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City Attorney Mike Aguirre announced today that several cases against Countrywide Financial Corp. will be transferred to be heard in federal court in San Diego. That includes his case, the cases filed by the attorneys general of California and Illinois, and several cases filed by private individuals in California and Kentucky against the lender alleging predatory lending practices. Aguirre expected other “tag-along” cases to be transferred here, too.
The attorneys general from California and Illinois announced a settlement last week expected to end their litigation and the lawsuits filed by nine other attorneys general against the corporation. Under that settlement, Countrywide, now owned by Bank of America, agreed to modify the mortgages of nearly 400,000 borrowers. But the settlement didn’t drop the legal action against several Countrywide executives, including Angelo Mozilo, David Sambol, Stanford Kurland and Carlos Garcia.
After the court receives all of the documents for these cases, the judge will likely oversee the terms of that settlement and organize the rest of the litigation against Countrywide and the former executives, Aguirre said.
The move to have the case heard here in San Diego was a cornerstone of Aguirre’s remarks in front of the United States Judicial Panel on Multidistrict Litigation, where he argued at a hearing at Harvard University last month,.
The “center of gravity” in the predatory lending litigation across the nation will now be in San Diego, Aguirre said this afternoon in a press conference.
According to the transfer document filed by the panel, San Diego was chosen for three reasons: Two of the cases in the docket were filed in the Southern California district, Countrywide’s home base is in Southern California and the courts here have “the capacity to handle this litigation.”
Aguirre also said he would be filing a suit against Wachovia this afternoon in keeping with his efforts to enact a foreclosure moratorium in San Diego for subprime predatory loans.
“Just a few months ago, what seemed an ambitious objective — to stop foreclosure … that proposal seemed ambitious, but it now is common sense,” Aguirre said, referring to calls around the country for a moratorium on foreclosures. “San Diego is helping to lead the nation in an important part of the economic situation.”
David Karlin, deputy city attorney, said the transferred Countrywide cases will likely reach San Diego courts by the end of 2008.