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Strategies & Market Trends : Turnarund Investing
NOVS 0.0666-16.0%Aug 1 5:00 PM EST
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From: bankbuyer4/24/2012 11:55:41 PM
1 Recommendation  Read Replies (1) of 1876
 
Here are 2 lost lawsuits for Novs and the SEC filings document MANY others pending

"In any case, by 2006, the wheels had started to come off the NovaStar cart. The company’s net income that year was less than half what it earned in 2005. The company faced a number of lawsuits, including a class action filed in Washington State in December 2005 alleging that NovaStar failed to disclose to borrowers the fees earned by brokers. Plaintiffs contended that NovaStar had violated consumer protection laws. In 2007, NovaStar agreed to pay $5.1 million to resolve the claims of about 1,600 Washington borrowers."

The Jordans sued NovaStar in 2007. As part of the lawsuit, their lawyer found that their loan had been placed in a mortgage securitization trust assembled by NovaStar and sold to investors in November 2004. More than half of the loans in the pool were provided with no documentation or limited documentation of borrowers’ financial standing.

But the Jordans had given NovaStar bank statements and other documentation of their income. The lawsuit would show that NovaStar had inflated their monthly income by $500 to make the loan work. The lender had given the Jordans a loan that went against its own underwriting guidelines and that overrode federal lending standards.

The Jordans’ was just one loan. There were literally thousands more like it. (NovaStar settled with the Jordans in 2010. The terms were undisclosed.)

Novs also lost a large lawsuit for attempting to renege on an office space lease.
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