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Calif. Judge Dismisses Wells Fargo, FNMA Reverse Mortgage Lawsuit

reversemortgagedaily.com | January 9, 2014

A proposed class action representing heirs of reverse mortgage borrowers was dismissed by a California judge on Friday without leaving the plaintiff an opportunity to appeal.

The suit, brought by AARP on behalf of plaintiff Robert Chandler against Fannie Mae and Wells Fargo in 2011, was the second reverse mortgage lawsuit brought by AARP in 2011 following a suit brought against the Department of Housing and Urban Development that is being decided in a court of appeals.

U.S. District Judge Samuel Conti dismissed the proposed class action suit last week, stating the plaintiff’s home title did not back his claims.

Chandler, of Elk Grove, Calif., inherited the home of his mother, who had a reverse mortgage and passed away in 2010. The suit alleges that Chandler was never given notice of his right to purchase the property for its current value.

According to the allegations and AARP, Wells Fargo told him that he would have to pay off the full mortgage balance, then acting on Fannie Mae, the owner of the mortgage, proceeded to foreclose on the home. Finding no one willing to buy it for the same market price that Mr. Chandler was Fannie Mae began efforts to evict him from the property.

The suit was brought in 2011, around the time of the lawsuit brought against HUD, alleging Wells Fargo and Fannie Mae foreclosed illegally on the home following the death of Chandler’s mother, who was named on the reverse mortgage and was the only borrower named on the home title. The claims allege the bank and Fannie Mae wrongfully interpreted the Home Equity Conversion Mortgage statute when they foreclosed on Chandler’s home without offering the opportunity for Robert Chandler to purchase the home at 95% of its appraised value.

In dismissing the suit with prejudice, the judge deemed any additional efforts would be futile by eliminating the plaintiff’s chance to appeal the decision.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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