FOR IMMEDIATE RELEASE
The Wroan Law Firm, Inc.
LOS ANGELES, CA (January 5, 2011)
One of the longest running cases involving the lending crises in California has just become more interesting and potentially even more complex.
The case is little known and has not been reported on but is unusual because it was initially filed nearly three years ago in March of 2008 but until recently had been stayed by the court. Now, on January 25th the Los Angeles Superior Court will hear a motion by the Plaintiffs to amend their complaint in order to pursue their case as a class action.
Case No. BC 386920 has all the familiar facts and allegations of other similar cases around the country including forged loan documents, misrepresentations and fraud but is noteworthy because it also includes a dispute over the interpretation of a Master Repurchase Agreement (“MRA”) between two of the defendants Accredited Home Lenders, Inc. and Wachovia Bank, N.A. These so called ‘repurchase agreements’ have recently come under scrutiny with the revelation last month by the New York State Attorney General’s office that it has filed a complaint against the accounting firm Ernst & Young for failing to properly characterize such transactions as loans rather than as ‘purchases or sales’.
In addition, the case is also significant because it calls into question the validity of a foreclosure services agreement (“FSA”) in which legal services were performed and provided by non licensed entities and individuals conducting foreclosures in the states of Washington, Nevada, Virginia and California. The claims of unauthorized practice of law, unfair competition and trade practices are the first of its kind in California but have been raised in other cases most notably In re Thorne v. Prommis Solutions Holding Corporation, Lender Processing Services, Inc., LPS Default Solutions, LLC et al. in the United States Bankruptcy Court for the Northern District of Mississippi Case No. 09-11763-DWH.. In that case the U.S. Department of Justice recently joined in as a plaintiff in November 2010.
For a copy of the proposed complaint see:
For a copy of the Exhibits including the MRA and ‘Foreclosure Services Agreement’ see: