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The True Color of Race — The Struggle to Stop Predatory Lending and Foreclosure Fraud in Urban America; U.S. Government Issues New Guidelines to Prevent Predatory Lending D.C. Resident files $3 Million Federal Lawsuit against ABN AMRO Mortgage Group and Baltimore-based law firm for fraud, civil conspiracy and consumer protection violations Washington, D.C. (PRWEB) February 8, 2005 -- At a time when home ownership rates are soaring, a quiet epidemic is swirling through Urban America: predatory lending and foreclosure fraud by unscrupulous mortgage companies seeking to swindle urban homeowners out of properties with appraised values that dramatically exceed the value of the mortgages held. Mr. Calvert M. Wilson, an African-American and a lifelong District of Columbia resident, was one such victim. On January 19th, 2005, Mr. Wilson and the Washington office of Tennessee’s Andrews & Bowe, PLLP, filed a $3.0 million federal lawsuit against ABN AMRO Mortgage Group, Inc. (“ABN AMRO”) and certain attorneys with the Baltimore, MD based law firm of Friedman & MacFayden, PA (the “Friedman Law Firm”) alleging that ABN AMRO and representatives of the Friedman Law Firm concocted a scheme to defraud him out of his residence in the lucrative Northeast Capitol corridor of D.C. [Wilson v. ABN AMRO Mortgage Group, Inc. et al., No. 1:05-CV-00108 (D.D.C. filed Jan. 19, 2005).
According to allegations in the federal lawsuit, on several occasions ABN AMRO artificially increased the amounts allegedly due under Mr. Wilson’s mortgage account for his home in Northeast D.C., declared a default when he could not pay the artificially inflated sums, and then hired the Friedman Law Firm to pursue foreclosure of his home. The lawsuit also contends that the value of the home has increased substantially since it was purchased by Mr. Wilson in December 1996, and is now worth at least four times the value of the note on ABN AMRO’s books, according to a recent property appraisal.
When Mr. Wilson and his lawyers made verbal and written requests for back up information on the source of the mortgage payment increases and related charges, ABN AMRO and the Friedman Law Firm either feigned ignorance about the matter or refused to provide actual details concerning Mr. Wilson’s mortgage account. In addition to these alleged abuses, the lawsuit also states that as a result of ABN AMRO’s misconduct, Mr. Wilson was forced to obtain a short term, sub-prime loan from a third party finance company to cure the default, and further, that on more than one occasion, when Mr. Wilson attempted to pay off the debt, the Friedman Law Firm, apparently on instructions from ABN AMRO, refused to take his money.
“I did everything they asked me to do, and they still tried to take my property,” said Mr. Wilson. “God has blessed me with the strength to overcome this obstacle. As a working man, I felt it was my duty to fight to save my property not only for myself and my family, but for all the other hard-working folks who are up against it like myself. I was not going to let AMRO or anybody else take my property without fighting for it. This lawsuit is about more than just money or home-ownership, it is about the survival of the American Dream for all working folks”, added Mr. Wilson. Mr. Wilson’s Attorney also was stunned by the unlawful and cold-hearted manner in which his client was mistreated by ABN AMRO and its lawyers.
"Mr. Wilson’s case represents yet another instance when African Americans and Latin Americans are offered financial products and services that are designed not only to exploit individuals, but our community as a whole, by placing home ownership, the very cornerstone of the 'American Dream', out of our reach.” said attorney Rawle Andrews Jr., lead counsel for Mr. Wilson in the federal lawsuit.
"It’s equally discouraging and disgusting that in 2005, a large, multi-national corporation like ABN AMRO is more concerned with getting its way than respecting the law, and the rights of its customers. ABN AMRO’s blatant and repeated manipulation of the loan terms of Mr. Wilson’s mortgage, which prevented him from remaining current on his payments, and the Friedman Law Firm’s apparent willingness to aid and abet this misconduct, show a pattern and practice of fraud and abuse by both the foreign-owned bank and its outside attorneys that cannot be tolerated or excused.” Andrews added.
The filing of Wilson’s lawsuit is not the only recent attack on predatory lending. On February 2, 2005, the U.S. Office of the Comptroller of the Currency (OCC), a federal agency, issued new Residential Real Estate Lending Standards. These new federal standards (Title 12 CFR Part 30) are specifically designed to stop the wide-spread practice of predatory lending by large banks, mortgage companies, sub-prime financiers, mortgage brokers, and their affiliates.
“The decision by the federal government to issue new standards to curb predatory lending drives home the point that Mr. Wilson’s problem is not just an isolated incident in Urban America. Predatory Lending is an 'American Nightmare' that affects homeowners in 'Red States and Blue States' through out this country. Although we applaud the Federal Government’s decision to issue new mortgage lending standards, it remains to be seen whether this is a first down or a touchdown in the struggle to stop predatory lending and foreclosure fraud. With all the time and billons of dollars that these big banks and mortgage companies have invested in maintaining the status quo, it would be premature to think that any of these lenders are going to raise the white flag simply because the federal government and consumers have drawn the line on these illegal business practices.” stated Andrews.
As part of the lawsuit, Mr. Wilson is requesting that the D.C. Federal Court issue an injunction to stop these allegedly unlawful and inequitable foreclosure and collection activities against him, an order directing ABN AMRO to make corrections to his credit report, and $3.0 million in compensatory and punitive damages to remedy the fraud and abuse directed against him.
No trial date has been set in the case.
Related Links: Predatory Lending and Foreclosure Fraud Impacts Minorities Most http://www.greaterdiversity.com/mt_career/archives/2005/02/predatory_lendi.html
Predatory Lending: Inner City Press Releases Analysis of Mortgage Disparities; HOEPA Loans Are Still Being Made, Banks Break Prior Commitments
The Office of the Comptroller of the Currency (OCC) Issues Guidelines to Prevent Predatory Residential Mortgage Lending Practices: http://www.occ.treas.gov/scripts/newsrelease.aspx?Doc=ERNFCQX9.xml
U.S. Senate Banking Committee: Questions Treasury, FED on Handling of ABN AMRO http://banking.senate.gov/index.cfm?Fuseaction=Articles.Detail&Article_id=67&Month=10&Year=2004
Federal Reserve Board (FRB): Supervisory Agreement with ABN AMRO Bank to improve anti-money laundering procedures and practices http://www.federalreserve.gov/boarddocs/press/enforcement/2004/20040726/
ABN AMRO PowerPoint Presentation to the N.Y. Federal Reserve Bank regarding Quality Control Problems http://www.newyorkfed.org/newsevents/events/banking/2003/con0529h.pdf
Agencies release bank supervisory and penalty actions against ABN AMRO Bank, N.V. http://www.federalreserve.gov/BoardDocs/Press/enforcement/2005/20051219/default.htm
Dutch Bank Fined for Iran, Libya Transactions ($80 Million Levied For Foreign Dealings, Money Laundering) http://www.washingtonpost.com/wp-dyn/content/article/2005/12/19/AR2005121901804.html
LaSalle Bank hit with security breach(ABN AMRO U.S. mortgage unit loses data tape) http://www.chicagobusiness.com/cgi-bin/news.pl?id=18835
ABN Still Not Allowed To Buy In US http://www.newratings.com/analyst_news/article_1164209.html
ABN Amro Execs to Return Bonuses After Fine http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20051220&ID=5352848
HUD ANNOUNCES LANDMARK $41 MILLION SETTLEMENT AGAINST ABN AMRO http://www.hud.gov/news/release.cfm?content=pr06-002.cfm
DOJ: $41 Million Settlement with ABN AMRO Mortgage Group, Inc. Involving Federally Insured Mortgages http://releases.usnewswire.com/GetRelease.asp?id=58825
ABN Amro to Forfeit $41 Mln for U.S. Mortgage Errors http://quote.bloomberg.com/apps/news?pid=10000006&sid=aLnHaf_vfnlU&refer=home
NCRC Releases Best and Worst Lenders: A Consumers' Guide Lenders Ranked in 25 Metropolitan Areas http://www.ncrc.org/policy/cra/best_worst_03.php?section=cra/best_worst_03
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