WASHINGTON--(BUSINESS WIRE)--Andrew Grosso & Associates, a District of Columbia law firm, announced today the settlement and dismissal of consolidated lawsuits against the developers of the King’s Crossing II condominiums, located in southeast Washington, D.C.; Countrywide Home Loans, Inc.; and Express Title, a company located in Bethesda, Maryland. The lawsuits accused Countrywide Home Loans together with other defendants of violations of the D.C. Consumer Procedures Protections Act and additional violations of law in the development, marketing, and sales of substandard and defective condominiums to predominantly low income, minority, first-time home buyers, and in the lending and closing practices that enabled these buyers to purchase such condominiums.
The King’s Crossing II condominium complex is a 43-unit development built in 1960 and renovated in 2000 and 2001. It is comprised of three connected buildings located at 3070, 3072, and 3074 30th Street, SE in Washington, D.C. The initial lawsuit was filed in the Superior Court for the District of Columbia in 2004 by more than thirty buyers of units in the development. Today the cases were dismissed after settlements had been reached between the Plaintiffs and Countrywide, Express Title, and the developers: Eric Fedewa, Regents Crossing, LLC, and Ascend Communities, LLC. The terms of the settlement agreements remain confidential.
In motion practice before the Court, the Plaintiffs introduced evidence of the following in support of their case:
- Among buyers who obtained their mortgages from Countrywide and whose loans were insured by the FHA, the signatures of the Countrywide-employed underwriter supposedly approving such FHA insurance had been forged
- Downpayment assistance forms or “Gift Fund Verification Letters” in Countrywide's files appeared signed by ACORN officials but were otherwise substantially blank
- A former director of ACORN's Washington, D.C. office testified in her deposition that she signed Gift Funds Verifications in blank, having done so at the request of an employee of the developer
- Signatures of another former ACORN director, who denied signing such forms, appeared in Gift Fund Verifications, apparently having been photocopied repeatedly among form to form
- “Gift funds,” supposedly paid by ACORN as downpayment assistance to Plaintiffs to purchase their units and to obtain their loans, were not paid but were nonetheless recorded on settlement documents as having been paid; when such loans were insured by the FHA and private insurance carriers, and sold to FannieMae and private mortgage investors, calculations of the equity in these loans and their loan to value ratios were done as if the gifts funds had actually been paid
- Countrywide’s expert witness testified in her deposition that some loans made by Countrywide to various Plaintiffs were “unacceptable”
- The roofs of the condominiums were in substandard and dangerous condition, and in need of extensive repairs that the buyers could not afford
- The living conditions of the condominium units were substandard, and included flooding in the basement units and mold growing in carpets, convectors, and hallways
- An essential element of the air conditioning systems had zero useful life remaining at the time the development's units were put up for sale
- Several Plaintiffs asserted that documents from Countrywide’s loan files bearing their purported signatures had in fact not been signed by those Plaintiffs
The lead case is Fitzhugh v. Countrywide Home Loans, Inc., Civil Action No. 2004-6830 B, consolidated with Kings Crossing II Owners Group, Inc., v. Regent Crossing, LLC, CA No. 2004-4264 B; and Fitzhugh v. Countrywide Financial Corp., CA No. 2004-004919 B. Since the filing of these cases, Countrywide was purchased by Bank of America. Defendants named in the complaints and dismissed from the case as part of the settlements included James and Mitzie Preuss, former loan officers for Countrywide Home Loans; Charles Tobias, president and owner of Express Title; and Roger Black and Doretha Austin, former employees of the developer.
The initial lawsuit was filed on May 29, 2004 by the law firm of Andrew Grosso & Associates. Lead counsel in the consolidated cases was Joseph B. Espo, Esq., of the Baltimore, Maryland law firm Brown, Goldstein and Levy, LLP.