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San Diego City Attorney Mike Aguirre, along with attorneys general from California and Illinois, will go in front of a panel of judges at Harvard Law School next month to find out where their cases against subprime mortgage lender Countrywide Financial will be heard.
Aguirre and the other prosecutors have sued Countrywide — and its parent Bank of America — alleging a variety of deceptive lending practices by Countrywide, specifically in their dealings with subprime borrowers.
Aguirre’s suit, filed last month, asks the court to stop foreclosure proceedings on loans that have a specific set of characteristics; including those with a 100 percent loan-to-value ratio, a teaser rate that is at least 3 percent less than the rate it would eventually reset to, and a payment that would push the borrower’s debt-to-income ratio over 50 percent.
The other suits seek damages on behalf of borrowers who were foreclosed on by Countrywide. Countrywide filed a successful motion to remove the cases to federal courts, and they were in turn sent to the United States Judicial Panel on Multidistrict Litigation. This panel of judges, which is scheduled to convene Sept. 28 at Harvard, will determine in which jurisdiction the cases will be heard.
“San Diego is being hit very hard by foreclosures, and we are helping to play a role on the national level to bring justice to the borrowers,” Aguirre said Thursday.
He also said he will ask San Diego City Council on Sept. 9 to declare a “foreclosure crisis” in the city.