California Real Estate Fraud Report

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22
Dec

Subprime Loan Mess: Manna for Defense Attorneys

The subprime meltdown could result in new business for white-collar defense attorneys according to Dan Levine’s article in Law.com, a legal news service.

New Century Financial Corporation, with its aggressive (to say the least) lending practices, led the die-off by announcing in Febuary 2007 that it would restate earnings. By not indicating how much it intended to restate, it drew the attention of the Securities and Exchange Commission, as well as a subpoena from the grand jury of the Central District of California. At latest, New Century, now in bankruptcy, has retained top-dollar defense attorneys from Latham & Watkins; Munger, Tolles & Olson; Skadden, Arps, Slate, Meagher & Flom; and Proskauer Rose, not to mention O’Melveny & Myers.

Levine notes that New Century is located in Orange County, which is home to five of the top 10 subprime lenders. Good news for criminal and civil defense attorneys based in Orange County and Los Angeles. Bad news for Wall Street investors if they are unable to prove that subprime lenders falsified loans, knew they were doing so, and failed to disclose their fraudulent practices to the investors.

The feds seem to be taking their time assessing what, if anything, they should be doing about the subprime debacle. State attorneys general, such as New York AG Cuomo, have taken the lead by suing, in Cuomo’s case, First American Corporation, for puffing home appraisals at the behest of its biggest customer WaMu (see article below).

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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