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December 7th, 2009, 09:54 PM
Banks could face round of lawsuits over lending practices
BY CHRIS RIZO
PHOENIX, Ariz. (Legal Newsline)-The U.S. financial industry could face another round of multistate lawsuits over their home lending practices, attorneys general told Legal Newsline.
Dismayed that many lenders have not made it easy for struggling homebuyers to modify existing loans, Arizona Attorney General Terry Goddard, a Democrat, said legal action against mortgage lenders may be in order.
"It's been frustrating," Goddard said. "Banks have been very slow to make modifications."
Last year, a $8.68 billion settlement between 11 states and Bank of America, parent company of Countrywide Financial Corp., was reached over its lending practices, forcing the company to make a wave of loan modifications.
Illinois Attorney General Lisa Madigan and California Attorney General Jerry Brown were the first of several attorneys general to sue Countrywide, the nation's largest mortgage lender prior to it being sold to Bank of America in July 2008.
Goddard said state attorneys general have made curbing the number of home foreclosures a priority.
"We would all prefer to simply have a more transparent and simple modification process," Goddard told Legal Newsline on Thursday, at the conclusion of the National Association of Attorneys General winter meeting in Phoenix.
In addition to Countrywide, other banks sued by attorneys general in multistate actions include Household Finance Corp. and Ameriquest Mortgage Co. The companies have both discontinued loan originations.
At the three-day NAAG meeting, the nation's mortgage meltdown was the "biggest consumer topic on the table," said Goddard, who is widely expected to run for governor next year.
He said because there are typically long waits for loan modifications, people at risk of losing their homes are falling prey to frauds.
Often times, he said, people who have fallen behind on their mortgage payments are contacted by nefarious firms that promise relief and charge exorbitant up-front fees but offer no help.
"People pay the money and that is the last that they hear from them," Goddard said, noting that his office has been flooded with consumer complaints about fraudulent loan modification services.
Link to full story: http://ow.ly/JHZz
BY CHRIS RIZO
PHOENIX, Ariz. (Legal Newsline)-The U.S. financial industry could face another round of multistate lawsuits over their home lending practices, attorneys general told Legal Newsline.
Dismayed that many lenders have not made it easy for struggling homebuyers to modify existing loans, Arizona Attorney General Terry Goddard, a Democrat, said legal action against mortgage lenders may be in order.
"It's been frustrating," Goddard said. "Banks have been very slow to make modifications."
Last year, a $8.68 billion settlement between 11 states and Bank of America, parent company of Countrywide Financial Corp., was reached over its lending practices, forcing the company to make a wave of loan modifications.
Illinois Attorney General Lisa Madigan and California Attorney General Jerry Brown were the first of several attorneys general to sue Countrywide, the nation's largest mortgage lender prior to it being sold to Bank of America in July 2008.
Goddard said state attorneys general have made curbing the number of home foreclosures a priority.
"We would all prefer to simply have a more transparent and simple modification process," Goddard told Legal Newsline on Thursday, at the conclusion of the National Association of Attorneys General winter meeting in Phoenix.
In addition to Countrywide, other banks sued by attorneys general in multistate actions include Household Finance Corp. and Ameriquest Mortgage Co. The companies have both discontinued loan originations.
At the three-day NAAG meeting, the nation's mortgage meltdown was the "biggest consumer topic on the table," said Goddard, who is widely expected to run for governor next year.
He said because there are typically long waits for loan modifications, people at risk of losing their homes are falling prey to frauds.
Often times, he said, people who have fallen behind on their mortgage payments are contacted by nefarious firms that promise relief and charge exorbitant up-front fees but offer no help.
"People pay the money and that is the last that they hear from them," Goddard said, noting that his office has been flooded with consumer complaints about fraudulent loan modification services.
Link to full story: http://ow.ly/JHZz