A proposed class action representing heirs of reverse mortgage borrowers was dismissed by a California judge on Friday without leaving the plaintiff an opportunity to appeal.
The suit, brought by AARP on behalf of plaintiff Robert Chandler against Fannie Mae and Wells Fargo in 2011, was the second reverse mortgage lawsuit brought by AARP in 2011 following a suit brought against the Department of Housing and Urban Development that is being decided in a court of appeals.
U.S. District Judge Samuel Conti dismissed the proposed class action suit last week, stating the plaintiff’s home title did not back his claims.
Chandler, of Elk Grove, Calif., inherited the home of his mother, who had a reverse mortgage and passed away in 2010. The suit alleges that Chandler was never given notice of his right to purchase the property for its current value.
According to the allegations and AARP, Wells Fargo told him that he would have to pay off the full mortgage balance, then acting on Fannie Mae, the owner of the mortgage, proceeded to foreclose on the home. Finding no one willing to buy it for the same market price that Mr. Chandler was Fannie Mae began efforts to evict him from the property.
The suit was brought in 2011, around the time of the lawsuit brought against HUD, alleging Wells Fargo and Fannie Mae foreclosed illegally on the home following the death of Chandler’s mother, who was named on the reverse mortgage and was the only borrower named on the home title. The claims allege the bank and Fannie Mae wrongfully interpreted the Home Equity Conversion Mortgage statute when they foreclosed on Chandler’s home without offering the opportunity for Robert Chandler to purchase the home at 95% of its appraised value.
In dismissing the suit with prejudice, the judge deemed any additional efforts would be futile by eliminating the plaintiff’s chance to appeal the decision.
Written by Elizabeth EckerPrint Article