The State of Georgia has now designated the Champion Mortgage Corporation as the plaintiff in a Class Action lawsuit filed against Fannie Mae, its former owner and its former subsidiary, Fannie Mae Holding LLC. The lawsuit was filed against CHMC, its current owner and its three principal officers, namely: Fannie Mae Holding LLC CEO; William Phillips, a former top official at Fannie Mae; and Thomas Pace, a former risk manager for Fannie Mae. The complaint names these and other defendants because they are individually responsible for allowing the predatory lending practices and fraud that were used by lenders to occur. The Class Action lawsuit is seeking damages on a variety of claims and asserts.
The complaint states that CHMC “actively and negligently” did not take measures that would have kept homeowners in homes and avoided the illegal actions described in the complaint. In essence, according to the lawsuit, the champion mortgage company and its principals “actively and negligently discriminated against lawfully qualified home buyers who sought affordable mortgage loans in order to increase profits for themselves.” The complaint further goes on to say that defendants “instructed and consented” to the illegal lending and conduct, which result in violations of the Fair Housing Act.
The complaint further states that defendants Fannie Mae, along with the other two primary participants, acted in a “purposeful and intentional” violation of the United States’ FHA Guaranteed Loan Program, the National Association of Home Builders, and the Anti-discrimination Act, among others. Further, the complaint contends that the companies specifically violated the provision of the Fair Housing Act that makes it possible for victims of housing discrimination to bring lawsuits against private entities and government agencies that cause such discrimination. In addition to pointing out the class actions and the violations of the law, the lawsuit maintains that the policies and actions of these companies result in continuing and worsening problems faced by countless families across the country. According to the complaint, a substantial amount of foreclosures are taking place each day in the US, many of which are caused by mismanagement and predatory lending practices of mortgage companies and their agents. These practices, the lawsuit claims, contribute to the foreclosure crisis currently impacting the US.
Another class action lawsuit mortgage lawsuit that was recently brought against Fannie Mae resulted in the eviction of an elderly disabled widow from her home, after she had fallen ill and needed to be hospitalized. The lawsuit was brought by her daughter, who alleged that her mother was severely diabetic and required constant medical care that would have been provided for her under the terms of the housing program that is known as FHA. After Fannie Mae failed to make the payments on the loan that it guaranteed, the insurance provider for the loan provided her with an eviction notice. This case ultimately went to the US Circuit Court of Appeals, which ruled in favor of Fannie Mae.
Champion Mortgage LLC is one of the largest home mortgage lenders in the country and also happens to be the lender most sued over foreclosure or mortgage related issues. There have been several Champion mortgage lawsuits over the past two years alone. These cases primarily involve violations of the Fair Debt Collection Practices Act, the Reverse Mortgage Practices Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, and the Home Affordable Modification Act. Most of these complaints deal with violations of the FHA’s home loan servicing rules regarding “assignments and contracts for services,” “permit adjustments” and “oversights,” among other things. Some of the most common accusations include “systematic” underwriting of loan documents, inaccurate assessments of income and expenses, abusive closings, non-disclosure or negative reporting of delinquent payments and other similar actions.
The Champion lawsuit targets all of these, as well as a host of other allegations. This case is being represented by the law firm of Jones Day. In a typical Champion Mortgage case, homeowners who had fallen behind on their mortgage payments are usually given the option of a short sale or a deed-in-lieu of foreclosure, at which point they would be required to move out of the property by 30 days, pay the deficiency and fees, and sign a legally binding contract agreeing to not proceed with the foreclosure process. The problem is that borrowers who choose either option do not get the opportunity to review the options with their own attorney, so they must rely on the advice of the bank’s foreclosure department. When this fails, and because many buyers of pre-foreclosures fall behind on their mortgage payments, Champion Mortgage and its affiliates file the above mentioned class-action lawsuit against the borrowers.
