Home Page Settlements HomeBanc Corp.
Wilmington, DE: (Aug-21-07) A series of complaints were filed against HomeBanc Corp. after Georgia lawyers were forced to fund loans when HomeBanc's checks started to bounce. Georgia lawyers who were forced to cover HomeBanc's bounced checks were suing, or threatening to sue, the company for fraud and other wrongs, in an effort to put a lid on their own liability. State law mandates that lawyers are required to be at the tables where home sales are actually closed. Until recently, they were required by HomeBanc and other big lenders to take ordinary checks, rather than wire transfers. The sudden collapse of one of the largest lenders in Georgia surprised lawyers who thought it was safe from the meltdown that started in the subprime sector, which catered to people with bad credit. For years, HomeBanc used a system that did not permit lawyers to deposit the mortgage company's check until the day of the closing. Checks that had to be written at the closing, to pay off sellers, the seller's mortgage company, and the lawyers, were written out of the lawyers' escrow account. No one expected HomeBanc's checks to bounce. In a settlement reached, a bankruptcy judge has made it possible for HomeBanc Corp. to surrender more than $20 million worth of mortgages to Georgia lawyers who were forced to fund the loans. [FORBES: BOUNCED CHECKS]
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Published on Aug-23-07
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