Hat tip to Kingside for sending this along, from Bloomberg.com:
The U.S. Federal Deposit Insurance Corp., receiver for Downey Savings & Loan Association, sued Amerifund Financial Inc. and affiliated individuals in federal court seeking more than $1 million in damages.
The FDIC alleges breach of contract, professional negligence and civil fraud in the complaint against Amerifund, a mortgage broker, filed June 3 in U.S. District Court in Santa Ana, California.
Amerifund, based in Spring Valley, California, and its agents, processing mortgages for Downey in 2004 and 2005, “caused borrowers’ financial statements to be altered or misstated” in loan applications, the FDIC said. Had true income and debts been disclosed, borrowers wouldn’t have qualified for Downey loans, according to the complaint.
Downey Financial Corp., the S&L’s parent, sought Chapter 7 liquidation in U.S. Bankruptcy Court in Wilmington, Delaware, in 2008, citing as much as $50 million in assets and $500 million in debts. U.S. Bancorp subsequently acquired Downey.
Amerifund’s phone number was not in service today and company owner Eric M. Anderson couldn’t immediately be located for comment.
The case is Federal Deposit Insurance Corp. v. Amerifund Financial Inc., 11CV840, U.S. District Court, Central District of California (Santa Ana).
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We are familar with Amerifund, and they are small potatoes – just a handful of guys running a little shop out of Spring Valley.
But this lawsuit sounds like they’ve been accused of doing what virtually every mortgage broker was doing to obtain “liar loans” – are the feds going to prosecute other mortgage brokers too?
What about the big fish!!??
WASHINGTON (AP) — Fixed mortgage rates have dropped for an eighth straight week, but the low rates have done little to boost the depressed housing market.
The average rate on the 30-year loan fell to 4.49 percent from 4.55 percent, Freddie Mac said Thursday. The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.68 percent from 3.74 percent. Both are lows for the year.
Going after small fish can be a way to hone the presentation. These are not easy cases and they need to find out what works at trial. Better to lose in a small case and know how to get the big ones. Even better to win and then go after the bigs.
Daniel-I like your positive attitude. Let us hope it will be true. Unfortunately, I doubt it since the ‘big fish’ contribute way too much to PACS.
Deb,
Yeah, plus the statute of limitations is running out on the stuff Mozilo, Perry, Fuld, Blankfein, et. al. did.
There is a 10 year SOL for fraud. And you can plead around most SOL if you are creative.
MY BAD. It is 3 years.
They will probably argue that the fraud persisted for the life of the liar loan. If the court buys that, then the SOL clock wouldn’t start running until the borrower defaulted.
I am being sued for fraud by the FDIC because I defaulted on my Downey Savings loan and it went into forclosure on 12/2008.The loan oficer missrepresented all my financials,I dont know what to do I cant find a lawyer that will take my case.