According to the complaint, \u201cCountrywide’s founder and CEO, Angelo Mozilo determined that Countrywide could not sustain its business \u2018unless it used its size and large market share in California to systematically create false and inflated property appraisals throughout California.\u00a0 Countrywide then used these false property valuations to induce Plaintiffs and other borrowers into ever-larger loans on increasingly risky terms.\u2019<\/p>\n
The complaint continued.\u00a0 \u201cMozilo knew \u2018these loans were unsustainable for Countrywide and the borrowers and to a certainty would result in a crash that would destroy the equity invested by Plaintiffs and other Countrywide borrowers.\u00a0 Mozilo and others at Countrywide \u2018hatched a plan to ‘pool’ the foregoing mortgages and sell the pools for inflated value.\u00a0 Rapidly, these two intertwined schemes grew into a brazen plan to disregard underwriting standards and fraudulently inflate property values.\u2019\u201d<\/p>\n
Unfortunately, those allegations describe the general problems that swept through the mortgage industry.\u00a0 \u201cThis writ petition relates solely to plaintiffs’ cause of action for fraudulent concealment.\u201d<\/p>\n
The trial judge noted the scope of the issue presented to it.\u00a0 On January 11, 2011, the matter came on for hearing.\u00a0 At the outset, the trial court indicated, \u201cthe issues presented by the many plaintiffs in this case as against their current mortgage lender and\/or loan servicer are part of a larger socioeconomic problem that confronts our society in California and all of the other states in this union, an issue of great concern to the U.S. Congress, state Legislature, and the bank regulators, given that in our banking system the banks are insured by the full faith and credit of the United States government for all intents and purposes, so the continued solvency of the banking industry as a whole is a matter of intense interest to the U.S. Congress as well as the central bank.”<\/p>\n
That\u2019s the real problem.\u00a0 This is not a matter that should be dumped into a trail court.\u00a0 Our entire justice system has shrugged its shoulders and refused to impose liability on anyone for the manipulations that developed into the mortgage crisis.\u00a0 Shame on us.<\/p>\n
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