3rd Circ. Tosses SunTrust, Countrywide Ponzi Suit

Law360, New York (May 27, 2010, 2:35 PM EDT) -- A federal appeals court has shut down a putative class action alleging SunTrust Mortgage Inc. and Countrywide Home Loans Inc. played a bit part in facilitating a mortgage loan-servicing Ponzi scheme that affected hundreds of mortgages.

A three-judge panel in the U.S. Court of Appeals for the Third Circuit on Monday upheld the district court’s dismissal of Douglas Jones’ complaint against the lenders for declaratory judgment, negligence and violation of the Real Estate Settlement Procedures Act.

The central question was whether the perpetrator of the Ponzi...
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