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Groups likely to 'bypass' Brown in search of foreclosure moratorium
Jerry Brown (D-Calif.)
Lisa Madigan (D-Ill.)
SACRAMENTO, Calif. (Legal Newsline)-More than five days have passed since two groups working to stem the tide of foreclosures in California appealed to Attorney General Jerry Brown for help.

With still no word from Brown's office, the Greenlining Institute and the California Reinvestment Coalition, are planning on taking their collective request for a moratorium on all foreclosures sought by Countrywide Financial Co. to attorneys general in other states.

Robert Gnaizda, general counsel for the Greenlining Institute, told Legal Newsline on Wednesday that Brown's silence won't delay the initiative to protect California homeowners.

"We will be contacting," Gnaizda said, "Connecticut Attorney General (Richard) Blumenthal and the Illinois Attorney General to, if necessary, bypass the California log-jam, and seek a preliminary injunction."

In a letter sent on Aug. 6 to Brown, the two groups urged the Democratic attorney general to seek a moratorium that would stop all Countrywide foreclosures.

The California Reinvestment Coalition advocates for low-income people and minorities, with a focus on ensuring fair access to banking and financial institutions. The Greenlining Institute us a multi-ethnic policy research and advocacy organization.

Gnaizda believes the foreclosure crisis in California could lead to between 725,000 to 900,000 foreclosures by the time Gov. Arnold Schwarzenegger leaves office in 2010, unless an injunction is obtained.

Minorities and working-class families have been hit disproportionately harder by the crisis because "they were the target of the most unscrupulous sub-prime lending practices," he said.

Brown was the first to sue Countrywide for its allegedly fraudulent lending practices, which Brown asserts included bonuses for lending officers that placed people in loans with higher interest or higher risk.

Blumenthal (D), Illinois Attorney General Lisa Madigan (D) and Florida Attorney General Bill McCollum (R) have filed similar lawsuits against the lender.

On Tuesday, West Virginia Attorney General Darrell McGraw, a Democrat, became the latest to file suit against Countrywide.

Gnaizda said he thinks Brown is engaged in "secret negotiations" with Bank of America, the North Carolina-based financial giant that recently purchased Countrywide. A request for comment from the Attorney General's office was not returned.

In addition to seeking help from state attorneys general, Gnaizda said he expects help from the city of San Diego.

"We are also working with San Diego City Attorney (Michael) Aguirre," Gnaizda said, "who has informed us that they will be seeking a preliminary injunction in the near future."

On July 31, Aguirre sent a letter to attorneys for Bank of America urging the company to declare a voluntary moratorium on sup-prime Countrywide mortgages.

"During the proposed moratorium," Aguirre said, "Bank of America would agree to make reasonable efforts to contact the borrower and take all reasonable steps to resolve their differences, including participation in mediation before an independent mediator selected by the parties."

A week earlier, Aguirre filed a civil complaint in San Diego Superior Court against Countrywide and Bank of America alleging Countrywide engaged in a "pattern of unlawful, fraudulent or unfair predatory real estate lending practices," according to a press release issued by the City Attorney's office.

A message left with the City Attorney's office was not returned.

Filed Under: Hot Topics


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MORE NEWS HEADLINES:
+ Obama moves foreclosure crisis center stage - 11/19  
+ California activist touts foreclosure relief in D.C. - 11/18  
+ Foreclosure relief effort loses ally in Aguirre - 11/18  
+ Foreclosures rise again; 84,000 more lose their homes - 11/13  
+ Countrywide settlement may favor Wall Street over Main Street - 11/11  
+ Wasden publishes manual on mortgage fraud and foreclosure - 10/23  
+ Foreclosure rates slow, but overall progress is mixed, report fin... - 10/23  
+ Countrywide settlement not impacted by case consolidation - 10/20  
+ San Diego City Attorney sues Wachovia - 10/15  
+ Countrywide cases consolidated in San Diego - 10/14  


IN THE SPOTLIGHT:
Tuesday, November 18, 2008
NEW YORK (Legal Newsline) - The argument over $14 million in attorneys fees from a $100 million state settlement will be settled in a Mississippi court, and state Auditor Stacey Pickering thinks the decision may come quickly.
Read more...


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