Lender Found Liable in Mortgage Fraud Case

Posted on January 10, 2009. Filed under: Case Law, Foreclosure Defense, Mortgage Fraud, Mortgage Law, Predatory Lending, right to rescind, Truth in Lending Act | Tags: , , , , , , , , , |

A Florida federal judge has found a mortgage lender liable to borrowers who say they were fraudulently put into unaffordable subprime mortgages.

U.S. District Judge Federico A. Moreno of the Southern District of Florida entered a default judgment against Bankers Express Mortgage Inc.

The judge said the Calabasas, Calif.-based lender did not respond to a lawsuit Maxo and Georgette Petit-Homme filed Aug. 14 and thus was liable for a to-be-determined sum of damages.

Another defendant, loan servicer Litton Loan Servicing LP, is seeking dismissal of the suit.

The Petit-Hommes, who are in foreclosure, sued Bankers Express and Litton in the District Court seeking to rescind the mortgage on their Miami home.

They claim that when they applied for a mortgage they provided the defendants with documentation about their income and financial assets.

The defendants, however, falsely increased the plaintiffs’ income on the loan application to make them eligible for an expensive $180,000 subprime loan with an interest rate of more than 10 percent, the suit says.

The Petit-Hommes claim that when they took out the loan in December 2006 they were unaware that the defendants had falsified their income.

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The Housing Crisis and a Fight-Back Program

Posted on November 24, 2008. Filed under: Mortgage Audit, Mortgage Fraud | Tags: , , , , , |

The current economic crisis has been building for years. At its root is the massive elimination of decent-paying jobs and lowering of wages in the U.S. and worldwide, a phenomenon explained and analyzed so well in the party’s newest book, “Low-Wage Capitalism.”

The capitalist class was able to delay the inevitable economic collapse in significant part through the creation of the housing and home refinancing boom and its offshoots, racist subprime predatory lending and exotic adjustable-rate, pay-option, interest-only and negative amortization mortgages. People were sucked into putting their homes up as collateral for loans based on artificial appraisals that vastly overstated their value.

The financial interests made huge profits off these loans with their high interest rates and exorbitant fees. However, the lure of quick profits overcame any rational analysis of what was going on, so every single financial institution became involved in the mortgage boom, buying trillions of dollars of mortgage securities with no regard to the long-term prospects. It was classic overproduction as described by Marx, but within the financial sector.


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Liar loans lead next wave of foreclosures

Posted on August 19, 2008. Filed under: Mortgage Fraud | Tags: , , , , , , , |

In the mortgage industry, they are called “liar loans” — mortgages approved without requiring proof of the borrower’s income or assets. The worst of them earn the nickname “ninja loans,” short for “no income, no job, and (no) assets.”

The nation’s struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.


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