A federal judge has ordered the release of the records of borrowers in a class action lawsuit against failed IndyMac Federal Savings Bank. U.S. District Judge Alicemarie H. Stoller ruled last month that officials with the Federal Deposit Insurance Corp., which now operates the bank, must turn over paperwork identifying possible Plaintiffs in the suit claiming IndyMac misrepresented terms for adjustable rate mortgages. Judge Stoller also issued a temporary restraining order blocking the FDIC from enforcing a deadline for possible Plaintiffs to file legal claims against the bank.
Lawyers for the Plaintiffs argued the deadline did not give them time to identify Plaintiffs in the case alleging the bank enticed borrowers to take on loans they could not afford by offering them artificially low “teaser” rates at the start of repayment schedules. The claim could cover tens of thousands of IndyMac borrowers who want to be repaid any interest in excess of the terms they thought they were receiving, as well as losses due to negative amortization. Claimants are also seeking punitive damages in the case.
Source: Associated Press
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