San Diego, CA (PRWEB) September 28, 2008
Nearly two dozen home loan borrowers filed a multi-million dollar unfair business practices and negligence case against Nationstar Mortgage, LLC, and Centex Home Equity, LLC. The lawsuit was filed on behalf of themselves and others similarly situated. The San Diego Superior Court case was filed as Case No. 37-2008-00092170-CU-BT-CTL on September 22, 2008. Nationstar Mortgage, LLC, is a Texas-based company which took over Centex Home Equity and maintained past mortgage loan operations in Southern California. The case is captioned Mark Richter, et al., v. Nationstar Mortgage, LLC, et al..
The complaint alleges that Centex Home Equity was not properly licensed to offer mortgages in the State of California and that it was selling securities without a license before being taken over by Nationstar. The plaintiff group contends that Centex Home Equity and Nationstar caused them to enter into bad loans which have now resulted in destroyed credit histories, foreclosures, and other damages.
The filing also cites numerous alleged violations of the federal Truth In Lending Act and California's Unfair Business Practices Act taking place over several years. The key allegations revolve around the contention that one Cindy Kelly, a branch manager for Nationstar's San Diego office in 2006, was fraudulently selling unregistered securities, foreign currency, and commodities during the lending process. It is alleged that misleading securities transactions were done with the constructive knowledge of Nationstar. It is further alleged that upper management failed to adequately supervise Ms. Kelly and that the company encouraged her to complete loan applications containing false and incomplete information. It is contended that profits were prioritized over good lending practices and avoidance of illegality.
The home loans were allegedly arranged through Nationstar and it is alleged that Kelly promised the borrowers that excess proceeds from loans would be used for high-yield investments with one Stonewood Consulting, Inc., a company now the subject of a Securities Exchange Commission proceeding in federal court in United States District Court (C.D.Cal.) Case No. CV 08-01323. One of the defendants in that action, who is alleged to have closely worked with Nationstar employees, has already agreed to a cease and desist order with respect to the sales of unregistered securities and has promised to provide restitution to the victims of the alleged fraud. Judgment was entered against one Maurice McLeod within the last 30 days. McLeod is alleged to have been a loan interviewer with regard to certain Nationstar-related loans.
Richard D. Ackerman, lead counsel for the plaintiffs, says, "This is just another step necessary to holding greedy lenders accountable for the crisis which has infected Wall Street. Had better supervision and control been maintained over lending practices, our nation would not be facing the horrific disaster which has destroyed our economy. The conduct of Nationstar employees is emblematic of the shameful conduct which has destroyed the lives of so many middle class Americans."