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Pennsylvania Judge Rules To Keep Scammed Mortgage Holders in Their Homes

Oct. 11, 2007 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee.

Berks County, Pennsylvania Judge Jeffrey K. Sprecher ruled Oct. 10, to protect 800 homeowners who are threatened with losing their homes, through the scamming actions of a local mortgage broker. Sprecher issued a temporary restraining order that prohibits all foreclosures, freezes further foreclosure proceedings, or the reporting of negative data to collections agencies, and sets up a temporary escrow account into which the homeowners will pay their current mortgage payments.

The ruling was made in response to a class action suit filed Sept. 25 against the major financiers, who had reaped the benefits of the scam by the now-bankrupt mortgage company Personal Financial Management (OPFM). When OPFM went bankrupt, it told its customers that it had brokered their mortgages to other lenders, and at significantly higher rates—thereby leading to huge increases in the mortgage payments for the homeowners. The suit seeks to invalidate these larger mortgages, which were taken out without the customers' approval.

Prior to the ruling, many of the homeowners were facing foreclosure, as their monthly payments had been hiked by 30 to 50 percent.

Sprecher will determine whether to make the temporary injunction permanent at a hearing on Dec. 4.

The mortgage scam in Berks and Lancaster Counties has created a huge furor throughout Pennsylvania, helping create the political climate in which Lyndon LaRouche's Homeowners and Bank Protection Act has been introduced, in memorial form, into the State Legislature. Introduced by Rep. Harold James (D-Phildadelphia), H.R. 418 now has more than 40 sponsors. It demands that the Congress take emergency action to freeze foreclosures, and create a firewall to protect the banking system from threatened collapse.