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Federal Appeals Court in Atlanta Rules Mortgage Loan Lawsuit Class-Action.
Byline: Russell Grantham
Jun. 30--In a decision that could add to more than 160 similar lawsuits nationwide, the federal appeals court in Atlanta has granted class-action status to a lawsuit alleging a lender paid illegal kickbacks to mortgage brokers.
The decision directly affects thousands of borrowers who got loans backed by the Federal Housing Administration between 1995 and 1999 from Irwin Mortgage, whose Southeastern regional office is in Atlanta.
But the decision is also likely to propel a new wave of legal challenges to so-called "yield spread premiums," says the alarmed mortgage industry. The fees are paid to mortgage brokers in about a fourth of all home mortgage transactions.
About 160 lawsuits challenging the practice have been filed against lenders since 1993, said Phyllis Slesinger, general counsel for the Mortgage Bankers Association of America.
Now that a three-judge panel of the 11th Circuit Court of Appeals in Atlanta affirmed …
