Lawsuits have been brought against Deutsche Bank National Trust Co., Bank of America, U.S. Bank N.A., and Wells Fargo. In addition, a suit has also been filed against Routh Crabtree Olsen, a Washington firm with offices in Hawaii, for its alleged involvement.
The lawsuits allege that state residents received lower prices than they should have for their properties sold through non-judicial foreclosure auctions. The plaintiffs say that these institutions committed multiple violations of state non-judicial foreclosure laws and kept residents from getting the highest possible prices for their properties.
The amount of losses for the residents reaches in the millions of dollars, according to their attorneys.
The suits allege that the banks advertised and conducted non-judicial foreclosure auctions for quitclaim deeds, meaning the properties are sold “as is” and without a guaranteed clear title.
However, the banks then allegedly provided winning bidders with limited warranty deeds, which ensure fee-simple title and are thus more valuable.
One resident’s lawyers estimated that she and her husband would have received at least $50,000 more if the sale had been for a limited warranty deed, the Star-Advertiser reported.
Additionally, the suit against Routh Crabtree Olsen alleges that the firm did not publicly announced postponement of auctions, did not use licensed attorneys to conduct the auctions, and filed false affidavits about the transactions. The firm is also accused of delivering limited warranty deeds in violation of notices that sales would be for properties “as is.”
Honolulu attorney John Perkin told the Star-Advertiser he thinks Routh Crabtree Olsen’s practices are “outrageous.”
“They came here as robotroops for these big mainland lenders and proceeded this wholesale violation of our Hawaii statues,” Perkin said.
The suit seeks class action status for an estimated 700-800 residents who non-judicial foreclosures were assisted by the firm and the other co-defendants. The plaintiffs seek to represent close to 3,000 borrowers whose properties went through the same process.
The plaintiffs seek millions of dollars in damages across all the suits, which would be tripled under Hawaii’s unfair and deceptive practices law should the plaintiffs win.
Spokespeople for U.S. Bank and Wells Fargo denied involvement in the foreclosures. According to the Star-Advertiser, no other banks responded to requests for comment