ConsumerWatch: Calif. Homeowners Warned About Lender Lawsuits
SAN FRANCISCO (CBS 5) – The California Department of Real Estate is warning homeowners to be wary of solicitations asking them to join so-called "Mass Joinder" lawsuits against their lenders.
Sherral and Benny Kline of Antioch received a solicitation a few days ago. "Our first thought was 'Wow, maybe we can keep our home,'" Mrs. Kline said. When Kline called and asked for details she was eventually told it would cost her $7,000 to join the suit against her lender, Golden Empire Mortgage, Inc.
Noah Zinner, a lawyer with Oakland-based housing rights advocacy group HERA said he has received numerous calls this week from clients who received letters informing them of the suits.
"We're very concerned that this is going to be another way to suck homeowners who are in distress into making payments they can't afford," Zinner said.
Zinner said while there are many lawsuits currently pending against banks and lenders, groups asking for an upfront fee is questionable. There is no guarantee of the outcome, and plaintiffs could lose their right to sue a second time if the first suit does not result in a favorable outcome, according to Zinner.
Both Zinner and the California Department of Real Estate urge homeowners considering joining any lawsuit to read the materials carefully, ask questions, and check the background and credentials of the attorney bringing the lawsuit.
Mass Joinder lawsuits represent multiple clients at once, who pay some fees to join the suit, and all receive the same judgment from the court.
California Depart of Real Estate Warning About Mass Joinder Lawsuits
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