Housing critics challenge Brown as hearing looms

Legal News Line Sep. 24, 2008, 1:19pm

Jerry Brown (D)

Lisa Madigan (D)

Mike Aguirre

BOSTON (Legal Newsline)-A panel of federal judges will hear arguments from at least six plaintiffs on Thursday, including lawyers from the California attorney general's office, asking the court to return the collection of lawsuits against Countrywide Financial Corp. to their local jurisdictions.

California Attorney General Jerry Brown, Illinois Attorney General Lisa Madigan and San Diego City Attorney Mike Aguirre have each told Legal Newsline they oppose the request to consolidate these cases into one federal court case made last month by Bank of America, parent company to the California-based mortgage company.

Countrywide has been sued numerous times for its alleged predatory lending practices that rewarded mortgage officials for placing customers in more expensive, high risky loans, which in turn has contributed to an epidemic of foreclosures.

Plaintiff attorneys from three similar private lawsuits will attend the U.S. Judicial Panel on Multidistrict Litigation held at Harvard University on Thursday.

According to Law.com, Aguirre will also request his lawsuit not be tangled in with Brown's, despite the overlapping jurisdiction. Aguirre wants to pursue a more aggressive stance against Bank of America, particularly in seeking to gain an injunction that would place a temporary moratorium on Countrywide's foreclosures, a move Brown has not agreed to support.

Madigan is also seeking a 90-day moratorium on foreclosures in a lawsuit filed in Cook County.

In addition to the moratorium, Aguirre supports a proposal for re-working subprime loans based on that used by Federal Deposit Insurance Corp. Chair Sheila Baer that ties loan payments to a maximum percent of income.

Brown's complaint seeks millions of dollars in civil penalties from Countrywide and its president and chairman, as well as an order that would stop the mortgage company's risky loan practices.

Brown has taken issue with criticism, coming from Aguirre and several California-based activist groups like the Greenlining Institute and San Diego's Mabuhay Alliance, that he is stalling legal action.

"We're driving this thing," Brown told a legal Web site earlier this week.

Brown said officials from the various activist groups were "grandstanding" because they have been largely left out of Brown's negotiations with Bank of America.

"I'm doing what is in the best interest of the people of California," Brown said.

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