THE ROTHBLOOM LAW FIRM IN THE SPOTLIGHT
With its lax consumer protection laws, Georgia is amongst the most fertile ground in the nation for mortgage lending abuses. In 1992, I began representing people struggling against lending practices designed to strip the equity out of their homes. Until that time, few in Georgia had spoken the term "predatory lending".
Today, we are in the midst of the Great Recession, a global economic crisis that has its beginnings in lending abuses in the subprime sector of the consumer mortgage lending industry; practices rooted in self-interest, greed and injustice toward particularly vulnerable people. The stories that follow feature clients that I have represented and matters that I have dealt with since 1992. All but one of the clients have concluded their cases; of those who have concluded their cases, each was successful. The stories show the origin and the evolution of subprime mortgage lending abuses from the consumer's perspective. They show the Georgia battles in the war to combat these practices. Individual and class action lawsuits, local legislation and media coverage were victories in a process that informed and educated those who had the power to stop the abuses. No one, however, who had the power to stop them on a systemic basis had the courage to bring them to an end; not the banks, not the regulators, not the courts, not the legislators. The practices continued to their natural conclusion... the loss of vast fortunes by those who invested in them, bank failures, and, ultimately, global economic disaster. Though perhaps no one intended the consequences of these abuses, most everyone who had the power to prevent them intended the practices that lead to these consequences.
-- Howard Rothbloom
Boston Globe, October 5, 1992: "4 Class-action Suits Hit Fleet's Georgia Unit" - Fleet/Norstar, the largest financial institution in New England, is facing four class action lawsuits claiming that its lucrative Georgia mortgage subsidiary conspired to deprive borrowers of their homes and commit them to usurious loans. One of the cases, filed by Howard Rothboom as co-counsel, asserts that the combination of usurious loans and harassing collection practices puts Fleet in violation of federal and state loan-sharking laws.
Boston Globe, October 9, 1992: "Bankers Under the Gun" - Dogged by four class-action suits in Georgia, Fleet officials took the stage beside Atlanta Mayor Maynard Jackson to make a $38 million voluntary restitution to borrowers of the company's Georgia-based finance subsidiary, Fleet Finance, Inc. Howard Rothbloom, representing plaintiffs in a loan-sharking case against Fleet, said yesterday's voluntary restitution is "simply a way to distract everyone from the problems they're having."
WSB-TV Channel 2 Action News, Atlanta, October 10, 1992: Video - The Rothbloom Law Firm client 75 year-old Robert Burgess of Decatur tells Channel 2's Lynn Harasin that he filed bankruptcy to stop Fleet Finance from foreclosing on his home. Mr. Burgess borrowed $13,000 at 26.39 % APR to renovate a church. After repaying $41,000, he still owes $17,000 that he pays by picking up aluminum cans.
The Atlanta Journal and The Atlanta Constitution, October 11, 1992: "The Loan Trap" - Report on victims of a predatory lending industry that has been growing in Georgia since the state Legislature took the cap off interest rates in 1983. Those hurt the most are mostly poor, elderly and black. They frequently end up homeless after high interest and finance charges bleed them of all assets and they can no longer keep up with monthly payments. Most of these loans initially are made by small unregulated mortgage companies that search out homeowners with more equity than knowledge of finance. But the loans and the paper trail they've left in Georgia most commonly lead back to the largest financial institution in New England - Fleet Financial Group.
WSB-TV Channel 2 Action News, Atlanta, October 1992: Video - Action News reporter Carol Sbarge tells of an investigation by the Georgia Governor's Office of Consumer Affairs into charges that Fleet Finance steels equity out of its consumers' homes. Fleet says that its decision to give $8 million to low income neighborhoods near planned Olympic venues has nothing to do with the investigation th and denies that it is giving the money as a means of damage control.
WXIA-TV 11-Alive, Atlanta, November 1992: Video - 11-Alive reporter Marie Ryan presents The Rothbloom Law Firm clients victimized by Fleet Finance as they gather at Victory House, a southeast Atlanta church, to watch a CBS News 60 Minutes broadcast entitled "A Matter of Interest" in which they tell their stories.
WAGA-TV Channel 5 Eyewitness News, Atlanta, November 1992: Video - Eyewitness News reporter explains that Fleet Finance interest rates are way above the going rate because the borrowers are considered high risk, unable to get loans from traditional banks; poor people who have lots of equity built up in their houses, but not enough knowledge of complex financial matters. The Rothbloom Law Firm client Pastor Craig Soaries explains the seriousness of the issue and its national importance. Fleet Finance claims that the 60 Minutes piece is not an accurate representation of the company's business practices, that the company only forecloses as a last resort and that the company lost $5.4 million on in Georgia in 1991.
WSB-TV Channel 2 Action News, Atlanta, December 1992: Video - Action News consumer investigative reporter Patrick Crosby plays a secretly recorded collection call from Mr. Davis with Fleet Finance to The Rothbloom Law Firm clients Lewis and Annie Shields. Georgia Attorney General Michael Bowers has appointed former DeKalb County District Attorney Bob Wilson as special assistant to conduct a state civil investigation of lending abuses in Georgia by the company.
WSB-TV Channel 2 Action News, Atlanta, December 14, 1992: Video - Action News consumer investigative reporter Patrick Crosby reports on a class action lawsuit filed in the Superior Court of Cobb County by Howard Rothbloom, Roy Barnes, Jeffrey Cassurella and Jeffrey Sakas against Fleet Finance based upon a pattern of racketeering,
Boston Globe, December 15, 1992: "Fleet to Meet Today with Borrowers" - A meeting organized by U. S. Congressman of Massachusetts Rep. Joseph P. Kennedy 2d is scheduled for today of representatives of Fleet Financial Group, Inc., the Georgia attorney general, borrowers suing Fleet and community activists as a "fact-finding effort by Congressman Kennedy to gain a better understanding of Fleet, the lawyers and the community groups." The meeting included Kennedy; three Fleet officials -- president of fleet Bank of Massachusetts John Hamil, executive vice president James P. Murphy and general counsel William C. Mutterperl -- assistant Georgia attorney general Beverly Martin,; Georgia plaintiffs' attorneys John Long, Howard Rothbloom and William J. Brennan, Jr.; and Bruce Marks, a community activist and Fleet critic who is director of the Union Neighborhood Assistance Corp. in Boston, n/k/a Neighborhood Assistance Corporation of America (NACA).
WSB-Tv Channel 2 Action News, Atlanta, December 15, 1992: Video - A Cobb County Superior Court judge announced certification of a class action lawsuit by The Rothbloom Law Firm client Lillie Mae Starr against Fleet Finance. Ms. Starr sued the company alleging that unfair lending practices were used to force her into foreclosure.
WSB-TV Channel 2 Action News, Atlanta, December 15, 1992: Video - Action News consumer investigative reporter Patrick Crosby reports on reaction to a Cobb County Superior Court judge's announcement of certification of the class action lawsuit by The Rothbloom Law Firm client Lillie Mae Starr against Fleet Finance. The company said that they expect to prevail in the case.
Boston Globe, December 16, 1992: "Fleet Aid Package May Grow; Georgia Judge Approves a Third Lawsuit Accusing Bank Subsidiary of Racketeering" -
WXIA-TV 11- Alive, Atlanta, December 16, 1992: Video - 11-Alive reporter Marie Ryan reports that, as Fleet Finance looks down the barrel of the Lillie Mae Starr class action lawsuit, it has offered to lower interest rates and payments on borrowers' loans. "This is the story of the ultimate powerless people against the ultimate powerful industry" declares Howard Rothbloom.
Associated Press, December 21, 1992: "Bank Tangled in Loan Scandal that Victimized Homeowners" - Allegations of discriminatory lending begin to plague Fleet Finance, Inc. of Atlanta; Howard D. Rothbloom relates his clients' experiences.
The Charlotte Observer, January 10, 1993: "Complaints Arise Over Finance Firms; Chrysler First Faces Lawsuits" -
News at Ten Channel 46, Atlanta, 1993: Video - News at Ten reporter Lu Ann Sodano reports that the Georgia House Banking Committee heard testimony from The Rothbloom Law Firm clients victimized by Fleet Financed in support of a bill to cap interest rates on mortgage loans. The bill would cap interest rates at 11% above the prime rate. Committee members express problems with the bill.
WSB-TV Channel 2 Action News, Atlanta, April 27, 1993: Video - Action News consumer investigative reporter Patrick Crosby reports that a Cobb County Superior Court judge enjoins Georgia foreclosures by Fleet Finance homeowners who are behind on their mortgage payments. The order is unprecedented.
The Atlanta Journal and The Atlanta Constitution, April 28, 1993: "Cobb Judge Blocks Fleet's Resumption of Foreclosures" -
The Atlanta Journal and The Atlanta Constitution, June 15, 1993: "What's Ahead for Fleet" -
WSB-TV Channel 2 Action News, Atlanta,, December 15, 1993: Video - Action News consumer investigative reporter Patrick Crosby tells the story of The Rothbloom Law Firm clients Vivian and Greggory Johnson victimized by Fleet Finance in a 29.35% APR mortgage regarding a possible settlement by the Georgia Attorney General and the Georgia Office of Consumer Affairs with the company. The settlement would roll back interest rates on mortgages of more than 21% interest.
Boston Globe, December 16, 1993: "Fleet to pay $100m Loan Bias Settlement" -
WSB-TV Channel 2 Action News, Atlanta, 1993 - 1994: Video -
News at Ten Channel 46, Atlanta, January 1994: Video - News at Ten reporter John McNight reports that some 400 hundred homeowners and former homeowners, clients of The Rothbloom Law Firm, that were victimized by Fleet Finance rallied at the First Iconium Baptist Chuch in southeast Atlanta are carrying on their battle for what they feel is a fair deal. An investigation by the Georgia Attorney General found Fleet in violationof seven provisions of the Georgia Fair Business Practices Act. and offered some victimized homeowners $162.73 in return for a full release of liability. Howard Rothbloom said: "It is outrageous that a person uses a gun to take someone's car, they will go to prison. But if a lender uses a pen to take someone's house, but if a lender uses a pen to take someone's house, then all they have to pay is $162.00 in restitution. That is not really fair." The rally revived interest in the class action lawsuit believed to have been all but extinguished by the Georgia Attorney General's settlement.
Subprime Lending / Fleet Finance, January 1994: Video
Subprime Lending, 1993 - 1994: Video featuring The Rothbloom Law Firm client Essie Mae Hector.
The Atlanta Journal and The Atlanta Constitution, February 11, 1994: "Omission: Event for Insurance Commissioner May Have Violated Campaign Reporting Laws" -
The Atlanta Journal and The Atlanta Constitution, August 17, 1994: "Fleet Agrees to Settle Remaining Class-action Suit for $6 Million" -
Boston Globe, August 17, 1994: "Fleet Agrees to $5.95M for Loan Victims" -
The New York Times, December 13, 1997: "Lowering the Credit Fence; Big Players are Jumping Into the Risky Loan Business: -
CBS Evening News, 1998: "Loan Companies Exploit Elderly" - CBS News Eye On America correspondent Wyatt Andrews tells what happened to The Rothbloom Law Firm client 72-year-old Sanders Faust of Decatur, Georgia. Faust, who cannot read or write, faces foreclosure on his home because of the questionable lending practices of a loan company called the Associates.
The Atlanta Journal and The Atlanta Constitution, June 5, 1998: "Insurance Suit Class Action Status" -
The Atlanta Journal and The Atlanta Constitution, December 7, 1998: "Forgive Us Our Debts: Life on the Edge" -
The Atlanta Journal and The Atlanta Constitution, December 10, 1998: "Forgive Us Our Debts: Feds Probing Mortgage Lender" -
Columnist Jack Anderson, December 28, 1998: "Subprime Lenders Prey on Poor" - The late columnist Jack Anderson describes how The Rothbloom Law Firm client Beatrice Smith battled against the "runaway subprime lending market" to save her home from foreclosure by NationsCredit.
Reuters, 1998: A Bad Deal: Obscure Insurance Policy Squeezes Borrower - Some of America's biggest financial firms sell an obscure type of life insurance policy, called single premium credit life insurance, which can end up costing poor borrowers like The Rothbloom Law Firm client Winfred Wood their homes. Companies say they don't force borrowers to buy the policies and that the insurance is convenient and actually costs less per month when financed. Critics, however, have attacked the sale of this insurance, calling it "corrupt" because it jacks up the cost of a mortgage.
Clark Howard, WSB-TV Consumer Adviser, 1998: "Atlanta Under Siege by Predatory Lenders" - Consumer Adviser Clark Howard explains that Howard D. Rothbloom represents 2000 Georgians in a class action lawsuit. Fred Wood was victim #1. "His credit wasn't good enough to get a credit card at KMart, but they loaned him $36,000 secured by his house," says Rothbloom. "If this company did at the point of a gun what they do with the point of a pen, there would be a lot of people in prison." ..."If it wasn't for Howard, I'd be in the streets right now," says Fred.
The Atlanta Journal and The Atlanta Constitution, March 14, 1998: "Senate Hearing Set Monday on Lending to Poor" -
The Atlanta Journal and The Atlanta Constitution, October 2, 1999: "Cobb Man Puts House on Line in Suit Against Credit Insurer" -
Associated Press, October 3, 1999: "Atlanta Lawyer Says Long-term Credit Life Insurance a Ripoff'" - When Howard Rothbloom speaks Sunday to the National Association of Insurance Commissioners, he could give them an earful on sales of credit life insurance on a long-term basis.
The Atlanta Journal and The Atlanta Constitution, October 19, 1999: "Tennessee Company Ordered to Halt Sales of Insurance on Loans" -
The Atlanta Journal and The Atlanta Constitution, April 26, 2000: "HUD Secretary in Atlanta to Target 'Subprime' Lending" -
Creative Loafing, October 14, 2000: "Sharks Patrol These Waters" - Writer Mara Shalhoup tells the story of The Rothbloom Law Firm client Lillian Cason, a 78 year old homeowner struggling to keep her home after falling victim to abusive lending practices and in the face of Georgia's week consumer laws.
American Banker, January 12, 2001: "Citi Puts Out Second Associates Fire in Week" - Citigroup will refund roughly 2,000 borrowers in Georgia who were sold single-premium credit life insurance with a loan from an Associates subsidiary, said Howard D. Rothbloom, the plaintiffs’ lawyer.
The Atlanta Journal and The Atlanta Constitution, February 15, 2001: "Editorial : Foreclose on State's Predatory Lenders" -
The Atlanta Journal-Constitution, December 22, 2001: "3,500 Georgians to Share in Insurance Settlement" -
The Atlanta Journal-Constitution, December 18, 2002: "Lien Sale Means Lean Time" -
The Atlanta Journal-Constitution, January 27, 2003: "Lenders' Overstated Claims Shouldn't Doom New Law" -
The Atlanta Journal-Constitution, April 15, 2005: "Bankruptcy Law Rebuilt" -
The Atlanta Journal-Constitution, April 17, 2005: "Going for Broke Won't be so Easy" -
The Atlanta Journal-Constitution, April 21, 2005: "Lawyers Wary of Bankruptcy Rules" -
The Atlanta Journal-Constitution, October 15, 2005: "Bankruptcy Laws About to Get Tight" -
The New York Times, August 6, 2007: "Mortgage Maze May Increase Foreclosures" - Writer Gretchen Morgenson shows how The Rothbloom Law Firm client Mamie Ruth Palmer got trapped in a complex, chaotic and confusing system for consumers trying to rescue their homes from foreclosure.
1967: Israel, the War, and the Year that Transformed the Middle East, 2007: In this 704 page history of the 1967 Six Day War published in 2007, leading Israeli historian Tom Segev cited a letter from Howard Rothbloom to President Lyndon B. Johnson urging the president to stand by Israel.
The Atlanta Journal-Constitution, March 5, 2008: "3 Anti-foreclosure Bills Pass 1st of 2 Senate Panels" -
The Atlanta Journal-Constitution, March 14, 2008: "Shelter from the Storm" - In this AJC editorial, Howard D. Rothbloom is quoted in support of two Georgia State Senate bills which would help Georgia homeowners facing foreclosure. One requires a public record naming the owner of a home loan. The other extends the foreclosure notice requirement for troubled homeowners from 15 to as much as 60 days. The bills became law.
The New York Times, March 30, 2008: "Foreclosure Machine Thrives on Woes" - Writer Gretchen Morgenson explains that The United States Trustee Program, a unit of the Justice Department, has brought a case against a national mortgage lender that it says is abusing the bankruptcy system in the case of John and Robin Atchley, The Rothbloom Law Firm clients. The Atchley's case drove the United States Senate to investigate mortgage lender misconduct in bankruptcy cases.
The Atlanta Journal-Constitution, March 30, 2008: "Couple Lose Home in Countrywide Dispute, But May Yet Win" - Writer Carrie Teegardin tells the story of The Rothbloom Law Firm clients John and Robin Atchley as a court action by The United States Trustee Program, a unit of the Justice Department, raises the curtain on a bankruptcy system that has tolerated too many injustices for families who are working hard to hold onto their homes.
The New York Times, July 27, 2008: "How One Borrower Beat the Foreclosure Machine" - Writer Gretchen Morgenson follows up on the story of The Rothbloom Law Firm client Mamie Ruth Palmer and explains how, "after enduring six years in foreclosure hell, almost losing her home twice, Ms. Palmer has escaped intact".
Creative Loafing, December 10, 2008: "A Five Year Battle to Fight Foreclosure" - Writer Mara Shalhoup tells the story of The Rothbloom Law Firm clients who claim that lenders are tacking on unsubstantiated, possibly illegal fees that total thousands of dollars, making it difficult for borrowers to keep their house even after they pay off the past due amount.
The Atlanta Journal-Constitution, January 25, 2009: "Mortgage Crisis: Who Owns My House" - Writer Carrie Teegardin tells the story of how The Rothbloom Law Firm client Zella Mae Green is fighting back in bankruptcy court to stop a foreclosing lender and to make it to prove that it actually owns her loan.
WXIA Television, 11 Alive Atlanta, March 4, 2009: "Stop Foreclosures With Three Simple Words?" - Reporter Keith Whitney interviews Howard D. Rothbloom regarding homeowners' demands that foreclosing lenders produce the note to prove their claims in litigation.
Creative Loafing, April 22, 2009: "What Makes These Atlantans So Damn Happy?" - Writer Mara Shalhoup tells of the happy ending for The Rothbloom Law Firm clients who fought A Five Year Battle to Fight Foreclosure.
The Atlanta Journal-Constitution, January 1, 2010: "Georgia Personal Bankruptcies Rate Third-Highest" - Writer Carrie Teegardin explains that one in 50 Georgia households declared bankruptcy in 2009 between January and November, leaving the state with the third-highest personal bankruptcy rate in the nation.
The Atlanta Journal-Constitution, June 7, 2010: "Cherokee Couple's Mortgage Case Leads to FTC Settlement" -
Broke USA, June 7, 2010: "From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business" -
The New York Times, June 7, 2010: "Countrywide Settles Fee Complaint" -
The Washington Post, June 10, 2010: "FTC Wins Countrywide Settlement, But Settles a Little Early" -