Friday, April 30, 2010

AMC v. AMCs: First American CoreLogic sues Fiserv, IntelliReal, et al.

First American CoreLogic -- currently a subsidiary of First American Corp. in Santa Ana, CA but soon to be an independent company under the name CoreLogic -- has filed a lawsuit against a number of appraisal management and technology companies: Fiserv, IntelliReal, Interthinx, Lender Processing Services, Precision Appraisal Services, Real Data, Realec Technologies and Zillow.  It's not the kind of case you might expect about . . .


[A complete and updated version of this article is available to LIA insureds and READI members at readimember.org.  READI is the Real Estate Advisors Defense Institute, created by LIA to protect appraisers, advocate on their behalf and provide straightforward information about the legal issues that affect them.  You can read more about READI at readimember.org.]
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Wednesday, April 28, 2010

Information for Borrowers Thinking About Suing an Appraiser

Here are the main reasons why suing an appraiser is a bad strategy for borrowers, based on my experiences as a lawyer:
  • Most claims by borrowers against appraisers are unsuccessful.


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Monday, April 26, 2010

Downey Savings' Missing Loan Data: FDIC v. SK Hart

In some of the professional liability cases filed by the FDIC in connection with failed banks, the records available to the FDIC's attorneys have seemed incomplete. This case may explain part of the reason why.

On April 2, the FDIC sued a Utah-based real estate investment company named SK Hart Bayview LLC. In the lawsuit, the FDIC demands that SK Hart be ordered to return thousands of pieces of computer equipment that the FDIC sold to SK Hart in 2009. The equipment and data on it formerly belonged to Downey Savings. After the FDIC seized Downey

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Tuesday, April 20, 2010

The Single Biggest Liability Threat to Appraisers: the FDIC

The FDIC has taken over more than 80 failed banks since January 1, 2008. When the FDIC takes over a bank, it starts considering potential claims against parties from whom it may be able to recoup some of the failed bank's losses. The FDIC has retained private law firms for the specific purpose of pursuing such claims. With so many attorneys engaged, the FDIC publishes a handbook for them.

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Thursday, April 8, 2010

Federal Judge Dismisses Eight Homeowner Class Actions Alleging Inflated Purchase Prices

On March 31, 2010, Judge Virginia Phillips in the U.S. District Court for the Central District of California dismissed eight homeowner/borrower class actions against home builders and their affiliated mortgage companies.  Filed on the same day by the same group of law firms, the eight lawsuits alleged that the builders and mortgage companies had schemed to inflate the price of homes paid by the homeowners at the peak of the housing bubble in 2004-2006.  The homeowners alleged that the builders and mortgage companies purportedly concealed that the purchases were risky and likely to lose value -- due to, among other things, the risk that many borrowers in the developments would default on their mortgages.

The lawsuits dismissed had named the following defendant builders and their affiliated mortgage companies: Standard Pacific, Lennar Corp., Richmond American Homes Corp., The Ryland Group, Inc., Centex Corp., D.R. Horton, Shea Homes, Inc., and Beazer Homes USA, Inc.  All of the cases had been transferred to Judge Phillips because of their similarity and common allegations.

The legal reasoning applied by Judge Phillips in each order dismissing the cases is identical.  Several of the orders are available here and are worth reading.  Here is part of Judge Phillips' reasoning:

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Thursday, April 1, 2010

The Wheels of Justice Turn Slowly for BofA in its Lawsuit against MGIC over Rotten Reviews

We previously reported that MGIC had removed to federal court Bank of America's (technically its subsidiary Countrywide's) lawsuit against MGIC partly regarding rotten review appraisals.  We also reported our view that it was quite likely that MGIC would challenge Bank of America's ability to sue in court on the basis that the allegations in the complaint are subject to mandatory arbitration under the parties' insurance contracts.

Here's an update.  After the case landed in federal court, Bank of America filed a motion for remand -- a motion asking that the federal court judge push the case back down to the state court where Bank of America originally filed the lawsuit, in this case San Francisco Superior Court.  MGIC -- who lists no less than six attorneys on its behalf in its latest pleading -- then filed a demand for arbitration with the American Arbitration Association on February 24, 2010, seeking to have the 1,400 denied claims at issue arbitrated in private.  MGIC made the demand for arbitration under an arbitration clause in the various insurance policies it issued to Countrywide. 

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