Mortgage Foreclosure & Refinance Resource

Two lawsuits were filled today.

One against Federal Home Loan Mortgage Corporation, more commonly known as Freddie Mac, “secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times,” Ohio Attorney General Marc Dann last Friday filed a securities fraud class action lawsuit in federal court in Youngstown, Ohio.

Florida’s attorney general sued seven South Florida companies and 12 individuals who allegedly peddled programs offering to help struggling homeowners avert foreclosure but instead left residents deeper in debt and, often, still fighting for their homes.

Ohio Attorney General Marc Dann filed a securities fraud class action lawsuit on behalf of the Ohio Public Employees Retirement System (OPERS) to benefit the fund and all other shareholders similarly harmed by the company’s investment in securities backed by sub-prime mortgage loans. OPERS losses as a result of the alleged fraud could be as high as $27.2 million. This lawsuit is evidence of the Attorney General’s commitment on behalf of Ohio’s pension funds to recover billions of dollars lost as a result of the collapse of the sub-prime mortgage industry. OPERS was the Lead Plaintiff in an earlier case against Freddie Mac and won a $410 million settlement in that case.

Florida’s attorney general sued seven South Florida companies and 12 individuals who allegedly peddled programs offering to help struggling homeowners avert foreclosure but instead left residents deeper in debt and, often, still fighting for their homes.

Here’s how the firms’ foreclosure programs allegedly worked:

• They approached homeowners who had fallen behind on mortgage payments but had substantial equity in their homes.
• The company would offer to take title for a year, refinance the mortgage, offer credit counseling and provide some cash. The homeowner would stay in their residence (while paying rent) with the assurance they would get title back in 12 months.
• The firms actually sold the homes to a new buyer, in many cases artificially inflating the homes’ value to get more money out of the deal. And they tacked on outsized fees and costs that erased much of the equity. The Miami Herald, which wrote about NFM and AHR in August, found one case where a $237,000 sale came with a $66,331.80 ‘’servicing fee” — paid to American Home Rescue.
• As a result of such fees, the house is saddled with a much bigger mortgage the resident cannot pay.
• The two companies often didn’t pay the mortgage. So buyers would move to evict the homeowner and sell the home in order to avoid their own foreclosure.