Mortgage Lenders Order To Pay $99,000,000.00 In Punitive Damages
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Missouri residents who were charged illegal fees for second mortgages have been awarded $99,000,000.00 in punitive damages against three mortgage lenders for their misconduct.
The jury, sitting in state court in Jackson County, Missouri had previously found that these defendants owed the plaintiffs 5.1 million dollars in actual damages. The three defendants are Residential Funding Company LLC, Household Finance Corporation III and Wachovia Equity Servicing LLC.
The actual damages suffered by the plaintiffs as a result of the illegal conduct of the three mortgage companies occurred because the original lender had charged the victims excessive interest and illegal charges for origination fees, loan discount fees, underwriting fees, processing fees, document preparation fees, and legal fees.
The original lender who charged the illegal and excessive fees was Mortgage Capital Resources Corp.
The three mortgage companies listed above purchased these tainted loans from Mortgage Capital Resources Corp which is no longer in business. The former chief executive of the now defunct mortgage company is in prison for mortgage fraud.
The three mortgage companies who purchased the tainted loans defended the suit based upon their contention that they were entitled to rely upon assurances from Mortgage Capital Resources Corp that the loans fully complied with state law.
After the jury awarded 5.1 million in actual damages, in the first phase of the trial, came back to court to decide the issue of punitive damages in the second phase of the trial.
The State of Missouri has a set of laws known as the Second Mortgage Loan Act. Under this Act, many of the fees charged by the lenders were illegal.
The lawyers for the plaintiffs in this class action suit proved that the three mortgage companies knew of the lender's fraudulent conduct and "stepped into its shoes".
The case had been certified as a class action. Missouri residents who obtained second mortgages from Mortgage Capital Resources will be eligible to share in the damage Award. It is estimated that a total of 324 Missourians will qualify as members of the class.