One South Florida Homeowner Among Many Fighting Back Against Subprime Lenders

In Broward County, Florida, a story in the Daily Business Review (appearing on Law.com) recently reported on a disabled woman who recently refinanced her home and subsequently discovered, much to her chagrin, that she might have been given a mortgage loan different from the one she thought she was getting.

• [C]onfined to a wheelchair, she already is struggling to make her monthly payments. So instead of waiting for the sword of Damocles to fall in the form of foreclosure, [homeowner Denise] Bennett is fighting back. She sued her lender, Countrywide Home Loans, on June 26 alleging fraud in a case assigned to U.S. District Judge William Zloch in Fort Lauderdale. Bennett is a plaintiff in one of several suits filed against the troubled lender by the Affirmative Defense Group in Margate, Fla. Her attorney, Frank Ingrassia, said he has filed about 70 such suits against a variety of lenders.

• "It's an industrywide problem," Ingrassia said. "Some of the clients tried to do workouts and weren't able to do that, and when you are faced with foreclosure it's an issue of striking first or not." He said the litigation is a "new approach for dealing with unprecedented levels of foreclosures."

• Nearly all of the lawsuits involve adjustable rate subprime mortgages to high-risk customers. Ingrassia said some of his clients were offered "teaser rates" as low as 1.5 percent that adjusted up within 30 days. The lawsuits also allege Calabasas, Calif.-based Countrywide and the other lenders falsified paperwork that exaggerated the income of the customers to qualify for the loan.

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• Ingrassia's lawsuits seek rescission of his client's mortgages plus damages including the reimbursement of all mortgage payments, finance charges, interest, attorney fees and costs. The litigation alleges the lender violated Florida's Deceptive and Unfair Trade Practices Act and the federal Truth in Lending and Real Estate Settlement Procedures acts.

• The lawsuits were filed as state regulators ganged up on Countrywide. Florida Attorney General Bill McCollum sued the mortgage lender in Broward County last week for alleged predatory lending practices. California and Illinois also have filed lawsuits.

[Editor's Note: Washington State has also recently taken action against against Countrywide.]

For more, see Saying They Were Tricked, Borrowers Fight Back With Lawsuits.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. undo mortgage loans TILA batallion