Complaint Review: Fairbanks Capital Corp

THE MOUNTAIN STATE DELIVERS A POWERFUL MESSAGE (January 10, 2003)

A State Court in West Virginia has agreed with the Plaintiff in the matter of Overbaugh, et al V. Fairbanks Capital Corporation, according Bren Pompono of the law firm Mountain State Justice. The Court issued a Temporary Restraining Order (TRO) on Tuesday against all foreclosure actions where Fairbanks Capital is the loan servicer of record.

The TRO also stays all pending foreclosures and prevents new foreclosures from being filed. The suit alleges, among other things, that Fairbanks Capital charges excessive and unearned legal fees in connection with its foreclosure actions. This decision is an important victory, especially being West Virginia is a non-judicial foreclosure state. A hearing is scheduled for January 30, 2003.

Naturally this TRO will unlikely become permanent, however it is possible that the TRO will stand well beyond January 30th. This decision sends a powerful message to the other 49 states, both judicial and non-judicial. We hope that more states will soon take similar actions.

We believe this case should be of interest to investors and rating agencies. The complaint, as well as the Order, posted by Monday

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Neal
San Francisco, California
U.S.A.