The Morning Report
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At a hearing at Harvard University today, City Attorney Mike Aguirre argued that his case against Countrywide Financial Corp. should be heard in San Diego. He called Countrywide’s request a delay tactic to prolong the legal process and keep foreclosing on homes.
Aguirre joined lawyers representing California Attorney General Jerry Brown and the Illinois attorney general to push back against a request from the mortgage giant that all of the lawsuits filed against it be consolidated into one big federal case. The attorneys argued that their individual cases, filed against Countrywide, now owned by Bank of America, for its alleged predatory lending activity, should be heard in their local jurisdictions.
Aguirre expected an answer within a week.
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.
I talked to Aguirre this morning about the hearing and he said it was “very positive.” He said to illustrate his reasoning for wanting the case heard in San Diego, he asked the courtroom some rhetorical questions using context that only a local judge would understand: “How would you handle foreclosures in Skyline? How would you handle a foreclosure in Encanto?”
“That’s what they took off on,” he told me.
Contrasting his case from the ones filed by the attorneys general in other states, Aguirre said he’s fighting for the foreclosure proceedings to be stopped, not for damages or penalties.
“We don’t want damages, we want people in their homes,” he said.
From a LegalNewsline account of the hearing:
“We are suffering dearly in San Diego,” Aguirre said. “We are trying to stop all those foreclosures so we don’t destroy those neighborhoods. Many of those homeowners, even though they are current, are having trouble selling or refinancing because of all the vacant properties around them.”
Aguirre said he was encouraged in speaking with the other legal teams assembled, including the lawyers representing the California Attorney General’s office.
“They did a good job,” Aguirre said of Brown’s legal team.
Aguirre and Brown have sparred publicly in recent weeks over Brown’s lack of support for a foreclosure moratorium, something Aguirre has been an outspoken proponent of. …
Brown has said in recent weeks that Aguirre was simply “grandstanding” while his office did the serious work of negotiating a settlement with Bank of America.