Door Could Open To Class Actions

[flashl]

Source: Washington Post


WHEN BORROWERS FIGHT BACK: Banks watch closely to see if a couple's legal struggle with their lender will launch a new front in the battle over troubled mortgages

A federal appeals court is nearing a decision on a battle between Chevy Chase Bank and a Wisconsin couple that could for the first time enable homeowners across the country to band together in class-action lawsuits against mortgage firms and get their loans canceled.

The case is alarming Wall Street's biggest banks, which could bear the hefty cost of reimbursing all mortgage interest, closing costs and broker fees to groups of homeowners who uncover even minor mistakes in their loan documents.

After a federal judge in Milwaukee ruled last year that the Wisconsin couple had been deceived and other borrowers could join their suit, Chevy Chase Bank appealed to the circuit court in Chicago. Kevin Demet, the lawyer for the plaintiffs, said a decision by the appeals court is imminent, though others involved in the case said it could be a matter of weeks.

"It's one of the most important cases for the mortgage industry right now," said Louis Pizante, chief executive of Mavent, which provides consumer protection law services to major lenders. "The case was somewhat interesting a couple years ago when it started, but its ramifications and impact have completely changed given the current environment."

Washington Post

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR2008022603351.html?nav=hcmoduletmv

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Break down that screw the borrower wall!

[rumpel]

1. Finally

:applause:

keeping fingers crossed - for a just final outcome.

[Cal Carpenter]

2. I guess I don't have enough posts

to recommend a thread, so I figure I should post on it and try again

A lot of people want to blame the victims here but these mortgage lenders are ruining lives, they deliberately deceive people. I hope this couple can prove it, and others follow suit (no pun intended!).

[maseman]

7. I blame both

Yes the Mortgage companies decieved many peopel and they should be punished. But many people got into thi mess because they simply saw prices skyrocketing, thought if they bought a property it would double in value in a few year therefore no worries about an ARM, and go on their merry way.

Well that worked for some who got out early with some decent cash. For hundreds of thousands now stuck with these adjustable rates they are sinking. I bought a house in 2004 at the height of the bubble. I researched out my backside for the best option. I could not justify an ARM loan like many friends because I thought it was nuts to have the risk a rate would go up. Rates were so low they had to go up. My friends called me nuts for not taking the 1.something % or interest only loan and going out to buy an SUV.

I bought a Honda Civic and now still have my very nice 5.3% locked in forever rate.

[NYC]

8. I just recommended it for you.

Welcome to DU. :hi:

[fed-up]

3. I need to find my docs-almost positive rate at title company diff than what was in prelim docs nt

It would be awesome if I got back all the outrageous fees-I am not in Wisconson, nor did I use Chevy Chase

I will watch this very, very closely

from the article

"The law states that even a minuscule violation by a lender can lead to a mortgage cancellation, or rescission. For example, if the annual percentage rate calculation is off by one-eighth of a percent between preliminary and final loan documents or if a monthly payment schedule does not conform precisely to federal guidelines, some borrowers could get a refund for all they have paid to live in their homes for years. They would have to pay back the entire amount of the loan, but they could then seek a new mortgage on better terms."

..snip

Wall Street banks are also worried. In many cases, the cost of reimbursement falls not on the mortgage lender but on the financial institutions that later bought and securitized the loans.

[ConcernedCanuk]

4. Another interesting and related article: "It Pays to Read The Fine Print"

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It Pays to Read The Fine Print

Wednesday, February 27, 2008; Page D01

In a mortgage refund, the bank holding the loan reimburses all interest, closing costs and broker fees to the borrower. The borrower pays the balance of the loan, usually with a new mortgage.

Relief Limited To:

Borrowers who have refinanced their mortgages or taken out a home equity loan may be eligible for a refund if they make a claim within three years of taking out the loan. Statutory damages are limited to $2,000, while actual damages are not capped, but borrowers must apply for monetary relief within one year of taking out the loan.


Claims can be triggered if:

Payment schedule is incorrect or does not conform to government guidelines in the Truth in Lending Act.

Disclosed annual percentage rate is off by 1/8 of a percent for regular mortgages or 1/4 of a percent for unorthodox mortgages from what the borrower is actually charged.
_______________________________________________________________

A wee bit more at link,

worth reading.

[flashl]

5. Thanks for the link. nt

[fed-up]

6. counts me out-mine was in 2004 :( nt

[ArbustoBuster]

9. There's an interesting take on the law from the bank

From the article: "In its court filings, Chevy Chase (Bank) said it would be 'irreparably harmed' if the class-action lawsuits are allowed."

Now, forgive me if I'm wrong, since I'm not a lawyer, but isn't the point of a legal system that sometimes the bad guys, you know, are irreparably harmed by the repercussions of their actions as passed down by the courts? It strikes me that if you argue "we could be harmed if you let people sue us," then you've passed disingenuous and gone into lame.

[ConcernedCanuk]

10. Well it's about time the moneylenders got "harmed". They been raping their clients for decades.

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I'm gonna cry a whole lot when some of the fat cats have to live below the poverty line.

Right.

I got NO sympathy when billionaires and millionaires lose their fortunes when most of them glean said fortune off of the regular folks,

And that's MOST of us.

Pay-back's a bit*h.

But it's time.