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First Alliance Mortgage Co. - THE FTC and others, including six states, private plaintiffs, and the AARP, reached a major settlement with mortgage lender First Alliance Mortgage Co. in March 2002. The complaint alleged that the defendants loan officers in their sales presentations made blatantly deceptive claims about monetary and other loan terms. The settlement required the defendants to pay an amount equal to virtually the entirety of the corporate assets, as well as a $20 Million payment from the individual who founded and ran the company. Recently the FTC announced that the redress fund will ultimately total about $65 million for nearly 20,000 borrowers.

September 2002 – Landmark case. The FTC charged Citigroup Inc’s subsidiaries, Associates First Capital Corp., and Associates Corp of North America(“The Associates”) engaged in systematic and widespread deception and other illegal lending practices. “ they lured customers into high-cost loans through false and misleading statements and half-truths about loan costs, and violated numerous federal laws, including the TILA, the FCRA, and the FDCPA. The defendants paid $215 million for consumer redress to resolve the charges, in addition to a concurrent $25 million class action settlement.
July 2002 – The FTC, HUD, State of Illnois, jointly settled a case against a regional sub-prime lender, Mercantile Mortgage Company Inc., charging violations of the FTC Act, TILA, HOEPA, and the RESPA. The FTC alleged that the company’s employees, and one mortgage broker who was acting as an agent in soliciting and closing loans on it’s behalf, misrepresented key loan terms to borrowers.

FAIRBANKS CAPITAL CORP. Nov. 2003- The FTC along with HUD, announced a settlement with Fairbanks Capital Corp. and its parent company. 15 U.S.C. 45(a) 15 U.S.C. 1639 HOEPA TILA 15 USC 1601 et seq ECOA 15 USC 1691 et seq FCRA 15 USC 1681 et seq FDCPA USC 1692 et seq Harsh Mortgage terms, pre payment penalties, broker kickbacks, Judge: Mortgage Borrowers Entitled To Summary Judgment On Certain CLA, RESPA Claims

SEATTLE - A federal judge on March 15 ruled that mortgage borrowers in a class action are entitled to partial summary judgment on claims that a mortgage company violated the Washington Consumer Loan Act (CLA) and the Real Estate Procedures Act (RESPA) by failing to properly disclose the payment of a type of broker fees on good faith estimates (Cameron Pierce, et al. v. NovaStar Mortgage, Inc., No. 05-5835, W.D. Wash.; 2007 U.S. Dist. LEXIS 18336). Full story on lexis.com

In Adversary Proceeding, TILA Claim Dismissed, But RESPA Claim Survives, Judge Rules PHILADELPHIA - In an adversary proceeding brought by a Chapter 13 case, a Pennsylvania bankruptcy judge on March 13 dismissed a count asserting a claim for rescission and related damages under the Truth In Lending Act (TILA) but allowed a claim for damages under the Real Estate Settlement Practices Act (RESPA) to stand (Robert R. Cooley v. Wachovia Mortgage Co., et al. [In re: Robert R. Cooley], Chapter 13, Adv. No. 06-0279, Bkcy. No. 06-11586, E.D. Pa. Bkcy.; 2007 Bankr. LEXIS 923). Full story on lexis.com

11th Circuit Panel: Judge Erred In Dismissing Property Owner's TILA Complaint ATLANTA - A federal judge erred in dismissing a property owner's Truth In Lending Act (TILA) complaint as a civil action under Sections 1640(a) or 1641(a) of the TILA because the complaint actually stated a claim for rescission of the transaction under Section 1635 of the TILA, an 11th Circuit U.S. Court of Appeals panel ruled per curiam on Feb. 14 (Yolanda Parker v. Nancy Potter, et al., No. 06-13739, 11th Cir.; 2007 U.S. App. LEXIS 3391). Full story on lexis.com

Georgia Federal Judge Says Punitives May Be Proper In Foreclosure Case COLUMBUS, Ga. - A Georgia federal judge on Feb. 9 ruled that material issues of fact exist as to whether punitive damages are warranted in a case in which a couple alleges wrongful foreclosure against their mortgage lender (Michael J. Hauf, et al. v. HomEq Servicing Corporation, et al., No. 05-CV-109, M.D. Ga., Columbus Div.; 2007 U.S .Dist. LEXIS 9439). Full story on lexis.com