By: Danny Jacobs (Legal Affairs Writer). Published June 29, 2014 – The Daily Record

A state appellate court has revived a mortgage-fraud lawsuit brought against one of Maryland’s largest real estate groups.

A unanimous Court of Special Appeals panel found “genuine disputes of material fact” as to when the plaintiffs knew of the fraud allegedly committed by The Creig Northrop Team P.C., making it a question that should go to a jury.

“It puts us back on track to go to trial in a case that has shocking evidence to support the mortgage fraud allegations,” said Gregory T. Lawrence of Conti Fenn & Lawrence LLC in Baltimore, a lawyer for the plaintiffs.

Timothy G. Casey, a Rockville solo practitioner and a lawyer for The Northrop Team, did not respond to a request for comment.

While the court reversed Howard County Circuit Judge Richard S. Bernhardt’s ruling dismissing the claim, it agreed with his decision that the case could not proceed as a class action.

The plaintiffs, three married couples, purchased new houses between 2006 and 2007 with the help of The Northrop Team, which has five offices across central Maryland and is part of Long & Foster Real Estate. The plaintiffs allege they were advised of a loan program allowing them to buy their new homes using equity pulled from their current homes, a transaction not contingent upon selling their current home. But the loan did not exist and “would have violated significant underwriting policies” if it had, according the plaintiffs’ appellant brief.

In order to proceed with the loan program, the plaintiffs allege The Northrop Team “secretly forged documents and manipulated home listings,” according to the appellate brief.

Among other tactics, The Northrop Team allegedly forged their clients’ signatures on fake leases of their existing homes, with made-up tenants, in order to make it look like the plaintiffs had enough income to qualify for the new home’s mortgage, according to the brief.

According to the appellate brief, an expert for the plaintiffs determined that four lease signatures were “cut-and-paste forgeries,” while another misspelled one of the plaintiffs’ names.

The couples also claim that “buried within hundreds of pages” of documents they were initialing and signing were blank forms with a field for the imaginary rental income, according to the appellate brief.

“It would take a person approximately 26 hours in total to read every word on every page of a single set of documents provided to one of the applicants,” the brief states.

In their appellate brief, lawyers for The Northrop Team quoted Bernhardt’s opinion throwing out the case because, he ruled, “they were fully aware” they were applying for home equity lines of credit. Bernhardt also ruled that since the plaintiffs “signed, dated, reviewed and even corrected” the forms they signed, they were on notice of the alleged fraud in 2006 and 2007.

Lawyers for the plaintiffs, who filed their suit in December 2011, countered their clients were first put on notice between 2010 and 2011, when the alleged fraud was revealed in a separate case against The Northrop Team.

Lawrence also represents separate plaintiffs in a federal class-action lawsuit alleging The Northrop Team was part of a kickback scheme involving a Columbia title company, a finding made during discovery in the state court case. The federal lawsuit has been stayed while a judge considers allowing an amended complaint to include as a defendant Long & Foster, which had previously been dismissed from the case.

G. Russell Donaldson, a Crofton lawyer also representing the plaintiffs in the federal case, has said the class size in that action would be between 1,500 and 2,000 plaintiffs. 

WHAT THE COURT HELD

Case:

Frank Larocca, et al., v. The Creig Northrop Team P.C., et al., CSA No. 0766, Sept. Term 2013. Reported. Opinion by Hotten, J. Argued April 10, 2014. Filed June 25, 2014.

Issue:

Did the circuit err in granting defendants’ motion for summary judgment because the plaintiffs’ claims were barred by the statute of limitations?

Holding:

Yes; there were genuine disputes of material fact as to when the plaintiffs were aware of alleged fraud.

– See more at: http://thedailyrecord.com/2014/06/29/csa-revives-couples-mortgage-fraud-claims/