Newport Beach, CA (Vocus/PRWEB) February 15, 2011

Brookstone Law, Pc, has filed a mass joinder lawsuit against Bank of America, potentially the most substantial and precedent setting legal action taken against lenders as a result of the national foreclosure crisis, it was announced these days by Vito Torchia, Jr., managing lawyer of Brookstone Law Computer.

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The lawsuit alleges Bank of America (BOA) and its subsidiary Countrywide Monetary Corporation (Countrywide) perpetrated a huge fraud, also constituting unfair competition upon borrowers that devastated the values of their residences, resulting in the loss of net worth, and that BOA and Countrywide intended to deprive many rights and remedies for the difficulties they caused the borrowers. The case is Wright et al v. Bank of America, N.A. et al., case no.30-2011-00449059-CU-MT-CXC filed in Orange County Superior Court and was filed February 9, 2011.

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This was the ultimate high-stakes fraudulent investment scheme of the final decade, said Vito Torchia, Jr. Couched in banking and securities jargon, the deceptive gamble with customers properties was a financial fraud perpetrated on a scale never ever ahead of observed in this country,

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The lawsuit accuses Countrywide founder and CEO Angelo Mozilo of realizing that Countrywide could not sustain its organization unless it utilised its size and massive industry share in California to systematically generate false and inflated home appraisals all through California. It additional claims that Countrywide employed these false house valuations to induce borrowers into ever-larger loans on increasingly risky terms and that Mozilo knew as early as 2004 that the loans had been unsustainable and would outcome in a crash that would destroy the equity invested by borrowers and their net worth.

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The lawsuit’s filing coincides with a current decision in a class action suit in Maryland that invalidated a lot more than 10,000 foreclosure circumstances managed by GMAC Mortgage because affidavits in the instances had been signed by a GMAC robo-signer who, according to court documents, attested to the authenticity of foreclosure documents with no any understanding about them, as effectively as signing other false statements in the case Manson v. GMAC Mortgage LLC, 08-cv-12166, U.S. District Court, District of Massachusetts (Boston).

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According to court documents, the lawsuit claims Mozilo and other people at Countrywide pooled those mortgages and sold them for inflated worth which disregarded underwriting requirements and fraudulently inflated house values in order to take enterprise from legitimate mortgage-providers, implement a massive securities fraud that was concealed from borrowers and other mortgagees on an unprecedented scale. When Countrywide pooled the loans and sold them, the company recorded gains on the sales. In 2005, Countrywide reported $ 451.six million in pre-tax earnings from capital market sales and the next year it reported $ 553.5 million in pre-tax earnings from that activity.

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Countrywide did not care about the borrowers who would endure due to the fact their plan was primarily based on insider trading that would generate income for them as lengthy as achievable and then allow them get out before the truth of their activities was exposed and losses have been locked in, said Vito Torchia, Jr. According to Torchia, the scheme resulted in the mortgage meltdown in California that was substantially worse than in any other area of the United States. Beginning in 2008, Californians property values have decreased by considerably much more than most other places in the United States as a direct outcome of the scheme.

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The lawsuit alleges that, as a outcome, borrowers lost equity in their houses, their credit ratings and histories were destroyed and they incurred unnecessary fees and expenditures. At the exact same time, Countrywide was paid billions of dollars in interest payments and charges and generated billions of dollars in earnings by promoting their loans at inflated values. Countrywide then employed borrowers private data to generate much more income: the lawsuit also alleges privacy violations ranging from disclosure of the private and confidential details of far more than 2.four million customers to outsourcing and sale of hundreds of thousands of records to bolster the fraudulent loan pooling scheme, resulting in the disenfranchising of thousands of borrowers inalienable rights of privacy.

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According to court documents, lead Plaintiff John Wright purchased his first house in 2004 and Countrywide offered financing with a first and second loan. Less than a year later, Countrywide contacted Mr. Wright and encouraged him to refinance into an adjustable rate loan. As a initial time home purchaser who relied on Countrywide and their reputation and experience, he accepted their direction, which resulted in a new very first loan in 2005. But right after the damaging effects of sub-prime loans became public in 2007, Mr. Wright contacted Countrywide to refinance his loan into a fixed rate loan, but this time, Countrywide said they have been also busy and that he must wait to refinance, in spite of the truth that fixed price loans had been then at about a reduce interest rate than what he was paying.

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“The American men and women are no longer going to tolerate fraudulent and abusive banking strategies and we are organizing the most powerful protest and legal action Bank of America has ever noticed, John Wright stated. Piggybankblog.com, myself and my supporters are a force to be reckoned with and we intend to construct the most successful coalition that the Bank of Destroying and Abusing America has noticed although the American people hold them accountable for their actions that led to the destruction of the American dream for so many men and women like me.”

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According to the filing, Countrywide eventually permitted Mr. Wright to refinance and the company suggested an appraiser who offered an appraisal that later turned out to be inflated. When Countrywide refinanced his loan into a new fixed loan it was at a larger price than that which was offered to him when he started the procedure. The lawsuit claims that this churning of his mortgages allowed Countrywide to reap several charges, income and greater interest prices at Mr. Wrights expense. Soon after permitting him to refinance, Countrywide then erected several obstacles to Mr. Wrights attempts to modify his loan due to difficulty making payments and when they did, they approved a loan modification that lowered his payments of a lot more than $ 3,300 a month by only about $ 61.

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In 2007, when Mr. Wright retained a law firm to help him, Countrywide falsely claimed they had in no way received a letter from Mr. Wrights representatives, that his legal counsel was not a genuine law firm and instructed him not to use an attorney to receive support with his loan modification.

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I cannot help but conclude that as a direct outcome of my experiences and Bank of America’s potentially irregular, fraudulent and simply abusive home loan modification method, we are losing our potential and appropriate to pursue the American dream of life, liberty and the pursuit of happiness, John Wright stated. Thats why it provides me fantastic pleasure to participate in this lawsuit, which I contact “The American People vs. Bank of America.”

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Then, following Countrywide changed its name and became a subsidiary of BOA, and even though BOA was conscious Mr. Wright was represented by a law firm, the Bank started a series of harassing phone calls to Mr. Wright searching for payments for the loan. Court documents show BOA subsequently engaged in delaying techniques which includes claiming essential documents have been missing or never received even though they had been sent repeatedly to BOA by Mr. Wright. BOA then assured Mr. Wright that he had nothing at all to be concerned about and apologized to him, blaming their personal incompetence for the lost documents.

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Court documents show Mr. Wright then received a letter from BOA that denied the loan modification and demanded a lump sum payment. Mr. Wright called BOA and was told to disregard that letter and that he was q

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