Class Claims U.S. Bank Chilled Home Auctions

HONOLULU (CN) – U.S. Bank manipulated the market to suppress public participation, drive down the price of foreclosed real property at auction and defraud Hawaii homeowners, a class action claims in state court.
The 30-page lawsuit is a virtual “how to” manual on unfair foreclosure sales.
Lead plaintiff Nancy L. Manchester claims the defendants “chilled competitive bidding” by changing the location of advertised auctions without publishing a new notice;
changed auction dates with such frequency that most sale dates advertised were not the actual auction dates;
changed sale dates unilaterally and without publishing notices of the rescheduled actions’ new dates and times;
advertised the auctions of properties by quitclaim deed when in fact all buyers other than defendants received limited warranty deeds;
included as a term of sale an unreasonable expectation that bidders were to close their sales within 30 days of their auctions;
and implied that a foreclosing mortgagee could render a sale illusory on a whim.
These practices, according to the complaint in the First Circuit Court, reduced the competition between U.S. Bank and bidders at nonjudicial auction, “allowing defendant U.S. Bank to purchase foreclosure properties cheaply on credit bid, with no or minimal competition from prospective third-party bidders, for later resale at higher prices,” in violation of state law that says a mortgagee exercising a power of sale must act as the “attorney of agent” of the mortgagor.

Read on.

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