On behalf of a proposed class of distressed homeowners residing in New Jersey and Pennsylvania, BHN Law Firm filed a Complaint in the United States District Court for the District of New Jersey against Wells Fargo Bank, N.A. (Wells Fargo) and one of its principal foreclosure law firms.
The caption of the Complaint, filed on October 24, 2011, is Giles v. Phelan Hallinan & Schmieg, LLP, 1:11-cv-06239 (D.N.J.).
The Complaint alleges that Wells Fargo and Phelan, Hallinan & Schmieg (Phelan), a high-volume foreclosure law firm in Pennsylvania and New Jersey, engaged in a fraudulent scheme to "pile on" unlawful foreclosure fees from financially troubled families on the brink of losing their homes. The lawsuit contends that, to carry out the scheme, defendants systematically filed falsified complaints, affidavits and mortgage assignments to bring foreclosure actions in the name of parties without legal standing to sue.
The Complaint explains that, beginning in 2005, Phelan adopted a business model in which companies under its ownership and control provide "default management services" incidental to foreclosures, such as title searches, notary public certifications, investigations and service of process. The hallmark of the business model is barebones cost, automated rapid speed, indifference to quality, grossly inflated charges, and millions of dollars in unearned profits obtained by Phelan and its mortgage servicer clients at the expense of defrauded homeowners.
Documents filed with the SEC reveal that, in 2009 and 2010 alone, Phelan and its affiliated companies obtained $48 million in "default services" fees from just one of their many clients -- Fannie Mae -- a government sponsored enterprise in which the brother of Phelan's senior partner held a top management position as Executive Vice President and Chief Risk Officer.
No comments:
Post a Comment