SAN DIEGO (Legal Newsline)-A federal panel that met in September ruled on Tuesday that all lawsuits filed from across the nation against Countrywide Financial Corp. for its alleged predatory lending practices will be consolidated and heard in the U.S. District Court in San Diego.
San Diego City Attorney Mike Aguirre said the move makes San Diego "ground zero in the legal battle to stop foreclosures," during a press conference on Tuesday.
California and Illinois attorneys general settled their respective lawsuits in early October for a record $8.68 billion. But the terms of the actual settlement still must be hammered out and approved by a judge. Lawsuits from several other states will now be sent to the federal court.
Aguirre is the only city attorney to have sued Countrywide. He has not yet settled his suit, but earlier in the week said he was close to doing so. The most significant issue, he said, was sufficient support to have loans reworked to a fair level of value, and that foreclosure efforts would stop while the process took place.
The decision by the Multidistrict Litigation panel will allow him to work more closely in the negotiations, he told Legal Newsline on Tuesday following the announcement.
"This is a major development," he said. "I've already called the California Attorney General's office and extended a hand of friendship and said 'let's work together.'"
Aguirre and California Attorney General Jerry Brown were critical of each during the negotiations with Bank of America, which bought the California-based mortgage company in July.
Aguirre said the settlement announced by Illinois and California was the first positive step, but now, "now the mechanics of nailing all that down will move forward. Because we've taken the strongest position, this is a very good start."
The MDL panel selected the Southern District of California "because (1) two of the seven actions in this docket are pending in this district, (2) Countrywide's principle place of business is in California, and parties, witnesses, and documents may be found there, and (3) the Southern District of California has the capacity to handle this litigation," the court ruling states.
Lawyers from California and Illinois and Aguirre asked the panel to remand each case back to its local jurisdiction, a move the court rejected. Still, Aguirre said the move to send the cases to California will help pursue action to keep families in their homes and "rework these predatory loans that should never have been issued in the first place," Aguirre said. "Keeping families in their homes is clearly a better option than destroying neighborhoods."