Unprecedented Civil Jury Verdict Finds Major U.S. Bank Guilty of Fraud Bank Breached Mortgage Agreement in Case Brought by U.S. Govt. Fraud Investigator
Jan 30, 2013 – Washington, DC: In October 2012, an historic civil jury verdict in the District of Columbia found that OneWest Bank, which also does business as IndyMac Mortgage Services, violated DC’s consumer protection law by breaching its contract and committing fraud against the plaintiff, Ross Yerger (“the customer”) – a Special Agent with the United States Secret Service. Actual damages were awarded and accompanied by punitive damages and attorney fees. This is the highest level at which any such case has been decided against a financial institution in favor of victory for the plaintiff.
This case is also being considered by the United States Attorney’s Office for additional action and has already been considered similar in nature to the current Bank of America lawsuit filed by the U.S. Government. The case citation is Yerger v. OneWest Bank, No. 2011 CA 000706 in the Superior Court for the District of Columbia. JR Howell, Esq. of JRH Legal Strategies represented the customer.
In August of 2009, OneWest Bank, solicited the customer into joining its “Equity Accelerator Program.” Under that program, OneWest promised to debit the homeowner’s mortgage payment in two bi-monthly installments every month for the remainder of the loan. OneWest said that the program would result in over $170,000.00 in interest savings and a gain of nearly $70,000.00 of equity in ten years. OneWest Bank’s promises were reduced to a written agreement.
The program was not executed as promised. The bank never debited any money from the customer’s account. However, the bank consistently charged the customer hundreds of dollars in late fees. The customer repeatedly cured the bank’s failures by making the mortgage payment manually, including the fees that were charged because the bank failed to make the debits. Each time he made these payments, he was told the debits would continue under the program as agreed. But that never happened.
Several months later, the customer was threatened with foreclosure. The bank’s lawyers told the customer to pay $9,878.22 to stop the foreclosure in August of 2010. The customer immediately paid this amount, but three weeks later the customer received that payment back from the bank, which said it was refusing to accept the payment. The foreclosure was scheduled for October 21, 2010.
The bank’s lawyers then demanded over $16,000.00 a few weeks later, otherwise it was going to sell the customer’s home in a foreclosure sale. The customer came up with the money. At trial, several thousands of the dollars were labeled as miscellaneous fees and remained unexplained. Hundreds of dollars were never applied to the customer’s account and remained unaccounted for at trial. A witness for the bank was unable to explain why the customer was charged several thousand dollars in unspecified fees and what the bank did with hundreds of dollars of the customer’s money.
A few days later, the customer was sent a mortgage statement rife with accounting errors, saying that the customer was a month behind on his mortgage-even though the bank told him that the $16,000.00 payment would bring him current. Even though the bank’s lawyers told him the accounting error was fixed, the following month he was sent a mortgage statement demanded three times his regular mortgage payment. OneWest Bank refused to accept the amount of the regular monthly mortgage payment and demanded the customer pay the full amount that they insisted. In deposition, the witness for the bank confessed that these statements were mistakes. But at trial, the witness recanted this statement and restated that the November 2010 statement was accurate. Neither the bank, nor an independent auditor completed an audit of the customer’s account.
The lawsuit began in January of 2011. When the summons was served on the bank, the customer’s legal counsel sent a letter with the complaint, explaining that there was no need for litigation to fix this issue and that the parties could negotiate their differences amicably. There was no response to the letter. Instead, OneWest Bank forced the customer to undergo two years of protracted litigation, as well as surveillance on the residence by the bank’s contractors and other harassment.