPRESENT HIM IN COURT.)

AND WHAT CAN YOU DO TO FIGHT AGAINST IT?

(FILL OUT THE PETITION HERE)

~

~

2011+draft+sent+to+bill+drafting

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UNFREAKINGBELIEVABLE | Fannie Mae seeks $5.1 billion more from taxpayers

UNFREAKINGBELIEVABLE | Fannie Mae seeks $5.1 billion more from taxpayers


The gift that keeps on giving…perhaps they should get the fees from their very own MERS, which took away from the counties and taxpayers?

(Reuters) –

Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

The largest U.S. residential mortgage funds provider on Friday also reported a second-quarter net loss attributable to common shareholders of $5.2 billion, or 90 cents per share.

Including the latest funding request, Fannie Mae has needed $104 billion in government capital injections since the U.S. Treasury seized control of it in 2008 during the financial crisis. Fannie Mae has paid back $14.7 billion in dividends.

[REUTERS]

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READ | Letter from Representative Elijah E. Cummings to Darrell E. Issa re: Foreclosure Fraud, Subpoenas

READ | Letter from Representative Elijah E. Cummings to Darrell E. Issa re: Foreclosure Fraud, Subpoenas


June 21, 2011

The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

Today marks the six-month anniversary of my first letter to you requesting that the Committee investigate widespread and systemic abuses by mortgage servicing companies, including illegal foreclosures, inflated fees, and fraud against American homeowners. This is now my fourth letter to you on this subject.1

[…]

[ipaper docId=58481965 access_key=key-1l9y3r577fvic8q11q7t height=600 width=600 /]

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Mortgage servicer abuse facing state, fed probes

Mortgage servicer abuse facing state, fed probes


New York Post-

On Wednesday, consumer defense attorney Linda Tirelli added another outrageous example of mortgage servicer misbehavior to her growing file of hundreds of such abuses against New York homeowners.

The overcharging by a servicer — which manages mortgages day-to-day for lenders — to bill a homeowner in foreclosure over $2,700 for property inspections that cost just $9.60 a pop came as federal and state regulators are investigating shoddy practices by servicers and big banks, which are often one and the same.

Read more: http://www.nypost.com/p/news/business/mortgage_servicer_abuse_facing_state_Umjx6WymEioIMWkl6hHmGM#ixzz1N8smTqVt

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Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011

Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011


U.S. Sen. Sherrod Brown (D-OH) introduced landmark legislation to prevent future servicer fraud and errors, improve foreclosure counseling and prevention, and reform oversight of mortgage-based investing. Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, introduced the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 which would expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities. Companion legislation was introduced in the U.S. House of Representatives by Rep. Brad Miller (D-NC).

The Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 would:

  • Protect homeowners from servicer errors, miscommunications, and abusive fees.
  • End the rush to foreclosure and require servicers to work with homeowners to find sustainable mortgages.
  • Improve standards for staffing and casework by mortgage servicers.
  • Protect the interests of investors who buy securities backed by residential mortgages.
  • Reform oversight of pools of securitized mortgages.

[ipaper docId=53051383 access_key=key-19zh6fcxbi9x1h6zdo1s height=600 width=600 /]

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MA Court Certifies ECOA, FHA Class Action Against H&R BLOCK, OPTION ONE

MA Court Certifies ECOA, FHA Class Action Against H&R BLOCK, OPTION ONE


CECIL BARRETT, JR., et al.
v.
H&R BLOCK, INC., OPTION ONE MORTGAGE CORPORATION and H&R BLOCK MORTGAGE CORPORATION n/k/a OPTION ONE MORTGAGE SERVICES, INC.[1]

Civil Action No. 08-10157-RWZ.

United States District Court, D. Massachusetts.

March 21, 2011.


MEMORANDUM OF DECISION

RYA W. ZOBEL, District Judge.

Now pending before the court is Plaintiffs’ motion for class certification. Plaintiffs are African-American homeowners who bring suit on behalf of themselves and similarly situated homeowners against H&R Block, Inc. (“H&R Block”), and its wholly-owned subsidiaries, San Canyon Corp., f/k/a Option One Mortgage Corporation (“Option One”) and Ada Services Corporation, f/k/a H&R Block Mortgage Corporation (“H&R Block Mortgage”) (collectively, “Option One” or “Defendants”).[2]

The gravamen of Plaintiffs’ complaint is that H&R Block and Option One violated the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f (“ECOA”), and the Fair Housing Act, 42 U.S.C. §§ 3601-3619 (“FHA”),[3] by giving its authorized brokers discretion to impose additional charges to the borrower’s wholesale mortgage loans unrelated to a borrower’s creditworthiness, a policy that had a disparate impact on African-American borrowers in that it resulted in their being charged higher rates than similarly situated whites.[4]

Plaintiffs now move to certify a class of “[a]ll African-American borrowers who obtained a mortgage loan from one of the Defendants between January 1, 2001 and the [d]ate of [j]udgment” under Federal Rule of Civil Procedure 23(b)(3). See Docket # 74, Pl.’s Mem. in Support of Mot. for Class Certification at 17.

I. Background

Plaintiffs Cecil and Cynthia Barrett (“the Barretts”) purchased their home in 2004 for approximately $277,000. See Second Am. Compl. ¶ 76. They refinanced the mortgage on their home in Mattapan, Massachusetts, in 2005, taking out a $416,000 loan with a 30-year term and a disclosed Annual Percentage Rate, or “APR,” of 8.653 percent. Id. at ¶¶ 77-78. The Barretts were assisted by Money-Wise Solutions, a mortgage broker authorized to originate loans with Option One. Id. at ¶ 79. On April 6, 2006, they again refinanced. Id. at ¶ 81. That loan, also with Option One, was for $500,000, and had an adjustable rate with a balloon feature, providing for a final payment of $344,113.90. Id. at ¶ 82. The APR on the second loan was 10.536%. Id. The remaining plaintiffs similarly used brokers to obtain wholesale mortgage loans from Option One and allege that they were charged a higher APR than similarly-situated whites.

H&R Block made home mortgage loans to consumers through its subsidiaries, H&R Block Mortgage and Option One. See Second Am. Compl. ¶¶ 23, 49. Option One was primarily a wholesale mortgage lender and offered its services through its branches and a national network of mortgage brokers. Id. at ¶ 22.

In the wholesale mortgage lender market, independent mortgage brokers act as intermediaries between borrowers and lenders like Option One. A broker identifies prospective borrowers, facilitates the loan origination process, and transmits prospective borrowers’ respective applications to lenders for a determination of whether or not to grant the loan. This reliance on brokers enabled Option One to fund mortgages in areas where it had not established any retail presence of its own. Option One worked with numerous authorized brokers when it was in the wholesale mortgage business, which it abandoned in late 2007. Between 2001 and 2007, H&R Block Mortgage’s subprime retail originations represented approximately 10% of Option One’s overall loan origination volume.

The pricing of Option One’s mortgage loans was comprised of an objective and a subjective component. According to Plaintiffs, when a proposed borrower applied for a loan, Option One first computed a risk-based financing rate (the “Par Rate”) based on objective criteria of creditworthiness, such as FICO score, property value, and loan-to-value ratio to determine credit parameters, and set prices for its loan products. This information was communicated to brokers on a rate sheet listing Option One’s “par” interest rate, which did not result in any broker compensation. That objective component of loan pricing is not at issue here.

Option One also authorized a subjective component in its credit pricing system (the “Discretionary Pricing Policy”), which governed brokers’ compensation for their services. This is the policy at issue. Under this policy, brokers were permitted to set interest rates higher than the par rate, as well as to charge loan origination and processing fees. Option One paid brokers a “yield spread premium” or “rebate” when they did so. Brokers were paid more for loans that cost the borrower more, though their total compensation was capped at 5 percent of the loan amount. As the name implies, there were no objective criteria for the imposition of these higher rates and fees, which were set by the brokers in their discretion. These discretionary charges were negotiated between the broker and borrower as part of the total finance charge (the “Contract APR”), without specific disclosure that a portion of the Contract APR was a non-risk related charge.

Option One, along with H&R Block and H&R Block Mortgage, jointly established the Discretionary Pricing Policy and participated in the decisions to grant credit to borrowers. (Id. ¶¶ 53-54.) Option One monitored the fees charged by its brokers to ensure they complied with its policies.

Plaintiffs allege that “by design,” the Discretionary Pricing Policy “caused persons with identical or similar credit scores to pay different amounts for the cost of credit.” (Id. ¶ 68.) Although facially neutral, the policy had an adverse effect on African-Americans in that they paid higher discretionary charges on their home loans than did similarly situated white borrowers. Plaintiffs bring these claims under a disparate impact theory, challenging “practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity.” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977).

II. Legal Standard

To obtain class certification, plaintiffs must satisfy four requirements of Federal Rule of Civil Procedure 23(a) as well as one of several requirements of Rule 23(b). Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32, 38 (1st Cir. 2003).

Rule 23(a) provides that a class may be certified only if “(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a). Courts have characterized this rule to require plaintiffs to satisfy the requirements of numerosity, commonality, typicality, and adequacy. See Smilow, 323 F.3d at 38.

Rule 23(b) allows for several different types of class actions. Plaintiffs seek to certify the class under Rule 23(b)(3) which requires a showing “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b).

Before certifying a class, courts are required to engage in “a rigorous analysis of the prerequisites established by Rule 23.” In re New Motor Vehicles Canadian Export Antitrust Litigation, 522 F.3d 6, 17 (1st Cir. 2008). Accordingly, when considering disputed issues for class certification, a district court may “probe behind the pleadings to formulate some prediction as to how specific issues will play out.” DeRosa v. Massachusetts Bay Commuter Rail Co., 694 F. Supp. 2d 87, 95 (D. Mass. 2010) (citations omitted). However, the court may not consider whether the party seeking class certification has stated a cause of action or is likely to prevail on the merits. See In re Initial Public Offering Securities Litigation, 471 F.3d 24, 36-37 (2d Cir. 2006). A district court must certify a class if it concludes that the moving party has met its burden of proof on each element.

III. Analysis

A. Rule 23(a)

1. Numerosity

Under Rule 23(a)(1), the numerosity requirement is met if “the class is so numerous that joinder of all members is impracticable.”

From 2001 through 2007, Option One made at least 130,000 wholesale and retail loans to African-American borrowers located across the United States. Defendants do not dispute that the numerosity requirement has been met.

2. Commonality

To demonstrate commonality under Rule 23(a)(2), Plaintiffs must establish “common questions of law and fact.” Fed. R. Civ. P. 23(a)(2). It is not necessary that members of the proposed class share every fact in common or present identical legal issues. See In re Transkaryotic Therapies, Inc. Securities Litig., 03-cv-10165-RWZ, 2005 WL 3178162, at *2 (D. Mass. Nov. 28, 2005) (internal quotations omitted). Rather, the rule requires “a sufficient constellation of common issues [that] binds class members together.” Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 296 (1st Cir. 2000). In actions based on disparate impact, commonality is satisfied if the lawsuit “tend[s] to show the existence of a class of persons affected by a company-wide policy or practice of discrimination.” Attenborough v. Const. and General Bldg. Laborers’ Local 79, 238 F.R.D. 82, 95 (S.D.N.Y. 2006). Individual factual differences among the putative class members will not preclude a finding of commonality. See Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001).

To make out a prima facie case of discrimination under the disparate impact theory, a plaintiff must (1) identify the specific practice being challenged; and (2) show that it effected different results in different populations. See Watson v. Ft. Worth Bank and Trust, 487 U.S. 977, 994-995 (1988). “[I]t is not enough to simply allege that there is a disparate impact on workers, or point to a generalized policy that leads to such an impact. Rather, the [plaintiff] is responsible for isolating and identifying the specific … practices that are allegedly responsible for any observed statistical disparities.” See Smith v. City of Jackson, 544 U.S. 228, 241 (2005) (internal quotations omitted). Moreover, “[p]roof of disparate impact is based not on an examination of individual claims, but on a statistical analysis of the class as a whole.” In re Wells Fargo Residential Mortg. Lending Discrimination Litigation, 08-md-01930, 2010 WL 4791687, *2 (N.D. Cal. 2010) (internal citations omitted).

Once the plaintiff has established a prima facie case of disparate impact, the burden of proof shifts to the defendant, who may either discredit the plaintiff’s statistics or proffer its own computations to demonstrate that no disparity exists. See Watson, 487 U.S. at 996-97.

First, Option One argues that the named Plaintiffs cannot satisfy the requirement of commonality because the results of an aggregated statistical regression cannot supply classwide proof of discrimination, particularly where individual Plaintiffs did receive a lower APR.[5] It relies on its studies that the majority of putative class members paid an amount that was statistically the same as they would have paid had they been white, and that another 2.6% of class members paid an amount less than predicted. Defendants contend that such disparities as existed are explainable not by race but by factors such as geography and the individual broker. Second, Defendants contend that individualized pricing, changes in policy, and other practices preclude classwide adjudication of Plaintiffs’ claims.

Plaintiffs demonstrate common questions of fact and law through the expert report of Yale Law School Professor Dr. Ian Ayres (“Professor Ayres”), whose analysis of Option One’s mortgage data leads him to conclude that the Discretionary Pricing Policy did have a disparate impact on minority borrowers because “African Americans paid more for Option One mortgage loans than whites with similar risk-characteristics.” Docket # 89-3, Report of Professor Ayres (“Ayres Report”) at 6, ¶ 10. In his study, Professor Ayres compares the annual percentage rate, or “APR,” paid by white and minority borrowers for Option One wholesale loans originated from 2001 to 2007. He finds that the mean APR for African-Americans was 9.876%, as compared with a mean APR of 9.415% for whites, a difference of 0.461%. See Ayres Report at 7, ¶ 10.

To compare similarly situated whites and minorities, Professor Ayres also performed regression analysis, a statistical method that allows him to control for legitimate risk factors that may affect the cost of a loan. Controlling for such risk factors, he concluded that the APRs of African-Americans are 0.086% higher than those of similarly situated whites, resulting in an average payment of $134 more per year for each of the former group’s loans. Professor Ayres’ study relies entirely on evidence common to the class and does not require any individualized inquiry.

The central question of fact and law is common to the class. Plaintiffs assert that the discretionary pricing strategy they challenge was executed uniformly, and its adverse effects were felt in the same way by Plaintiffs and all class members. Therefore, common questions include whether Option One’s policy resulted in a pricing disparity between white and minority borrowers and whether those disparities are justified by legitimate risk factors.

Defendants dispute commonality through their own expert, Dr. Darius Palia (“Dr. Palia”), Professor of Finance and Economics at Rutgers Business School, who asserts that there is no evidence that there was “a commonly applied `Discretionary Pricing Policy’ that was the cause of a class-wide disparate impact on African-American borrowers.” See Docket # 89-1 (Rebuttal Report of Dr. Palia dated May 4, 2010, hereinafter “Palia Report”).

Using Professor Ayres’ numbers, Dr. Palia replicated Professor Ayres’ exact regression analysis to highlight alleged errors. Dr. Palia points to two major flaws in Professor Ayres’ analysis. First, he argues that the Ayres regression model was improperly applied to the aggregate, and not separately to the individual mortgage brokers that used the so-called “Discretionary Pricing Policy.” If such a policy had, in fact, been applied, “the disparate impact caused by the policy should be observed consistently across the various brokers that applied it”; if not, “that would suggest that loan pricing is the result of individualized decision-making rather than the result of a common policy.” Second, Dr. Palia contends that Professor Ayres’ failure to apply his regression model separately to local geographic markets in which borrowers applied for and obtained their mortgage loans renders his conclusions inaccurate. After completing his own analysis, Dr. Palia concluded: “(1) the statistical evidence does not show any common pattern of disparate impact against African-American borrowers either across the brokers that originated the loans or across the geographic markets in which the largest numbers of loans were originated; (2) even among the minority of brokers and geographic markets in which African-Americans experienced statistically higher APRs than similarly-situated whites, there is no common cause of such pricing differences; and (3) nine of ten loans extended to named plaintiffs had APRs that were not statistically different from the APR that would have been predicted had the borrowers been white.”

Although Defendants hotly dispute the merits of Professor Ayres’ analysis, it has long been the rule that disputes about the respective experts’ statistics are tantamount to disputes about the parties’ proof of the merits and are not grounds for denying class certification. See In re Initial Public Offerings Securities Litigation, 471 F.3d 24, 35 (2d Cir. 2006)[6] Plaintiffs have satisfied the commonality requirement. (experts’ disagreement on whether a discriminatory impact could be shown is a disagreement as to the merits, and is not a valid basis for denying class certification). Statistical disputes in civil rights cases “encompass the basic merits inquiry and need not be proved to raise common questions and demonstrate the appropriateness of class resolution.” Id. at 594.

3. Typicality

A plaintiff may represent a class only if his or her claims are “typical” of those of the putative class. See Fed. R. Civ. P. 23(a)(3). In general, a plaintiff’s claim is typical if it “arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory.” In re Pharm. Indus. Average Wholesale Price Litig., 230 F.R.D. 61, 78 (D. Mass. 2005). Where, however, “a named plaintiff may be subject to unique defenses that would divert attention from the common claims of the class, that plaintiff cannot be considered typical of the class.” In re Bank of Boston Corp. Securities Litigation, 762 F.Supp. 1525, 1532 (D. Mass. 1991). While commonality “examines the relationship of facts and legal issues common to class members,” typicality “focuses on the relationship of facts and issues between the class and its representatives.” Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 613 n. 37 (9th Cir. 2010) (en banc).

Here, Plaintiffs contend that their claims are typical because Option One made loans to each Plaintiff under the same subjective Discretionary Pricing Policy to which the class was subjected.

Option One counters that the named Plaintiffs are not typical for two reasons: (1) some have suffered no injury in connection with their loans and therefore lack standing; and (2) individualized defenses demonstrate that there is no “typical” named plaintiff.

i. Standing

Defendants assert that certain Plaintiffs were not injured because they received loans that were priced more favorably than similarly situated white borrowers. Further they argue that Plaintiffs’ reliance on Dr. Ayres’ conclusions of disadvantage to African-American borrowers as a group does not support the inference that the named Plaintiffs were so disadvantaged. Absent such individualized evidence, the named Plaintiffs are not typical of the class they represent, and thus lack standing.

Plaintiffs have alleged that the disparate impact was the result of the Discretionary Pricing Policy, a common practice that governed the pricing of all class members’ mortgages. The named Plaintiffs were subject to that policy, and have advanced a viable theory showing that it produced harm. That is sufficient to satisfy the typicality requirement.

ii. Individualized Defenses

Next, Defendants contend that the individual circumstances surrounding each named Plaintiff’s loans expose each to individual defenses which defeat typicality. In particular, Defendants contend that several Plaintiffs submitted loan applications which contained false information, subjecting them to a defense of unclean hands. This argument is unavailing. The U.S. Supreme Court has held that because the purpose of the ECOA is to eradicate discrimination, the unclean hands defense is not available to question liability. See McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 356-57, 360 (1995) (holding that the unclean hands defense “has not been applied where Congress authorizes broad equitable relief to serve important national policies” including civil rights statutes such as the ADEA); see also Moore v. U.S. Department of Agriculture, 55 F.3d 991, 995-96 (5th Cir. 1995) (holding that an unclean hands defense did not defeat liability under the ECOA).

Finally, Defendants say that the necessity for an individualized statute of limitations defense determination defeats typicality. This, too, is without merit. First, this court has already ruled against Defendant’s statute of limitations defense with respect to the named Plaintiffs when it denied their motion to dismiss. Second, all named Plaintiffs but one filed within the requisite time. Third, at the class certification stage, a court’s analysis of unique defenses focuses on whether those defenses will “unacceptably detract from the focus of the litigation to the detriment of absent class members.” Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 59 (2d Cir. 2000). Here, any statute of limitations defense will not do so.

4. Adequacy

Rule 23(a)(4) requires that the proposed class representatives “fairly and adequately protect the interests of the class.” This requirement has two parts. Plaintiffs must first demonstrate that “the interests of the representative party will not conflict with the interests of any of the class members,” and second, that “counsel chosen by the representative party is qualified, experienced and able to vigorously conduct the proposed litigation.” In re M3 Power Razor System Marketing & Sales Practice Litigation, 270 F.R.D. 45, 55 (D. Mass. 2010) (citing Andrews v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985)).

Option One does not dispute the adequacy of these class representatives, and the court discerns no conflicts between Plaintiffs and any members of the class. Accordingly, all four requirements of Rule 23(a) have been met.

B. Rule 23(b)(3)

As they request certification under Rule 23(b)(3), Plaintiffs must present evidence showing the predominance of common issues and the superiority of a class action. The court now turns to these two requirements.

1. Predominance

Rule 23(b)(3) requires the court to find “that the questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance requirement “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation” and is a “far more demanding” standard than Rule 23(a)’s commonality requirement. Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997). The Rule is intended to ensure “that common issues predominate, not that all issues be common to the class.” In re Transkaryotic Therapies, Inc. Securities Litigation, 2005 WL 3178162, *2 (D. Mass. 2005) (citations omitted).

Option One disputes predominance by reiterating its arguments against commonality. The disparity in APR is explained not by race, Option One argues, but by other legitimate variables.

The key question again is whether Option One’s Discretionary Pricing Policy had a disparate impact, that is, whether it fell “more harshly on one group than another and cannot be justified by business necessity.” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977). Since the claim is disparate impact, the relevant evidence will focus on “statistical disparities, rather than specific incidents, and on competing explanations for those disparities.” Watson v. Ft. Worth Bank & Trust, 487 U.S. 977, 987 (1988).

Professor Ayres’ analysis provides evidence of the disparate impact on a class-wide basis. Competing explanations for those disparities are examined by way of regression analyses that assess the effect of competing variables. Option One can defend against Plaintiffs’ case either by demonstrating that its discretionary policy had a valid business justification, or by challenging the statistical basis for Plaintiffs’ claim. In either case, the legal contention applies across the class. Thus, Plaintiffs have carried their burden of showing the predominance of common questions.

2. Superiority

The final requirement for class certification is “that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The pertinent factors in assessing superiority are “the class members’ interests in individually controlling the prosecution or defense of separate actions” and “the likely difficulties in managing a class action.” Id. Superiority exists where “there is a real question whether the putative class members could sensibly litigate on their own for these amounts of damages, especially with the prospect of expert testimony required.” Gintis v. Bouchard Transp. Co., Inc., 596 F.3d 64, 68 (1st Cir. 2010).

It would be neither economically feasible nor efficient for class members to pursue these claims against Option One individually. The amounts recoverable for individual class members are too low for class members to bring individual claims. The class action is manageable because liability will be determined based on statistical proof, and remedies can be calculated on a class-wide basis. A class is therefore superior to other methods for adjudicating these claims.

C. Class Period

While the result on the merits is by no means certain, the proposed class satisfies the requirements of Rule 23, and class certification is appropriate. However, several questions remain unresolved. Most notably, the proposed dates of the beginning and end of the class period are left singularly unsubstantiated. Moreover, it is unclear how and when Option One began to identify loan applicants by race.

D. Rule 23(g)

Since the court has determined that Plaintiffs have met Rule 23’s requirements for class certification, the court must appoint class counsel. See Fed. R. Civ. P. 23(g). On or before April 11, 2011, any counsel who wishes to serve as class counsel shall file the requisite motions and documentation to support his/her request.

IV. Conclusion

Plaintiffs’ motion for class certification (Docket # 72) is ALLOWED, subject to limitation by time. A class of “[a]ll African-American borrowers who obtained a mortgage loan from one of the Defendants” is hereby certified.

[1] H&R Block Bank, a Federal Savings Bank, Member FDIC, was named as a defendant but has since been voluntarily dismissed from the action. H&R Block, Inc. was dismissed for lack of personal jurisdiction. The only defendants remaining are Option One Mortgage Corporation and Option One Mortgage Services, Inc., which became the new name of H&R Mortgage Services in July 2007.

[2] Plaintiffs are Cecil Barrett, Jr., Cynthia Barrett, Jean Blanco Guerrier, Angelique M. Bastien, Jacqueline Grissett, Craig Grissett, Steven Parham, Betty and Edward Hoffman, Doris Murray, Joslyn Day and Keisha Chavers (collectively “Plaintiffs”),

[3] The ECOA provides that it is unlawful “for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction-(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).” 15 U.S.C. § 1691(a). Similarly, the FHA makes it unlawful “for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.” 42 U.S.C. § 3605(a).

[4] This court previously concluded that disparate impact claims are cognizable under both the FHA and ECOA. See Order Denying Mot. to Dismiss (Docket # 45) at 3-5; see also Langlois v. Abington Hous. Auth., 207 F.3d, 43, 49 (1st Cir. 2000) (disparate impact claims allowable under FHA); and Miller v. Countrywide Bank, N.A., 571 F. Supp. 2d 251, 256-257 (D. Mass. 2008) (disparate impact claims allowable under ECOA).

[5] Citing Stastny v. Southern Bell Tel. & Tel. Co., 628 F.2d 267 (4th Cir. 1980), Defendants further contend that delegation of discretion cannot, as a matter of law, form the policy required to make out a claim of disparate impact discrimination. This argument is unavailing. It is not the delegation of discretion that constitutes the policy, but rather the existence of a commonly applied practice that satisfies the requirement. See Watson v. Fort Worth Bank, 487 U.S. 977 (1988) (policies which designate discretionary authority to individual actors are actionable if they have a verifiable discriminatory impact on a protected class); see also Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 612 (9th Cir. 2010) (en banc) (same).

Moreover, this court previously held that Plaintiffs adequately identified the practice at issue, namely “establishing a par rate keyed to objective indicators of creditworthiness while simultaneously authorizing additional charges keyed to factors unrelated to those criteria.” Barrett v. H & R Block, 08-cv-10157-RWZ (Docket # 45) at 7.

[6] Defendants contend that arguments that one party’s statistics are “unreliable or based on an unaccepted method” must be resolved at the certification stage. See Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 591-592 (9th Cir. 2010) (en banc). Here, however, Defendants do not contend that the statistical analysis was based on an unaccepted method. Rather, they contend that Dr. Ayres’ model produces results which do not prove a disparate impact caused by any policy.

[ipaper docId=51688987 access_key=key-7e4f5josfyyppxsp3ka height=600 width=600 /]

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MERS Shortchanged CPA Funds in MA City, Towns of $400K

MERS Shortchanged CPA Funds in MA City, Towns of $400K


March 10, 2011

City, towns lose $400k for CPA

Essex County’s register of deeds says that Gloucester and Cape Ann’s three towns have been shortchanged nearly $400,000 in money that should have been earmarked for their Community Preservation Act funds, thanks to a business set up by major banks and mortgage lenders to track of millions of mortgages across the country and bypass the system.

Register of Deeds John O’Brien says the Mortgage Electronic Registration System, or MERS, has cheated taxpayers out of at least $22 million across Essex County alone. He is asking for the help of the attorney general’s office to recover that money — and upward of $200 million he believes is owed to county registries across the state.


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REUTERS | BofA, Wells, Citi see foreclosure probe fines

REUTERS | BofA, Wells, Citi see foreclosure probe fines


Fri Feb 25, 2011 9:20pm EST

CHARLOTTE, N.C./NEW YORK (Reuters) – Bank of America, Citigroup and Wells Fargo — three of the biggest banks in the United States — said they could face fines from a regulatory probe into the industry’s foreclosure practices.

The statements, made in regulatory filings on Friday, are the most direct admission yet from major banks that they could have to pay significant amounts of money to settle probes and lawsuits alleging that they improperly foreclosed on homes.

Bank of America Corp (BAC.N), the largest U.S. bank by assets, said the probe could lead to “material fines” and “significant” legal expenses in 2011.

Wells Fargo & Co (WFC.N), the largest U.S. mortgage lender, said it is likely to face fines or sanctions, such as a foreclosure moratorium or suspension, imposed by federal or state regulators. It said some government agency enforcement action was likely and could include civil money penalties.

Citigroup Inc (C.N) said it could pay fines or set up principal reduction programs.

The biggest U.S. mortgage lenders are being investigated by 50 state attorneys general and U.S. regulators for foreclosing on homes without having proper paperwork in place or without having properly reviewed paperwork before signing it.

The bad documentation threatens to slow down the foreclosure process and invalidate some repossessions.

Continue reading … REUTERS

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