OHIO STATE COURT CANCELS FORECLOSURE SALE AND STAYS FORECLOSURE CASE FILED BY TRUSTEE FOR BEAR STEARNS ASSET-BACKED SECURITIES ON FILING OF FEDERAL ACTION AGAINST BEAR STEARNS AND ITS BROKERS AND OTHERS FOR VIOLATIONS OF FEDERAL TRUTH-IN-LENDING ACT, FEDERAL REAL ESTATE SETTLEMENT PROCEDURES ACT, CONSUMER PROTECTION STATUTE, CIVIL RICO, FRAUD, AND OTHER RELIEF

In another historic victory for borrower victims of predatory loan practices, the Court of Common Pleas of Mahoning County, Ohio has entered an Order today canceling a foreclosure sale set for June 24, 2008 and staying same pending the outcome of the borrower’s Federal lawsuit which has been filed against Bear Stearns Residential Mortgage Corporation, Encore Credit Corporation, Option One Mortgage Corporation, Motion Financial, and broker Ellyn Klein Grober (of Motion Financial) sounding in claims for violations of the Federal Home Ownership Equity Protection Act, the Federal Real Estate Settlement Procedures Act, the Federal Truth-In-Lending Act, the Federal Fair Credit Reporting Act, the Ohio Consumer Practices Act, and the Ohio Mortgage Broker’s Act; Fraudulent Misrepresentation; Breach of Fiduciary Duty; Unjust Enrichment; Civil Conspiracy to defraud; and Civil RICO. The case was filed in the United States District Court for the Northern District of Ohio, Eastern Division.

The ruling comes on the heels of the June 19, 2008 press release, from the Federal Bureau of Investigation’s National Press Office, as to the more than 400 Defendants charged for their roles in mortgage fraud schemes, including 60 arrests in 15 districts. Charges were brought in every region of the United States and in more than 50 judicial districts by U.S. Attorneys’ Offices. The indictments included two Senior Managers of Bear Stearns who were indicted in a mortgage-related securities fraud case.

The Ohio state court ruling paves the way for borrowers seeking relief from foreclosure by parties who have, in many instances, falsely represented to the Courts that they have the proper capacity to institute a foreclosure action when quite the opposite is true. Recent judicial decisions in California and other states have stated very clearly that the question of legal standing to institute a foreclosure is paramount, and absent satisfactory proof of this threshold element, foreclosure may not proceed. The Federal case filed in Ohio in connection with the ruling of the Judge in Mahoning County seeks various additional forms of relief, including money damages, refund of all monies paid by the borrower, rescission, punitive damages, costs, and attorneys’ fees against the Defendants Bear Stearns, Encore Credit, Option One, and Motion Financial.

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