Complex Tort Plaintiff Litigation –Overview
•Named bank defendants are in the business of origination of residential mortgages.
•Following origination, the banks securitized the loans and sold them as investments.
•The banks pooled the loans before sale as a means of inflating their value.
•This evolved into a comprehensive scheme to inflate property values as a means of inflating their profits.
It is alleged that the banks were aware that these practices would create a real estate bubble, which would devastate their borrowers when it popped. At the time the banks originated the loans, they concealed from the borrowers that their loans would be securitized and sold to unknown third parties.
•Further, the banks concealed that their individual loans were part of a massive, fraudulent scheme to inflate property values.
•The banks were under a duty to disclose these details to each borrower. The bubble eventually popped, in 2008, and devastated homeowners.
•The bank defendants thus systematically destroyed home values across the nation.
•Plaintiffs lost equity in their homes, suffered damage to their credit profiles, an incurred other damage.
Securitization takes a commonplace, mundane transaction and makes very strange things happen. It is argued that in the case of a securitized mortgage note, there is no party who has the lawful right to enforce a foreclosure, and the payments alleged to have been in default have, in fact, been paid to the party to whom such payments were due.
Additionally, in the case of a securitized note, there are rules and restrictions that have been imposed upon the purported debtor that are extrinsic to the note and mortgage* as executed by the mortgagor and mortgagee, rendering the note and mortgage unenforceable.
It may be that as it now stands, a lawful foreclosure cannot occur against a mortgage whose note has been securitized because of the lack of an actual damaged party who has standing to state a claim. The note may well be unenforceable because the unnamed parties who are receiving the pre-tax income from the entity are the real parties in interest. They hold the legal and/or equitable interest in the mortgages held, but they do not have the ability to foreclose on any one individual mortgage because the mortgages held by the REMIC have all been bundled into one big income-producing unit.
The Resolution Law Group, along with attorneys across the country, are pressing this cause of action to enforce relief to homeowners at risk of foreclosure. State rulings are coming down on this side of the issue, in support of the homeowner.
We approach every client’s transaction history, with their lender, and that lenders’ history with its servicers, originators, and the loan funding history, with an aggressive and extensive forensic support alliance. Our auditors are some of the most experienced in this emerging area of lender litigation. Our securitization and funding auditors, FFS SEC, have dismantled thousands of mortgage originations to expose the trail of transferred debt ownership, that is the foundation of emerging foreclosure defense.
Causes of Action
•The banks were in possession of information regarding their underwriting guidelines, securitization practices, and the inflation of property values, when it entered into mortgages with the plaintiff borrowers.
•The banks had a duty to disclose this information to borrowers.
•The banks made material misrepresentations regarding this information, and otherwise concealed the information from borrowers.
•The plaintiffs relied on this misinformation in deciding to enter their loans.
•The plaintiffs were subsequently damaged as a result of these circumstances.
•The banks made misrepresentations regarding their business practices, as detailed above, with the intent of inducing borrowers to sign home loans.
•The plaintiffs relied on these misrepresentations in entering the loans.
•As a result of this, the plaintiffs were damaged.
•Same cause as intentional misrepresentations, but in this charge it is alleged that, even if the misrepresentations were not intentional, they were negligent in that, a reasonable bank acting in good faith would not have made the same misrepresentations.
•The banks violated these laws by basing foreclosure actions on false records.
•The bad faith business practices of the banks, as outlined above, constitute unfair competition, and violate State law.
Breach of Contract
•The banks accepted TARP money, and in so doing, were required to use this money to modify home loans, creating a contract.
•The banks did not perform this obligation, and thus breached this contract
If you, your family, friends, neighbors or associates have been subjected to Mortgage Fraud, please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation.
Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud