Lawsuits: Companies Specializing In Buying Up Troubled Mortgages Shield Original Lenders From Public Embarrassment

In Reno, Nevada, KOLO-TV Channel 8 reports:

• The sub-prime mortgage mess has become a real-life nightmare for a growing number of Nevada families and some are saying fraudulent lending practices are a big part of the problem. Two lawsuits filed in Reno Federal Court charge companies specializing in buying up troubled mortgages are shielding the original lenders from public embarrassment.

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• Their lawsuit charges GRP is in business to buy up fraudulent loans that other financial institutions wouldn't touch and take on the nasty job of foreclosure protecting the reputation of the original lender. "They are bottom feeders, who buy up these fraudulent and 'scratch and dent' mortgages," says the [plaintiffs'] attorney Bob Hager. "And when it comes to foreclosure, they take the heat."

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• The [plaintiffs] say they hope others in the same situation will join in their suit. In fact, Hager has already filed a similar action for a 71 year old Fernley man and is preparing third. He's seeking to have them made class action suits.

For more, see Lawsuit Charges Fraud, Predatory Ads to Mortgage Crisis.