CA Court Site Info on Foreclosure

Tuesday, July 29, 2014

40% of CA Appellate Judges own Significant Stock in at Least One Financial Company

Are Foreclosure Cases Rigged?

Many judges do not disclose financial ties to banks

The East Bay Express reported on May 13, 2014, that Justice Elizabeth Grimes, Second Appellate District Court of Appeal (Los Angeles), has voted in favor of Bank of America against homeowners in foreclosures cases even though she owns between $100,000 and $1 million worth of stock in Bank of America, according to public records maintained by the state Fair Political Practices Commission.

The Cal. Code of Judicial Ethics Canon 3E(3)(b) requires that judges disqualify themselves from any case in which they own stock or bonds issued by a party with a fair market value exceeding $1,500 — if the outcome of the proceeding could substantially affect the value of the judge’s bond. Grimes also owns between $100,000 and $1 million of stock in Wells Fargo and US Bank, and between $10,000 and $100,000 in Citibank, giving her potentially a multimillion-dollar stake in the profitability of the mortgage lending industry.

In 2012, the Second Appellate District (Ventura) ruled in favor of Bank of America in a wrongful foreclosure case brought by Daniel and Yvette Shuster. One of the justices in that the case, Presiding Justice Arthur Gilbert, held stock in four different financial companies that originate or service home mortgage loans, including shares worth as much as $10,000 in Bank of America and shares between $10,000 and $100,000 in JPMorgan Chase.

Gilbert ruled in favor of Chase in a foreclosure case filed by Susan Lange that was argued in December 2012, and wrote anunpublished opinion in favor of Chase in another foreclosure matter decided in April 2011.

Forty-two of California's 105 appellate court justices (40%) own significant amounts of stock in at least one financial company. Attorney Patricia Rodriguez said the fact that so many judges have significant financial investments in the banking and mortgage industry means that they're inclined to rule against homeowners because a string of decisions against the banks could reduce the profitability of the entire sector. "They don't want to be the judge that allows forty million mortgages to go back to the borrowers," Rodriguez continued.

"They don't want to possibly set a precedent." A series of cases decided in favor of homeowners against the banks could establish a precedent that would make it easier for borrowers to win lawsuits against their banks. Banks losing more often in court could have sweeping impacts on their profitability in California. (East Bay Express).

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