Saturday, February 13, 2010

Mortgage Company Liable for Aiding and Abetting Real Estate Broker Fraud

70-year-old Arizona resident, Mona Dobben stands up and takes down a 20-billion-dollar Mortgage Company by winning a $100,000.00 judgment which includes punitive damages

Delaware (PRWEB) February 13, 2010 -- 70-year-old Arizona resident Mona Dobben stands up and takes down a 20-billion-dollar Mortgage Company by winning a $100,000.00 judgment which includes punitive damages. American Home Mortgage (AHM) was found liable for aiding and abetting a fraud perpetrated on Dobben by an unlicensed real estate broker (In Re: American Home Mortgage Holdings, et al.; United States Bankruptcy Court District of Delaware; Case No: 07-11047 (CSS)).

Dobben is represented by Orange County attorney Douglas J. Pettibone who alleges Dobben is victim of loan fraud by an unlicensed real estate broker and convicted felon Patrick Downey. According to Pettibone, Downey stole Dobben's identity, forged Dobben's signature and submitted false loan documents to AHM without Dobben's knowledge.

Trial Judge Christopher Sontchi said, "It shocks the conscious of the court what went on here".

After Dobben received foreclosure notices from AHM she discovered the fraud and contacted AHM for help who turned a deaf ear and never responded.

AHM then filed Bankruptcy. In the bankruptcy court Dobben claimed AHM aided and abetted the fraud perpetrated upon her by Downey and that her claim against AHM should not be discharged in the AHM bankruptcy.

Pettibone said, "This is a case about standing up for what is right and holding corporate America accountable no matter how big they are or how many attorneys they have".

Pettibone argued there were a number of red flags that should have given rise to AHM doing something other than blindly accepting forged loan documents by this broker who Pettibone said AHM should not have been dealing with in the first place. "AHM never responded to Dobben's pleas for help," according to Pettibone, "Instead they foreclosed on the property and ruined Dobben's credit".

Judge Sontchi found AHM had given Dobben the run around when she was alerting AHM to the fraud and attempting to get AHM to stop foreclosure on the property.

AHM claimed, in part, they were not liable because prior to filing bankruptcy AHM had transferred its interests and servicing rights to Dobben's loan to another entity.

"A shell game," Pettibone said. Judge Sonchi agreed, "I really find [AHM's] argument just too clever by half. They wanted to separate out these different pieces and legal entities and assume Ms. Dobben can figure it out."

In the end Judge Sontchi awarded actual damages of $32,000.00. However given Dobben's deteriorating credit score and the clear emotional distress displayed in the courtroom, the court granted her treble damages. The total award was a judgment in the amount of $100,000.00.
Following the trial AHM immediately appealed the judgment. The appeal is currently pending.

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[Via Legal / Law]

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