plaintiff’s first set of interrogatories pl01_c11

8/4/2019 Plaintiffs First Set of Interrogatories PL01_C11

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Chapter 11 Suit for Damages From Mortgage Servicers

Practices

Michael P. Malakoff has been a member of Malakoff, Doyle & Finberg, P.C. (or its

predecessors) in Pittsburgh since 1971, where he specializes in class action litigation. A 1970graduate of the University of Pittsburgh Law School, he is a charter member and formerChairman of the Allegheny County Antitrust and Class Action Committee. Mr. Malakoff hasserved on the faculty and as a lecturer on class action programs sponsored by the American BarAssociation, American Trial Lawyers Association, Practicing Law Institute, Pennsylvania BarInstitute, New York Academy of Trial Lawyers, and the Allegheny County Bar Association. Heserves as a member of the Advisory Boards of the RICO Law Reporter and the Class Action LawReporter. He is also a NACA Charter Board Member and Chairman of the NACA IssuesCommittee.

Section 11.1 is an amended complaint against a mortgage originator and the purchasers ofits mortgages and successors to its mortgage originating and servicing business. The claimsasserted in the Amended Complaint are based on five alleged practices:

First, the homeowners allege that the mortgage originator and owners improperly chargedloan advances to the homeowners outstanding balances where the accounts were not actually inarrears. According to the homeowners, the mortgages assessed periodic bill charges that weretoo low to cover homeowners property taxes, insurance, water or sewage charges. They thenadded loan advances to homeowners outstanding balances to cover the shortfall, without notice.

Second, the homeowners allege that the mortgage holders improperly placed into escrowperiodic bill payments belonging to mortgagors whose mortgages required use of thecapitalization method for applying the periodic bill payments. According to the homeowners,

the homeowners were entitled to the capitalization method applying periodic bill payments,under which they receive the effect of lowering the interest which accrued annually on theunpaid balance.

Third, the homeowners allege that the mortgage holders improperly charged interest onloan advances from the first of each month for loan advances made later in the month.

Fourth, the homeowners allege that the mortgage holders improperly delayed paymentuntil March of 1996 on escrow interest that accrued during 1995 that they were entitled toreceive by year end 1995.

Fifth, the homeowners allege that the mortgage holders improperly sent annualstatements on or after April 8, 1987 that implied that a prior mortgage owner was the currentmortgage owner. The homeowners allege that the new mortgage owners acquisition ofmortgages was deceptively concealed from homeowners.

The practices were alleged to involve breach of contract, unfair and deceptive acts andpractices, tortious interference with contract, and breach of fiduciary duty.


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One of the very interesting opinions issued by the court in the case on which thepleadings in this chapter are based was an opinion denying defendants motion to dismiss andsustaining the homeowners claims that a document under seal was subject to a 20 year statute oflimitations in Pennsylvania. This case, although it only included 144 homeowners, was thesubject of very, very extensive litigation.

Section 11.2 is the homeowners interrogatories to the mortgage servicer about itspractices and employees involved and section 11.3 are interrogatories designed to obtaininformation needed for certification of the class action. Sections 11.4 and 11.5 are motions toproduce documents directed to the mortgage servicer and the mortgage owner.

Section 11.6 is the homeowners memorandum of law opposing the motion to dismissfiled by the mortgage servicer. The memorandum argues that the complaint states a claim, thatthe claims were not released in a prior class action against the servicer, and that the claims arenot time barred because they were subject to state 20 year limitation period for documents underseal. The motion to dismiss was denied.

1

Section 11.7 is the homeowners memorandum of law opposing the motion to dismissfiled by the transferee of the ownership of the mortgage. The memorandum argues that thetransferee was not a government instrumentality entitled to governmental immunity, had engagedin unfair and deceptive acts and practices violating state law, and had violated its obligations as atrustee under the mortgage. This motion to dismiss was granted

2.

Finally, the parties joint settlement motion (11.8) with attached settlement agreement(11.9), class notice (11.10), and proposed order (11.11) are included in the materials. Theproposed settlement established a settlement fund of $235,000 and provided that it would bedistributed pro rata to the class members after deducting attorney fees of 30%, costs up to $7000,costs of distribution, and a $2500 incentive payment to the named plaintiffs. The settlement was

pending before the court at press time.

1 See[Plaintiff] v. Standard Mortgage Corp., 1999 U.S. Dist. LEXIS 15787 (W.D. Pa. 1999).2 See[Plaintiff] v. Standard Mortgage Corp., 129 F.Supp.2d 793 (W.D. Pa. 2000) (Defendant Freddie Macdismissed as not liable for acts of its mortgage servicers).


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11.1 Amended Class Action Complaint

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

[FIRST PLAINTIFF] and[SECOND PLAINTIFF], his wife,individually and on behalf of allothers similarly situated,

Plaintiffs,

v.

STANDARD MORTGAGE CORPORATION

OF GEORGIA, and THREE RIVERS BANK

& TRUST COMPANY, and FEDERAL HOMELOAN MORTGAGE CORPORATION

Defendants.

)))))))))))

))))

Civil Action No.: 98-679

[Judge]

CLASS ACTION

AMENDED CLASS ACTION COMPLAINT

1. This class action is brought on behalf of certain Pennsylvania mortgagorswhose mortgage agreements were originated with or acquired by Community SavingsAssociation (Community). Plaintiffs assert claims against Defendant Standard Mortgage

Corporation of Georgia (Standard), which services the mortgages, and Defendants FederalHome Loan Mortgage Corporation (Freddie Mac) and Three Rivers Bank & Trust Company(Three Rivers Bank), which own or owned the mortgages. The claims are based on wrongfulactions engaged in by Defendants Standard, Freddie Mac, and Three Rivers Bank and byCommunity and South View Savings and Loan Association (South View), the Defendantspredecessors in interest.

2. The putative class is defined as all Pennsylvania mortgagors who enteredinto mortgage agreements that originated with or were acquired by Community (CommunityMortgagors, and who were subject to one or more of the following practices engaged in by theDefendants, Community, and/or South View: (1) charging the mortgagor for a loan advance used

to pay a tax, insurance, water, or sewage bill (the bills, unless the mortgagors monthlypayments, as in fact billed, were in arrears; (2) charging the mortgagor interest on a loan advancefor time that preceded the disbursement of the loan advance; (3) failing to pay the mortgagor,until March, 1996, for escrow interest that had accrued during calendar year 1995; (4) sendingthe mortgagor an annual statement on or after April of 1987 that listed Community as themortgage owner; and/or (5) placing payments made by a mortgagor whose mortgage originatedwith South View in an escrow account.


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STATEMENT OF JURISDICTION

3. This Court has jurisdiction over the claims and parties pursuant to theEmergency Home Finance Act of 1970, 12 U.S.C. 1452(e), and 28 U.S.C. 1367(a). Standardalso claims, in its notice of removal, that this Court has jurisdiction under 28 U.S.C. 1332.

PARTIES AND PARTICIPANTS

4. Plaintiffs, [First Plaintiff] and [Second Plaintiff] ([First and SecondPlaintiffs], are adult individuals who have resided at all relevant times at [Plaintiffs Address].They had a mortgage relationship with South View until about December, 1983 and thereafterwith Community until April 1987 and thereafter with Freddie Mac until they prepaid theirmortgage in full in September, 1998.

5. South View Savings and Loan Association (South View) was aPennsylvania Corporation from March 1974 through late 1983, when it consolidated withCommunity. It is no longer registered as a Pennsylvania Corporation, and its last known address

was P.O. Box 51 South, Pittsburgh, Pennsylvania 15236.

6. Community Savings Association (Community) was a Pennsylvaniacorporation, with its principal place of business at 2681 Mosside Boulevard, Monroeville,Pennsylvania 15136, until July 18, 1997, when it consolidated with Three Rivers Bank & TrustCompany.

7. Defendant, Federal Home Loan Mortgage Corporation (Freddie Mac) isa federal instrumentality created under the Emergency Home Finance Act of 1970, 12 U.S.C.1452(a). In 1987, it acquired Community mortgages, including the [First and Second Plaintiffs]mortgage. As a successor in interest on the mortgages it acquired, Freddie Mac is liable for

Communitys wrongful conduct, as alleged in this Amended Complaint. To the extent thatFreddie Mac acquired mortgages originated with South View, it is liable as a successor ininterest for South Views wrongful conduct, as alleged in this Amended Complaint.3

8. Defendant, Three Rivers Bank & Trust Company (Three Rivers Bank),is a Pennsylvania corporation registered to do business at Route 51 South, Jefferson Borough,Pennsylvania 15236, into which Community was consolidated in 1997. It is liable as a successorin interest for Communitys wrongful conduct, as alleged in this Amended Complaint. SinceCommunity was a successor in interest to South View, Three Rivers Bank is also liable as asuccessor in interest for South Views wrongful conduct, as alleged in this Amended Complaint.

9. Defendant, Standard Mortgage Corporation of Georgia (Standard), is aGeorgia corporation licensed to do business in Pennsylvania. It began servicing Community andFreddie Mac mortgages in 1994, pursuant to a service contract dated November 15, 1994. As the

3 This defendant, commonly referred to as Freddie Mac was dismissed from the action on the legal finding that itwas not responsible for the acts of its mortgage servicers. [Plaintiff] v. Standard Mortgage Corp., 129 F.Supp.2d793 (W.D. Pa. 2000).


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collector of mortgage principal and interest from mortgagors, Standard was an agent for bothCommunity and Freddie Mac. As the collector of tax, insurance, water and sewage billpayments from mortgagors, which were designated to be delivered to third parties to pay the tax,insurance, water, and sewage bills (the bills), Standard was an agent for the mortgagors as wellas for Community and Freddie Mac.

STATEMENT OF THE FACTS

10. On or about March 22, 1974, the [First and Second Plaintiffs] entered intoa Mortgage Agreement with South View, which obligated them to repay $26,000 at an interestrate of 8.5% per annum. See Mortgage Agreement, attached as Ex. 1. Contemporaneously, the[First and Second Plaintiffs] executed a Bond with South View. See Bond, attached as Ex. 2.

11. The Mortgage Agreement and Bond, (collectively, the Mortgage)required the [First and Second Plaintiffs] to repay their mortgage debt in monthly payments of$210.00 for principal and interest. See Ex. 1 & 2. The [First and Second Plaintiffs] agreed tomake 300 monthly payments over the course of twenty-five (25) years. See Fed. Reserve Reg. Z

Notice, attached as Ex. 3.

12. The Mortgage further provided that, each month, South View would billthe [First and Second Plaintiffs] for 1/12th of the annual real estate taxes levied on the property.See Ex. 1 & 2. The [First and Second Plaintiffs] agreed to pay the amount South View billed fortaxes each month, in addition to their monthly payment for principal and interest.

13. South View first billed the [First and Second Plaintiffs] for taxes in 1974,informing them that a $40.00 tax payment was necessary to amortize the [First and SecondPlaintiffs] mortgage in accordance with the terms as [the parties] originally agreed to. 8/15/75South View letter, attached as Ex. 4. Throughout the term of their Mortgage, the [First and

Second Plaintiffs] paid the amount they were billed for taxes by South View and its successors.

14. The Mortgage further provided South View discretion to bill the [First andSecond Plaintiffs], each month, for 1/12th of the annual cost of insuring the mortgaged propertyagainst fire and other hazards. See Ex. 1 & 2. Since the [First and Second Plaintiffs] paid theirinsurer for sufficient insurance throughout the term of their mortgage, they were never billed forinsurance by South View or its successors.

15. South View and its successors estimated the total annual cost of the [Firstand Second Plaintiffs] tax bill. Therefore, the [First and Second Plaintiffs] payments wereexpected to and did fall short of their total tax obligation on numerous occasions. To address this problem, the Mortgage required the [First and Second Plaintiffs] to forthwith repay unto the(Bank) any sum or sums of money paid by the (Bank) for or on account of any taxes andpremiums of insurance which the obligor has not paid or maintained.. See Ex. 2.

16. To enable the [First and Second Plaintiffs] to fulfill this obligation, SouthView and its successors were required to notify the [First and Second Plaintiffs] when theirmonthly payments were insufficient to pay their annual tax bill. Neither South View nor itssuccessors ever notified the [First and Second Plaintiffs] when their tax bill was higher than projected. Moreover, South View and its successors loaned the [First and Second Plaintiffs]


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money to cover the shortfalls in their tax payments, and added the loans to their mortgage debt,without giving them any notice. The [First and Second Plaintiffs] were charged interest on theseloans at their high mortgage rate. As a result, the [First and Second Plaintiffs] total mortgagedebt increased dramatically.

17. In or about late 1983, South View consolidated with Community, whichacquired the [First and Second Plaintiffs] Mortgage and other South View mortgages.Thereafter, the [First and Second Plaintiffs] received Annual Loan Account and Annual EscrowStatements bearing the name Community Savings Association. The [First and SecondPlaintiffs] thereafter made timely Mortgage payments to Community.

18. Before this consolidation, Financial Accounting Services, Inc. servicedSouth Views mortgages. See 9/1/83 South View letter, attached as Ex. 5. Afterward, NCR DataProcessing Center (NCR) began servicing the mortgages. See Ex. 5.

19. On or about April 1, 1987, Defendant Freddie Mac acquired the [First andSecond Plaintiffs] Mortgage and other Community mortgages. Yet the [First and Second

Plaintiffs] continued to receive Annual Loan Account and Annual Escrow Statements that borethe name Community, not Freddie Mac.

20. In and after 1994, when Defendant Standard began servicing the [First andSecond Plaintiffs] Mortgage and other Freddie Mac and Community mortgages, the [First andSecond Plaintiffs] received Mortgage Interest Statements (1098 Forms) identifyingCommunity as the Recipients/ Lenders still not Freddie Mac. See 1996 1098 Form, attachedas Ex. 6.

21. In 1996, the [First and Second Plaintiffs] received a1098 Form fromStandard stating that they still owed more than $16,000, which effectively notified them that 300

payments were not sufficient to pay off their Mortgage. The payments they had made, for thefull amounts billed by South View and its successors, had been insufficient to amortize [their]mortgage in accordance with the terms as [they] originally agreed to, (See Exhibit 6), becauseof the wrongful conduct engaged in by South View, Community, Freddie Mac, and Standard, asset forth below.

22. On September 8, 1998, the [First and Second Plaintiffs] fully prepaid theirMortgage. The Defendants did not satisfy their Mortgage until November 10, 1998, more than60 days later.

(1) South View Unilaterally Changed From Capitalizing Plaintiffs

Monthly Tax and Insurance Payments, As Required by the Mortgage,

To Escrowing The Tax and Insurance Payments

23. Under South Views mortgages, South View and its successors wererequired to capitalize the monthly payments for taxes, insurance, and other bills (the bill payments made by the [First and Second Plaintiffs] and other South View mortgagors (theSouth View mortgagors. Under capitalization, South View credited each mortgagors bill payments to reduce their unpaid balance until they were due. In other words, South Viewtemporarily reduced the unpaid balance by the amount of the bill payment. When a bill was due,


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South View paid the bill on behalf of the mortgage and simultaneously increased the mortgagorsunpaid balance by the amount of the bill. The practice had the effect of lowering the interest thataccrued annually on the mortgagors unpaid balances.

24. The [First and Second Plaintiffs] Mortgage demonstrates thatcapitalization was required:

[I]t is expressly understood and agreed, that the monthly paymentsmade by Obligor shall be applied first to interest on the unpaid balance of the principal sum and the remainder thereof shall becredited on account of said sum, . . . (emphasis added)

Ex. 1. According to this language, payments made by a mortgagor that exceed accrued interestmust be credited to reduce the mortgagors unpaid balance, i.e. capitalized. South Viewsmortgages did not give South View or its successors discretion to otherwise use the mortgagorspayments.

25. Until December of 1982, South View complied with its obligations andcapitalized the its mortgagors bill payments, effectively paying them interest at their mortgagerate (8.5% per annum for the [First and Second Plaintiffs]) on their tax money.

26. In or about January of 1983, South View breached its contractualobligations by ceasing to capitalize its mortgagors bill payments. Instead, it established tax andinsurance escrow accounts into which it placed monthly bill payments belonging to the[Plaintiffs] and other mortgagors, which it later removed to pay bills when they became due. See[First and Second Plaintiffs] 1983 Statement of Loan Account, attached as Ex. 7.

27. In early 1983, the [First and Second Plaintiffs] received a Statement of

Loan Account from South View that included an escrow category. Specifically, the Statementshowed a $55.00 Escrow Payment and beginning and ending escrow balances as $0.00. SeeEx. 7.

28. After South View merged with Community, Community continued theimproper practice of placing bill payments in escrow, rather than capitalizing them. In 1984,Community informed the [First and Second Plaintiffs] and other mortgagors that it would paythem interest at the rate of 1% on money held in escrow. This rate was significantly lower thanthe effective rate of interest under capitalization. See 11/6/84 Community letter, attached as Ex.8.

29. After Freddie Mac acquired the [First and Second Plaintiffs] mortgageand other mortgages from Community, it continued placing bill payments in escrow, in breach ofits mortgage obligations.

30. The accounting change from capitalization to escrow caused the [Firstand Second Plaintiffs] and other South View mortgagors substantial economic injury. Forexample, the [First and Second Plaintiffs] effectively received interest on capitalized billpayments at a rate of 8%, but received interest of no more than 1% on bill payments held inescrow. Other mortgagors were likewise injured.


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(2) South View, Community, and Freddie Mac Added Additional Loans

To Mortgagors Unpaid Balances, Without Notifying Them

31. Like South Views mortgages, the mortgages owned by Community andFreddie Mac required the mortgagors to make certain bill payments to the mortgagee, includingpayments for taxes, insurance, water and sewage.

32. South View, Community, and Freddie Mac each engaged in the practice ofadding additional loans to mortgagors unpaid balances without notifying them. These loanswere made when the actual bills exceeded projections, so that the mortgagors bill paymentswere insufficient to pay the bills.

33. South Views, Communitys, and Freddie Macs mortgages required themto notify mortgagors when they advanced additional loans and to give the mortgagors theopportunity to repay the loan advances. For example, the [First and Second Plaintiffs]Mortgage required them to forthwith repay unto the [Bank] any sum or sums of money paid bythe [Bank] for or on account of any taxes . . . .

34. By failing to notify mortgagors of the loan advances, South View,Community, and Freddie Mac prevented them from timely repaying the loan advances. See Ex.2.

35. This practice amounted to conversion of the mortgagors home equities.

36. South Views, Communitys, and Freddie Macs practice adding loanadvances to mortgagors unpaid balances, without notice, caused serious economic injuries to the[First and Second Plaintiffs] and other mortgagors, who were unable to exercise their contractualrights to fully pay tax, insurance, water, and sewage bills and to promptly repay the lenders for

any loans necessary to pay the bills.

(3) South View, Community, and Freddie Mac Charged the PlaintiffsInterest On Loan Advances For Time Periods That Pre-dated the

Date of Distribution

37. South View charged mortgagors interest on loan advances for dayspreceding the date on which the loan money with distributed.

38. For example:

A. On November 1, 1974, South View began charging the [First and

Second Plaintiffs] interest for a $3,000 advance made onNovember 24, 1974, resulting in a $34.76 overcharge;

B. On August 1, 1975, South View began charging the [First andSecond Plaintiffs] interest for an advance made on August 13,1975;


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C. On March 1, 1976, South View began charging the [First andSecond Plaintiffs] interest for advances made on March 5, 1976and May 6, 1976; and

D. On May 1, 1979, South View began charging the [First and SecondPlaintiffs] interest for an advance made on May 21, 1979.

39. Community and Freddie Mac also engaged in the practice of charginginterest on advances on the first of a month, although the advances were made later in the month.

(4) Community Failed to Timely Pay Plaintiffs At Least One Substantial

Interest Payment for Money Held in Escrow

40. On November 6, 1984, Community agreed to pay escrow interest to itsmortgagors [at] year end, and on a yearly basis thereafter. See Ex. 8.

41. After Standard began servicing Community and Freddie Mac mortgages in

1994, it failed, at least once, to pay Community mortgagors (including those whose mortgagorshad been acquired by Freddie Mac) interest at year end. Standard did not credit the mortgagorsaccounts until March of 1996 for interest that had accrued during 1995 on money in escrow.

42. Plaintiffs have been injured by this practice, since they lost the use of theirmoney during that time.

(5) Community, Freddie Mac, Standard, and Three Rivers Bank Have

Deceptively Concealed from Plaintiffs the Fact that Freddie Mac Had

Acquired the Mortgages

43. Community, Freddie Mac, Standard, and Three Rivers Bank haveintentionally or recklessly concealed from Community mortgagors whose mortgages wereacquired by Freddie Mac that Freddie Mac owns their mortgages.

44. On August 9, 1999, Standard disclosed for the first time of record thatFreddie Mac owned 95% and Three Rivers Bank owned 5% of the [First and Second Plaintiffs]Mortgage. Thereafter, by letter dated September 16, 1999, Standard disclosed that Freddie Macowned 100% of the [First and Second Plaintiffs] Mortgage and that Three Rivers Bank had noownership interest in their Mortgage.

45. On and after April 1987, when Freddie Mac acquired the mortgages,statements sent to mortgagors informed them that Community owned their mortgages.

46. For example, on or about October 28, 1994, a Dear Valued MortgageCustomer letter sent on behalf of Community to Freddie Mac mortgagors deceptively impliedthat Community owned their mortgages:

The servicing of your mortgage loan originated at Community SavingsBank will be transferred to Standard Mortgage Corporation of Georgia(SMCG). Standard Mortgage Corporation is an affiliate of Community


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Savings Bank. The effective date of this transfer will be November 16,1994. The transfer of loan servicing loan will not affect the terms orconditions of your original mortgage loan agreement.

* * *

Thank you for banking with Community Savings Bank. Please keep inmind that since Standard Mortgage Corporation is an affiliate ofCommunity Savings Bank, you can expect to receive the same qualityservice you have in the past.

47. Standard also sent a Dear Valued Mortgage Customer letter to FreddieMac mortgagors, like the [First and Second Plaintiffs], that deceptively implied that Communityowned their mortgages:

Welcome to Standard Mortgage Corporation of Georgia (SMCG). Asyour were recently notified by Community Savings Bank, the servicing of

your mortgage loan will be transferred to SMCG. Standard MortgageCorporation is an affiliate of Community Savings Bank. SMCG willbegin servicing your account on November 16, 1994.

48. Both the account statements and the letters sent to Freddie Macmortgagors falsely concealed from them that Freddie Mac owned their mortgages.

CLASS ACTION ALLEGATIONS

49. The putative class is defined as all Pennsylvania mortgagors who enteredinto mortgage agreements that originated with or were acquired by Community (CommunityMortgagors), and who were subject to one or more of the following practices engaged in by theDefendants, Community, and/or South View: (1) charging the mortgagor for a loan advance usedto pay a tax, insurance, water, or sewage bill (the bills), unless the mortgagors monthlypayments, as in fact billed, were in arrears; (2) charging the mortgagor interest on a loan advancefor time that preceded the disbursement of the loan advance; (3) failing to pay the mortgagor,until March, 1996, for escrow interest that had accrued during calendar year 1995; (4) sendingthe mortgagor an annual statement on or after April of 1987 that listed Community as themortgage owner; and/or (5) placing payments made by a mortgagor whose mortgage originatedwith South View in an escrow account.

50. The class members are so numerous that joinder of all members isimpracticable. It is believed and therefore averred that there are over 500 mortgages within eachcategory of claims identified above and in each Count of this Amended Complaint.

51. The claims of the [First and Second Plaintiffs] are typical of the claims ofeach of the class members, and the [First and Second Plaintiffs] have no claims that areantagonistic to class members. They are aware that they cannot settle this action without Courtapproval. They have and will continue to vigorously pursue the class member claims.


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52. The Representative Plaintiffs, [First Plaintiff] and [Second Plaintiff], willfairly and adequately protect the interests of the class members. Plaintiffs are committed to thevigorous representation of the class members and have retained competent counsel experiencedin the prosecution of complex and class action litigation. Counsel have agreed to advance thecosts of the litigation contingent upon the outcome.

53. South View, Three Rivers, Community, Standard and Freddie Mac haveall acted on grounds generally applicable to the class members, thereby justifying relief againstDefendants Standard, Freddie Mac, and Three Rivers Bank for the class members as whole.

54. A class action is superior to other methods for the fair and efficientadjudication of this controversy because prosecution of separate actions by mortgagors creates ahigh risk of inconsistent and varying adjudications, with inconsistent and varying results.Furthermore, as the damages suffered by many individual class members may be relatively smallin relation to the costs of litigation, the expense and burden of individual litigation make itdifficult, if not impossible, for class members to individually redress the wrongs done to them.Many, if not most, of the class members are unaware that claims exist against Three Rivers (assuccessor to Community) or Freddie Mac (as the mortgage owner) or against servicer Standard.There will be no unusual difficulty in the management of this class action.

55. Questions of fact and law common to the class that predominate include:

I. Did South View, Community, or Freddie Mac breach theircontractual obligations to the class members by:

A. Adding loan advances to their outstanding balances withoutgiving them notice?

B. Charging them interest on loan advances that predateddates on which the loan advances were disbursed?

II. Did Standard aid and abet Freddie Macs and Communitys breachof their fiduciary duties to their mortgagors by failing to payescrow interest at year end in 1995, instead delaying payment ofinterest, without compensation, until March 1996?

III. Are Three Rivers Bank, Communitys successor, and Freddie Mac,as the owner of Community mortgages, liable for theirpredecessors breach of the mortgage contracts?

IV. Did South View, Community, or Freddie Mac violate thePennsylvania Unfair Trade Practices and Consumer ProtectionLaw (CPL), 73 P.S. 201-2(4)(v) and (vii) by engaging in thefollowing conduct:

A. Adding loan advances to their outstanding balances withoutgiving them notice?


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B. Charging them interest on loan advances that predateddates on which the loan advances were disbursed?

V. Are Three Rivers Bank, Communitys successor, and Freddie Mac,the owner of Community mortgages, liable for their predecessorsviolations of the CPL?

VI. Did South View, Community, and Freddie Mac wrongly benefitmaking loan advances to the class members at high interest rates,without notice?

VII. Are Three Rivers Bank, Communitys successor, and Freddie Mac,as the owner of Community mortgages, liable for theirpredecessors unjust enrichment?

VIII. Did Standard wrongly benefit by under-billing the class membersso that they or the mortgagee could advance money to the class

members at high interest rates?

IX. Did South View, Community, or Freddie Mac violate their specialduties, such that a constructive trust and accounting should berequired to prevent their unjust enrichment from the followingactivity:

A. Wrongfully, and in breach of their contractual obligations,adding loan advances to the class members unpaidmortgage balances, without notifying the class members ofthe advances?

B. Wrongfully charging the class members interest on loanadvances that predates dates on which the loan advanceswere disbursed?

X. Is Three Rivers Bank, Communitys successor, and Freddie Mac,as the owner of Community mortgages, liable for theirpredecessors violations of their special duties?

XI. Did Standard violate its special duties or aid and abet Community,Freddie Mac, or Three Rivers Bank in violating their specialduties, such that a constructive trust and accounting should be

required to prevent its unjust enrichment from the followingactivity:

A. Wrongfully adding loan advances to the class membersunpaid mortgage balances, without notifying the classmembers of the advances?


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B. Wrongfully charging the class members interest for loanadvances that predates dates on which the loan advanceswere disbursed?

LEGAL CAUSES OF ACTION

Count I

Breach Of Contract Against Freddie Mac, For Direct And Successor Liability, And Three

Rivers Bank, For Successor Liability, On Behalf Of Plaintiffs Whose Mortgages

Originated With South View

56. The allegations of Paragraphs 1 to 55 are incorporated.

57. South View, Community, and Freddie Mac breached their contractualobligations to Plaintiffs whose mortgages originated with South View in at least the followingrespects:

A. Failing to capitalize South View mortgagors tax and insurancepayments, as required by the South View Mortgages, and therebyconverting to themselves the benefits of the float that Plaintiffswere contractually entitled to receive;

B. Over-billing South View mortgagors to maintain tax and insuranceescrow accounts when no such account was contractually requiredunder their South View Mortgages; and

C. Paying South View mortgagors no more than 1% interest on bill payments held in escrow that should have been capitalized at aneffective interest rate equivalent to their mortgage rate.

58. Freddie Mac is directly liable to Plaintiffs for its own breaches of contractand liable as a successor for South Views and Communitys breaches of contract. Three RiversBank is liable as a successor for South Views and Communitys breaches of contract.

WHEREFORE, the [First and Second Plaintiffs] respectfully request, individually

and on behalf of the putative class, a judgment declaring that Freddie Mac is liable directly andas a successor and Three Rivers Bank is liable as a successor for the breaches of contract andawarding them compensatory damages, interest and court costs, and such other relief as thisCourt deems just and proper.


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Count II

Breach Of Contract Against Freddie Mac, For Direct And Successor Liability, And Three

Rivers Bank, For Successor Liability, On Behalf Of All Plaintiffs

59. Paragraphs 1 to 58 are incorporated.

60. South View, Community, and Freddie Mac breached their contracts withthe Plaintiffs by:

A. Adding loan advances to their unpaid mortgage balances, withoutnotice;

B. Charging them interest for loan advances that predated the dates onwhich the loan advances were disbursed; and

C. Failing to pay, until March of 1996, interest that accrued during

1995 on money in escrow.

61. Freddie Mac is directly liable to Plaintiffs for its own breaches of contractand liable as a successor for South Views and Communitys breaches of contract. Three RiversBank is liable as a successor for South Views and Communitys breaches of contract.

WHEREFORE, the [First and Second Plaintiffs] respectfully request, individuallyand on behalf of the putative class, a judgment declaring that Freddie Mac is liable directly andas a successor and Three Rivers Bank is liable as a successor for the breaches of contract andawarding them compensatory damages, interest and court costs, and such other relief as thisCourt deems just and proper.

Count III

Violations Of Pennsylvanias Unfair Trade And Consumer Protection Act Arising From

The Placement In Escrow Of Bill Payments Made By Plaintiffs Whose Loans Originated

With South View, Against Freddie Mac, For Direct And Successor Liability, Standard, For

Direct Liability, And Three Rivers Bank, For Successor Liability


63. South View, Community, Freddie Mac, and Standard, the mortgageservicer, have violated the Pennsylvania Unfair Trade and Consumer Protection Law, 73 P.S.

201-2(4)(v), which states that it is an unfair trade practice to [represent[] that goods orservices . . . characteristics . . . that they do not have . . . ., by falsely representing that:

A. The South View mortgage contracts authorized the placement inescrow of bill payments made by South View mortgagors; and

B. The South View mortgagors could be billed for the maintenance ofescrow accounts.


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64. Freddie Mac is directly liable to Plaintiffs for its own breaches of contractand liable as a successor for South Views and Communitys breaches of contract. Standard isdirectly liable for its own breaches of contract. Three Rivers Bank is liable as a successor forSouth Views and Communitys breaches of contract.

WHEREFORE, the [First and Second Plaintiffs] respectfully request, individuallyand on behalf of the class, a judgment declaring that Freddie Mac and Standard are directlyliable, and Freddie Mac and Three Rivers Bank are liable as successors, for violations of thePennsylvania Unfair Trade Practices and Consumer Protection law; and awarding them trebledamages as provided for by 73 P.S. 201-9.2(a), attorneys fees and expenses, and such otherrelief as this Court deems just and proper.

Count IV

Violations Of Pennsylvanias Unfair Trade And Consumer Protection Act For The

Addition Of Loan Advances To Plaintiffs Unpaid Mortgage Balances, Without Notice,

Against Freddie Mac, For Direct And Successor Liability, Standard, For Direct Liability,

And Three Rivers Bank, For Successor Liability


66. South View, Community, Freddie Mac, and Standard, the mortgageservicer, have violated the Pennsylvania Unfair Trade and Consumer Protection Law, 73 P.S.201-2(4)(xxi), which states that it is an unfair trade practice to engag[e] in any otherfraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding,by concealing that they:

A. Added loan advances to Plaintiffs unpaid mortgage balances,

without notice; and

B. Charged Plaintiffs interest for loan advances that predated thedates on which the loan advances were disbursed.

67. Freddie Mac is directly liable to Plaintiffs for its own breaches of contractand liable as a successor for South Views and Communitys breaches of contract. Standard isdirectly liable for its own breaches of contract. Three Rivers Bank is liable as a successor forSouth Views and Communitys breaches of contract.

WHEREFORE, the [First and Second Plaintiffs] respectfully request, individuallyand on behalf of the class, a judgment declaring that Freddie Mac and Standard are directly

liable, and Freddie Mac and Three Rivers Bank are liable as successors, for violations of thePennsylvania Unfair Trade Practices and Consumer Protection law; and awarding them trebledamages as provided for by 73 P.S. 201-9.2(a), attorneys fees and expenses, and such otherrelief as this Court deems just and proper.


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Count V

Violations of Pennsylvanias Unfair Trade And Consumer Protection Act For

Misrepresenting And Concealing That Freddie Mac Owned Certain Mortgages, Against

Freddie Mac, For Direct And Successor Liability, Standard, For Direct Liability, And

Three Rivers Bank, For Successor Liability


69. The Pennsylvania Unfair Trade and Consumer Protection Law, 73 P.S. 201-2(4) make it an unfair and deceptive trade practice to:

(i) Pass off goods and services as those of another;

(ii) Cause likelihood of confusion or of misunderstanding as to thesource, sponsorship, approval or certification of goods or services;

(iii) Cause likelihood of confusion or of misunderstanding as toaffiliation, connection with, or certification by, another; and

(v) Represent that goods or services have sponsorship they do not haveor that a person has a sponsorship, approval status, affiliation orconnection that he does not have.

70. Community and Standard falsely represented that: (1) Community ownedcertain Mortgages that actually were owned by Freddie Mac; and that (2) Standard serviced theMortgages for Community when, in fact, Standard services the Mortgages for Freddie Mac.

71. Freddie Mac concealed that it was the owner of these Mortgages.

72. Communitys, Standards, and Freddie Macs false representations andconcealment deprived Plaintiffs of: (1) the ability to address their mortgage concerns to the trueowner of their Mortgages; and (2) important mortgage-related information, including:

1. Many of their state statutory protections, including mortgagesatisfaction protections (21 P.S. 681) and mortgage foreclosureprotections (42 Pa. C.S.A. 1722(b)), were pre-empted as a resultof the transfer of their Mortgages to Freddie Mac, a federalinstrumentality;

2. They no longer had the right to sue their mortgagee in state court.See 12 U.S.C. 1452(f); and

3. Only Freddie Mac had the right and the power to resolve Mortgagedisputes.

WHEREFORE, the [First and Second Plaintiffs] respectfully request, individuallyand on behalf of the class, a judgment declaring that Freddie Mac and Standard are directly


17/94

liable, and Freddie Mac and Three Rivers Bank are liable as successors, for violations of thePennsylvania Unfair Trade Practices and Consumer Protection law; and awarding them trebledamages as provided for by 73 P.S. 201-9.2(a), attorneys fees and expenses, and such otherrelief as this Court deems just and proper.

Count VI

Tortious Interference With Contract Against Standard, For Direct Liability, And Three

Rivers Bank, For Direct And Successor Liability


74. Community, Standard, and Three Rivers Bank tortuously interfered withthe mortgage contracts of Plaintiffs whose mortgages were sold to Freddie Mac by concealingfrom the Plaintiffs, through both affirmative misrepresentations and omissions, that Freddie Macowned their mortgages.

75. As a direct and proximate result, Plaintiffs have suffered economic injury,as explained above.

WHEREFORE, the [First and Second Plaintiffs] request a judgment, individuallyand on behalf of the class they seek to represent, a judgment declaring that Standard is directlyliable and Three Rivers Bank is liable directly and as a successor for tortuous interference withthe Plaintiffs contracts and awarding the Plaintiffs compensatory damages, interest and courtcosts, and such other relief as this Court deems just and proper.

Count VII

Breach Of Fiduciary Against Freddie Mac, For Direct And Successor Liability, And Three

Rivers Bank, For Successor Liability


77. South View, Community, and Freddie Mac obtained possession of billpayments belonging to the Plaintiffs for specific purpose of delivering the bill payments to thirdparties. Thus, South View, Community and Freddie Mac were trustees with respect to Plaintiffsbill payments.

78. As such, South View, Community and Freddie Mac had a special duty toPlaintiffs to act strictly with the bounds of their contractual authorization. In this connection,

South View, Community, and Freddie Mac were not contractually authorized to:

1. Place in escrow bill payments belonging to Plaintiffs whosemortgages originated with South View;

2. Add loan advances to Plaintiffs unpaid mortgage balances,without notice;


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3. Charge Plaintiffs interest on loan advances predating the dates onwhich the loan advance was disbursed; and

4. Fail to pay, until March of 1996, interest that had accrued during1995 on money in escrow.

79. South View, Community, Freddie Mac, and Three Rivers Bank,Communitys successor, wrongly benefited from and were unjustly enriched through these practices. Plaintiffs were injured, as these practices increased their unpaid mortgage balancesand deprived them of the use of their money.

WHEREFORE, the [First and Second Plaintiffs] request a judgment, individuallyand on behalf of the class they seek to represent: (1) declaring Freddie Mac liable, directly and asa successor, and Three Rivers Bank liable, as a successor, for these breaches of fiduciary duty;(2) requiring Freddie Mac and Three Rivers Bank to provide the Plaintiffs an accounting of theamount they actually paid on their mortgages and the amount they would have paid if they hadnot been subject to these wrongful practices; and (3) requiring Freddie Mac and Three Rivers

Bank to make restitution to the Plaintiffs of the difference between the amount they actually paidon their mortgages and the amount they would have paid if they had not been subject to thesewrongful practices.

Count VIII

Aiding And Abetting Breaches Of Fiduciary Duty Against Standard


81. Standard aided and abetted Community and Freddie Mac, trustees with

respect to the bill payments, to violate their fiduciary duties.

82. Community and Freddie Mac breached their fiduciary duties to thePlaintiffs by:

A. Placing in escrow bill payments belonging to Plaintiffs whosemortgages originated with South View;

B. Adding loan advances to Plaintiffs unpaid mortgage balances,without notice;

C. Charging Plaintiffs interest on loan advances predating the dates

on which the loan advance was disbursed; and

D. Failing to pay interest that had accrued during 1995 on money inescrow until March of 1996.

83. Standard knew that Community and Freddie Mac were violating theirfiduciary duties to the Plaintiffs by engaging in these practices.


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84. As the servicer, it was Standard who implemented each of these practices.Therefore, Standard substantially assisted Freddie Mac and Community in effecting theirbreaches of fiduciary duty.

WHEREFORE, the [First and Second Plaintiffs] request a judgment, individuallyand on behalf of the class they seek to represent: (1) declaring Standard liable for aiding andabetting these breaches of fiduciary duty; (2) requiring Standard to provide the Plaintiffs anaccounting of the amount they actually paid on their mortgages and the amount they would havepaid if they had not been subject to these wrongful practices; and (3) requiring Standard to makerestitution to the Plaintiffs of the difference between the amount they actually paid on theirmortgages and the amount they would have paid if they had not been subject to these wrongfulpractices.

PRAYER FOR RELIEF

WHEREFORE, for the reasons stated above, the Representative Plaintiffs, [FirstPlaintiff] and [Second Plaintiff], individually and on behalf of the class they represent

respectfully request:

1. Compensatory damages including interest against Three Rivers Bank andFreddie Mac resulting from South Views, Communitys, and Freddie Macs breaches ofcontract, as alleged in Count I of this Amended Complaint;

2. Compensatory damages including interest against Three Rivers Bank andFreddie Mac resulting from South Views, Communitys, and Freddie Macs breaches ofcontract, as alleged in Count II of this Amended Complaint;

3. Treble damages including interest against Three Rivers Bank, Freddie

Mac, and Standard, resulting from South Views, Communitys, Freddie Macs, and Standardsviolations of the Unfair Trade and Consumer Protection Act, as alleged in Count III of thisAmended Complaint;

4. Treble damages including interest against Three Rivers Bank, FreddieMac, and Standard, resulting from South Views, Communitys, Freddie Macs, and Standardsviolations of the Unfair Trade and Consumer Protection Act, as alleged in Count IV of thisAmended Complaint;

5. Treble damages including interest against Three Rivers Bank, FreddieMac, and Standard, resulting from Communitys, Freddie Macs, and Standards violations of theUnfair Trade and Consumer Protection Act, as alleged in Count V of this Amended Complaint;

6. Compensatory damages including interest against Three Rivers Bank andStandard resulting from Communitys, Standards, and Three Rivers Banks breaches ofcontract, as alleged in Count VI of this Amended Complaint;

7. An accounting and restitution against Three Rivers Bank and Freddie Macresulting from South Views, Communitys, and Standards breaches of fiduciary duty, asalleged in Count VII of this Amended Complaint;


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8. An accounting and restitution against Standard resulting from its aidingand abetting South Views, Communitys, and Standards breaches of fiduciary duty, as allegedin Count VIII of this Amended Complaint;

9. Interest and court costs; and

10. Such other relief as this Court deems just and proper.

A JURY TRIAL IS REQUESTED.

By_________________________________

[Attorney for Plaintiffs]

Dated: November 15, 1999




Plaintiffs,

v.


OF GEORGIA, and THREE RIVERS BANK& TRUST COMPANY, and FEDERAL HOMELOAN MORTGAGE CORPORATION

Defendants.

))))

)))))))))))


[Judge]

CLASS ACTION

NOTICE TO DEFEND

You have been sued in court. If you wish to defend against the claims set forth inthe following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing inwriting with the court your defenses or objections to the claims set forth against you. You arewarned that if you fail to do so the case may proceed without you and a judgment may be enteredagainst you by the court without further notice for any money claimed in the Complaint and for


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any claim or relief requested by the Plaintiff. You may lose money or property or other rightsimportant to you.

YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT

HAVE OR KNOW A LAWYER, THEN YOU SHOULD GO TO OR TELEPHONE THE

OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP:

Fairfax Bar Association Lawyer Referral Service

[Address]

11.2 Plaintiffs First Set of Interrogatories



[FIRST PLAINTIFF] and

[SECOND PLAINTIFF], his wife,individually and on behalf of allothers similarly situated,

Plaintiffs,

v.


OF GEORGIA, and THREE RIVERS BANK& TRUST COMPANY, and FEDERAL HOME

LOAN MORTGAGE CORPORATION

Defendants.

)

)))))))))))

)))


[Judge]

CLASS ACTION

A JURY TRIAL IS DEMANDED

PLAINTIFFS FIRST SET OF INTERROGATORIES DIRECTED TO

DEFENDANT STANDARD MORTGAGE CORPORATION OF GEORGIA

AND NOW come the Plaintiffs, [First Plaintiff] and [Second Plaintiff], on behalf of themselvesand all others similarly situated, [Plaintiffs], by their counsel, [Attorney for Plaintiffs], andpursuant to Fed R.Civ.P 34, make this their First Set of Interrogatories directed to Defendant

Standard Mortgage Corporation of Georgia (Standard). Defendant is requested to respond tothese interrogatories within thirty (30) days, unless the parties mutually agree to an alternatedate.

I. DEFINITIONS

1. The term person(s) means all entities, and, without limiting thegenerality of the foregoing, includes natural persons, joint owners, associations, companies,partnerships, joint ventures, corporations, trusts and estates.


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2. The term document(s) means all written, printed, recorded or graphicmatter, photographic matter or sound reproductions, video tapes and/or films, however producedor reproduced, pertaining in any manner to the subject matter indicated, including computertapes, discs, or other electronically stored data.

3. The terms identify and identity, when used with respect to a person orpersons, means to state the full name and present or last known residence and business address.

4. The terms identify and identity, when used with respect to a documentor documents, means to describe the document or documents by date, subject matter, name(s) or person(s) that wrote, signed, initialed, dictated or otherwise participated in the creation of thesame, the name(s) of the addressee or addressees (if any) and the name(s) and address(es) ofeach person or persons who have possession, custody or control of said document or documents.If any such document was, but is no longer, in your possession, custody or control, or is nolonger in existence, state the date and manner of its disposition.

5. The term identify, when used with respect to an act (including an

alleged offense), occurrence, statement or conduct [hereinafter collectively called act], meansto: (1) describe the substance of the event or events constituting such act; and to state the datewhen such act occurred; (2) identify each and every person or persons participating in such act;(3) identify all other persons (if any) present when such act occurred; (4) state whether anyminutes, notes, memoranda or other documentation of such act was made; (5) state whether suchdocument now exists; and (6) identify the person or persons presently having possession, custodyor control of each document.

6. The term relate to means directly, indirectly, referring to, relating to,connected with, commenting on, impinging or impacting upon, affecting, responding to,showing, describing, analyzing, reflecting or constituting.

7. The terms Defendant, Standard, you and your refer to StandardMortgage Corporation of Georgia and all agents, employees, officers, and other representativesacting on its behalf.

8. The term South View refers to South View Savings and LoanAssociation and all agents, employees, officers and other representatives acting on its behalf.

9. The term Community refers to Community Savings Association andall agents, employees, officers and other representatives acting on its behalf.

10. The term Three Rivers Bank refers to Three Rivers Bank & TrustCompany and all agents, employees, officers and other representatives acting on its behalf.

11. The term Freddie Mac refers to Federal Home Loan MortgageCorporation and all agents, employees, officers and other representatives acting on its behalf.

12. The terms mortgage and mortgages refer to residential mortgages.


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13. The term annual bills refers to the aggregate annual cost of all taxes,insurance, and other collateral-related bills that are paid by the mortgagee or its servicer onbehalf of the mortgagor.

14. The term monthly bill payments refers to the payments that mortgagorsare required to make monthly to the mortgagee or its servicer to cover the annual bills.

15. The terms capitalization and capitalization method refer to the practice of applying mortgagors monthly bill payments to reduce their outstanding mortgageloan balances until their annual bills become due.

16. The terms escrow and escrow account refer to the accounts into whichmortgagors monthly bill payments are placed.

17. The term escrow method refers to the practice of placing monthly billpayments into escrow accounts.

18. The terms and and or shall be interpreted conjunctively anddisjunctively, to give the interrogatories the broadest interpretation.

19. The singular shall include the plural, and the plural shall include thesingular.

II. INSTRUCTIONS

1. Dates in Interrogatories. When an interrogatory asks for a specific date ortime and you cannot answer precisely, despite reasonable effort, please answer as of the nearestdate for which information is available, and specify the date used in your answer.

2. Numbers or Amounts Requested. Where an interrogatory asks for aspecific number or amount and you cannot answer precisely, despite reasonable effort, please:

(i) provide your best estimate;

(ii) state that your answer is an estimate,

(iii) state the basis for your estimate,

(iv) identify the documents upon which your estimate is based, and

(v) identify the documents and method from which an exact answer could bedetermined.

3. Procedure to Assert Claim of Privilege. If any privilege is claimed as toany document requested herein, state:

(i) The nature of the privilege claimed (i.e., attorney-client, workproduct, etc.);


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(ii) The name of the attorney, if any, with respect to whom theprivilege is claimed;

(iii) The facts upon which Defendant relies as the basis for claiming theprivilege as to the specific document; and

(iv) The date of the document; identify the type of document (i.e.,letter, memo, etc.); set forth the subject matter thereof; identify each person whoprepared it and each person (if any) who signed it; identify each person to whomit was directed, circulated, or shown; and identify each person now in possessionof the document.

4. In responding to these Interrogatories, do not provide information that youhave already provided to Plaintiffs before in response to earlier Interrogatories or Requests forProduction of Documents.

III. INTERROGATORIES

1. Identify all individuals and groups, whether or not affiliated with oremployed by South View or Community, that were involved in evaluation(s) of South Viewsuse of the capitalization method of applying monthly bill payments. Explain the role of each.

2. Identify all individuals and groups, whether or not affiliated with oremployed by South View or Community, that were involved in evaluation(s) of the escrowmethod of applying monthly bill payments prior to South Views implementation of the escrowmethod. Explain the role of each.

3. Identify all individuals and groups, whether or not affiliated with or

employed by South View or Community, that were involved in evaluation(s) of the escrowmethod subsequent to South Views implementation of the escrow method. Explain the role ofeach.

4. Identify all individuals and groups, whether or not affiliated with oremployed by South View or Community, that were involved in comparison(s) of the escrowmethod and the capitalization method. Explain the role of each.

5. Identify the Community and/or South View department(s) responsible fordetermining the amount of mortgagors monthly bill payments.

6. Identify the Community and/or South View department(s) responsible for

notifying mortgagors when their mortgages are not being amortized as scheduled.

7. State your policies and procedures for notifying mortgagors that theirmonthly bill payments are insufficient to amortize their mortgages under the mortgage schedule,including, interalia, when and how notice is given.


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8. Identify, by year, each system you have used at any time between January1, 1970 and the present to store, organize and/or categorize documents related to each mortgageloan (mortgage documents and mortgage loan histories).

9. Identify, by year, each system you have used at any time between Januaryl, 1970 and the present to locate specific mortgage documents and/or mortgage loan histories.

10. State, as precisely as possible, when you began and ceased using each ofyour different systems for locating specific mortgage documents and/or mortgage loan histories.

11. For each year from January 1, 1970 to the present identify, by year, yourretention and deletion policies for documents related to mortgages were paid off.

12. Describe how you would search for documents related to mortgages thathave been paid off.

13. Describe how you would search for documents related to mortgages that

have outstanding balances or are still active.

14. Describe in detail how South Views loan files are stored, organized,and/or categorized.

15. Identify how you would locate mortgage documents and/or mortgageaccount histories for mortgages once owned by South View.

By_______________________________


DATED: April 28 ,2000


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11.3 Plaintiffs Class-Related Interrogatories




Plaintiffs,

v.


OF GEORGIA, and THREE RIVERS BANK

& TRUST COMPANY, and FEDERAL HOMELOAN MORTGAGE CORPORATION

Defendants.

)))))))))))

))))


[Judge]

CLASS ACTION


PLAINTIFFS CLASS-RELATED INTERROGATORIES DIRECTED

TO DEFENDANT STANDARD MORTGAGE COMPANY OF GEORGIA

AND NOW come the Plaintiffs, [First Plaintiff] and [Second Plaintiff], on behalfof themselves and all others similarly situated, by their counsel, [Attorney for Plaintiffs], andpursuant to Fed R.Civ.P 34, make this their Class-Related Second Set of Interrogatories Directedto Defendant Standard Mortgage Company of Georgia, [Standard], pursuant to Fed. R. Civ. P.

33, to be answered fully, in writing and under oath.

I. DEFINITIONS AND INSTRUCTIONS

These Interrogatories are governed by the same definitions and instruction listedin Plaintiffs First Set of Interrogatories Directed to Standard Mortgage of Georgia, which wasserved on April 28, 2000.

III. INTERROGATORIES

1. State the number of mortgages that Standard has acquired, in whole orpart, for which South View Savings and Loan Association was the original mortgagee (SouthView mortgages).

2. State the number of South View mortgages that Standard has acquired, inwhole or part, which South View entered into prior to January of 1983.

3. State the number of South View mortgages that Standard has acquired, inwhole or part, for which South View capitalized bill payments at any time.


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4. State the number of South View mortgages that Standard has acquired, inwhole or part, for which Standard (or its servicer) has used the escrow method of applyingmonthly bill payments at any time.

5. State the number of mortgages that Standard has acquired, in whole orpart, from Community Savings Association (Community mortgages).

6. State the number of Community mortgages that Standard acquired, inwhole or part, subsequent to November 6, 1984.

7. State the number of Community mortgages in which Standard has a partialinterest and Community has a partial interest.

8. State whether Standard (or its servicer) has added additional loans toSouth View or Community mortgage accounts to pay tax, insurance, and/ or other bills related tothe mortgaged property.

9. State the number of South View and Community mortgage accounts towhich Standard (or its servicer) has added one or more additional loans to pay tax, insurance, orother bills related to the mortgaged property.

10. State whether Standard (or its servicer) has charged interest on loanadvances added to South View or Community mortgage accounts for time periods that pre-datethe date of the distribution of the loan advance.

11. State the number of South View and Community mortgages for whichStandard (or its servicer) has charged interest on loan advances for time periods that pre-date thedate of distribution of the loan advance.

By_______________________________


DATED: [Date]


28/94

11.4 Plaintiffs First Request for Production of Documents Directed to First

Defendant




Plaintiffs,

v.


OF GEORGIA, and THREE RIVERS BANK& TRUST COMPANY, and FEDERAL HOMELOAN MORTGAGE CORPORATION

Defendants.

))))))))))

)))))


[Judge]

CLASS ACTION


PLAINTIFFS FIRST REQUEST FOR PRODUCTION

OF DOCUMENTS DIRECTED TO DEFENDANT

STANDARD MORTGAGE CORPORATION OF GEORGIA

AND NOW come the Plaintiffs, [First Plaintiff] and [Second Plaintiff], on behalf

of themselves and all others similarly situated, [Plaintiffs], by their counsel, [Attorney forPlaintiffs], and pursuant to Fed R.Civ.P 34, make this their First Request For Production OfDocuments directed to Defendant Standard Mortgage Corporation of Georgia (Standard).Defendant is requested to produce for inspection and copying at the offices of [Attorney forPlaintiffs and Attorneys office address] within thirty (30) days, documents described below,unless the parties mutually agree to an alternate date.

I. DEFINITIONS

1. The term person(s) means all entities, and, without limiting thegenerality of the foregoing, includes natural persons, joint owners, associations, companies,

partnerships, joint ventures, corporations, trusts and estates.

2. The term document(s) means all written, printed, recorded or graphicmatter, photographic matter or sound reproductions, video tapes and/or films, however producedor reproduced, pertaining in any manner to the subject matter indicated, including computertapes, discs, or other electronically stored data.


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3. The terms Defendant, Standard, you and your refer to StandardMortgage Corporation of Georgia and all agents, employees, officers, and other representativesacting on its behalf.

4. The term South View refers to South View Savings and LoanAssociation and all agents, employees, officers and other representatives acting on its behalf.

5. The term Community Savings refers to Community SavingsAssociation and all agents, employees, officers and other representatives acting on its behalf.

6. The term Three Rivers Bank refers to Three Rivers Bank & TrustCompany and all agents, employees, officers and other representatives acting on its behalf.

7. The term Freddie Mac refers to Federal Home Loan MortgageCorporation and all agents, employees, officers and other representatives acting on its behalf.

8. The terms mortgage and mortgages refer to residential mortgages.

9. The term annual bills refers to the aggregate annual cost of all taxes,insurance, and other collateral-related bills that are paid by the mortgagee or its servicer onbehalf of the mortgagor.

10. The term monthly bill payments refers to the payments that mortgagorsare required to make monthly to the mortgagee or its servicer to cover the annual bills.

11. The terms capitalization and capitalization method refer to the practice of applying mortgagors monthly bill payments to reduce their outstanding mortgageloan balances until their annual bills become due.

12. The terms escrow and escrow account refer to the accounts into whichmortgagors monthly bill payments are placed.

13. The term escrow method refers to the practice of placing monthly billpayments into escrow accounts.

14. The terms and and or shall be interpreted conjunctively anddisjunctively, to give the interrogatories the broadest interpretation.

15. The singular shall include the plural, and the plural shall include thesingular.

II. INSTRUCTIONS

1. In responding to these Requests for Production of Documents, it isrequested that Standard furnish all information in its possession or that of its attorneys and allother persons acting on behalf of Standard, and not merely such information within the personalknowledge of the person(s) responding to these Requests for Production of Documents.Information supplied in response to these Requests for Production of Documents shall reflect all


30/94

information available to Standard and/or counsel for Standard. The Requests for Production ofDocuments that follow are considered to be continuing to the extent permitted by Pa. R. Civ. P.4009, and Standard is requested to provide, by way of supplementary answers and responses,such additional information as it or any other person acting on its behalf may hereafter obtainwhich will augment or otherwise modify its responses now given to these Requests for

Production of Documents.

2. Do not re-produce documents that have already been produced in responseto earlier requests.

3. When a request seeks documents, by type, produce a copy of eachresponsive form document.

4. Unless a request states otherwise, it seeks all documents over which youhave possession or control that are related to or originated from South View, Community, ThreeRivers Bank, Freddie Mac, and/or Standard or any other servicer for South View, Community,Three Rivers Bank, or Freddie Mac.

5. Whenever you remove a document or group of documents from a filefolder, binder, file drawer, file box, notebook, or other cover or container, please attach a copy ofthe label of each cover or other container to the document or group of documents.

6. If any of the Requests for Production of Documents are deemed to call forthe production of any privileged materials and a privilege is asserted, a list is to be furnishedidentifying each document so withheld together with the following information:

(a) the reason for withholding;

(b) a statement of facts constituting the basis for any claim ofprivilege, work product or other ground of non-disclosure; and

(c) a brief description of the document, including:

(1) the date of the document;

(2) the name(s) of its author(s), or preparer(s) and anidentification by employment and title of each such person;

(3) the names of each person who was sent or has had accessto, or custody of the documents, together with an identifica-

tion of each such person;

(4) the paragraph of the Requests for Production of Documentsto which the document relates; and

(5) in the case of any document relating in any way to an oralcommunication, identification of such oral communication.


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7. Documents that are produced are not to include redactions unless a clearprivilege exists. If a document is redacted, you must follow the procedure defined in Instruction No. 5. Further, to ensure that the context of relevant information may be clearly understood,purportedly non-relevant portions of a document are not to be redacted.

8. If any documents requested herein have been lost or destroyed, thedocuments so lost or destroyed shall be identified by author, date and subject matter. For eachlost or destroyed document, state the last known location of the document, the last known personto have custody, care or control of the document, and the circumstances under which thedocument was lost or destroyed.

9. If any of the following requests comprise documents which you contendcontain confidential, business, trade secret or proprietary information, you shall not withholdsuch documents on the grounds of confidentiality but shall forthwith advise all parties to thislitigation of the confidential nature of such material and request all parties to stipulate to theentry of an appropriate order preserving such confidentiality.

IV. DOCUMENT REQUESTS

1. All documents that relate to your purchase of the [Plaintiffs] mortgage.

2. All documents that evidence what other mortgages you purchased fromCommunity.

3. All documents that you received or sent relating to the [Plaintiffs]mortgage.

4. All documents, by type, that you sent or received on a regular periodic

basis (weekly, monthly, annually, etc.) relating to the [Plaintiffs] mortgage and/or any othermortgages you purchased from Community.

5. All documents, including service guidelines, handbooks or other manuals,which evidence how you protected your security interest as a mortgagee.

6. All documents that relate to [First Plaintiff] and/or [Second Plaintiff],including all documents you have that contain one or both of their names.

7. All documents that relate to or constitute a file maintained by you withrespect to the mortgage and/or note signed by the [First and Second Plaintiffs], including, but notlimited to, any account statements, correspondence, and other information with respect to the

[First and Second Plaintiffs] mortgage and/or loan.

8. Documents evidencing the application of each payment the [First andSecond Plaintiffs] have made on their outstanding debt.

9. Documents evidencing each assessment of interest and/or other charges onthe [First and Second Plaintiffs] loan account.


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10. Documents evidencing the [First and Second Plaintiffs] monthlypayments for taxes, insurance, and/or other bills related to the collateral property (monthly billpayments).

11. Documents evidencing all calculations of the [First and Second Plaintiffs]monthly bill payments.

12. Documents identifying all formulas and/or calculations used to determinethe amount of the [First and Second Plaintiffs] monthly bill payments.

13. Documents identifying the data used to determine the amount of the [Firstand Second Plaintiffs] monthly bill payments.

14. Documents evidencing each application of the [First and SecondPlaintiffs] monthly bill payments to their loan account.

15. Documents evidencing each application of the [First and Second

Plaintiffs] monthly bill payments to their escrow account.

16. Documents identifying the escrow account(s) that have held the [First andSecond Plaintiffs] monthly bill payments.

17. Documents identifying the current balances of all escrow accounts thathave held the [First and Second Plaintiffs] monthly bill payments.

18. Documents evidencing each addition of charges to the [First and SecondPlaintiffs] loan account to pay for taxes, insurance, and/or other charges.

19. All documents related to the assessment of interest on the [First andSecond Plaintiffs] loan account on the first of the month, although the charges on which interestwas assessed were posted to the account later in the month.

20. All documents related to Communitys payments to the [First and SecondPlaintiffs] of interest on money held in escrow, including documents held by Standard and anyother servicer.

21. All documents related to and leading up to South Views decision tochange from the capitalization method to the escrow method, including interalia, all reports,studies, memoranda, organizational minutes, files and notes discussing this issue.

22. All documents related to South Views evaluation of the capitalizationmethod, including interalia, all reports, studies, memoranda, organizational minutes, files andnotes discussing this issue.

23. All documents related to South Views evaluation of the escrow methodprior to changing from the capitalization method to the escrow method, including interalia, allreports, studies, memoranda, organizational minutes, files and notes discussing this issue.


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24. All documents related to South Views implementation of the escrowmethod, including interalia, all reports, studies, memoranda, organizational minutes, files andnotes discussing this issue.

25. All documents related to South Views evaluation of the escrow methodsubsequent to changing from the capitalization method to the escrow method, including interalia, all reports, studies, memoranda, organizational minutes, files and notes discussing thisissue.

26. All documents related to South Views comparison and/or analysis of thecapitalization method and the escrow method, including inter alia, all reports, studies,memoranda, organizational minutes, files, and notes discussing this issue.

27. All documents reflecting any relationship between South Views decisionto change from the capitalization method to the escrow method and its sale to or merger withCommunity.

28. Documents identifying the date South View began to evaluate changing itsmethod from the capitalization method to the escrow method.

29. Documents identifying the date on which South View made its decision toimplement the escrow method.

30. Documents identifying the date on which South View began to implementthe escrow method.

31. Documents identifying the date on which South View began to evaluatethe possibility of merger with or sale to Community.

32. Documents identifying the date on which when South View made thedecision to merge with or sell to Community.

33. Documents identifying the date on which South Views merger withand/or sale to Community became final.

34. All documents, by type, that South View provided to mortgagors inconjunction with its change from the capitalization method to the escrow method.

35. All documents, by type, that South View provided to mortgagorsaddressing its sale to or merger with Community.

36. All documents, by type, that Community provided to mortgagorsaddressing its purchase of or merger with South View.

37. All documents, by type, that any servicer provided to mortgagorsaddressing South Views sale to or merger with Community.


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38. Documents identifying all mortgagors who made one or more monthly bill payments to South View or its servicer during the twelve months before and one or moremonthly bill payments to South View during the twelve months after South View implementedthe escrow method.

39. The files for twenty mortgagors, chosen randomly, whose mortgages wereowned by South View and who made one or more monthly bill payments to South View or itsservicer both before and after South View implemented the escrow method.

40. Documents identifying all past and/or present formulas, calculations,and/or procedures used to determine the amount of mortgagors monthly bill payments.

41. All documents, including reports, studies, memoranda, organizationalminutes, files and notes addressing past and present procedures, calculations, and/or formulasused to determine the amount of annual bills.

42. Documents identifying all types of standardized data used to determine the

amount of mortgagors monthly bill payments.

43. Documents identifying all types of standardized data used to determine theamount of mortgagors annual bills.

44. Documents identifying past and present formulas, calculations, and/or procedures used as a cross check to determine if monthly bill payments charged to themortgagors would be sufficient to cover their annual bill payments.

45. All documents, by type, that are or have been used to notify mortgagorsthat their monthly bill payments are insufficient.

46. All documents identifying past and present policies and procedures used toidentify mortgagors whose monthly bill payments had been insufficient to pay off their annualbills.

47. All documents identifying past and present policies and procedures usedfor notifying mortgagors that their monthly bill payments were insufficient to pay off themortgage loan as scheduled.

48. All documents identifying past and present policies and procedures foridentifying mortgagors whose loans are or were not being amortized as scheduled, as a result ofthe addition of charges to their unpaid mortgage loans.

49. All documents identifying past, present policies and procedures fornotifying mortgagors whose monthly bill payments were insufficient that the remainder due hasbeen or will be added to their unpaid, outstanding mortgage loans.

50. All documents, by type, used to notify mortgagors whose monthly bill payments were insufficient that the remainder due has been or will be added to their unpaid,outstanding mortgage loans.


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51. All documents, by type, used to notify mortgagors that, because chargeswere added to their mortgage loans, their unpaid mortgage loans were not being amortized asscheduled.

52. All documents, including reports, studies, memoranda, organizationalminutes, files and notes addressing the addition of charges to mortgage loans to pay annual bills.

53. Documents identifying all mortgagors whose loans were increased, one ormore times, to pay the difference between the monthly bill payments and/or the actual annual billpayment.

54. Files for twenty mortgagors whose mortgages are or have been owned byCommunity and whose mortgage loans were increased, at least once, to pay the differencebetween their accumulated monthly bill payments and their actual annual bills.

55. All documents identifying past and present policies and procedures fordetermining the date on which interest should begin to accrue on charges added to mortgage

loans.

56. All documents that evidence the practice and policy of accruing interestfrom the first of the month for all charges made to a mortgage loan during the month, even whena charge is made after the first of the month.

57. All documents identifying changes in the policies and procedures relatedto the date or day of the month on which interest should begin to accrue on charges added tomortgage loans.

58. All documents, by type, used to notify mortgagors that interest on charges

to their loans began or will begin to accrue on the first of the month in which the charges weremade, even if the charges were made after the first of the month.

59. All documents, including reports, studies, memoranda, organizationalminutes, files and notes addressing past and present policies and procedures related to the date orday of the month on which interest will begin to accrue on charges to a mortgage loan.

60. All documents, including reports, studies, memoranda, organizationalminutes, files and notes addressing changes or proposed changes in the policies and proceduresrelated to the date or day of the month on which interest will begin to accrue on charges to amortgage loan.

61. All documents, including reports, studies, memoranda, organizationalminutes, files and notes addressing the effect(s) that accruing interest from the first of the monthon charges made after the first of the month has on the cost of the mortgage loan to themortgagor, the amortization of the loan, and/or the income obtained from the loan by the lender(South View, Community, or Freddie Mac).

62. Documents identifying all mortgagors whose loan accounts have beenassessed interest on the first of the month for charges made after the first of the month.


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63. The files of ten mortgagors, chosen randomly, whose mortgages are orhave been owned by Community and who have been charged interest on the first of the monthfor charges made after the first of the month.

64. All documents, including form documents by type, relating toCommunitys past and present agreements to pay interest on mortgagors escrow accounts.

65. All documents reflecting the dates on which Community or its servicer(s)paid interest on mortgagors escrow accounts.

66. All documents and other communications between Community andStandard or any other servicer with respect to the payment of interest on mortgagors escrowaccounts.

67. All reports, studies, memoranda, organizational minutes, files, notes, andother communications with respect to the payment of interest on Communitys mortgagorsescrow accounts.

68. All documents, by type, that Community, Standard, or any other servicermailed to Communitys mortgagors to notify them that they would receive interest on moneyheld in escrow accounts.

69. All documents, by type, that Community, Standard, or any other servicermailed to its mortgagors in conjunction with the payment of interest on money held in escrowaccounts.

70. All documents and other communications between Community andStandard or any other servicer with respect to the payment of interest that accrued in 1995 on

money held in escrow accounts.

71. All reports, studies, memoranda, organizational minutes, files, notes, andother communications with respect to the payment of interest that accrued in 1995 on moneyheld in escrow accounts.

72. Documents identifying each Community mortgagor who, at any time afterStandard began servicing Communitys mortgages in 1994, earned interest on money held inescrow.

73. All documents identifying the date(s) on which each of the mortgagorsidentified above has been credited for interest on money held in escrow.

74. Files for five mortgagors, chosen at random, who were sent CommunitysNovember 1984 agreement to pay interest on escrow accounts and who did not receive interestthat accrued on their escrow accounts in 1995 until on or about March of 1996.

75. Documents identifying all mortgagors whose mortgages were owned byCommunity and thereafter purchased in whole by Freddie Mac.


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76. All correspondence and other documents, by type, sent to mortgagorswhose mortgages were purchased from Community in whole by Freddie Mac.

77. All correspondence and other documents, by type, sent to mortgagorswhose mortgages were purchased from Community in whole by Freddie Mac, which identifiedFreddie Mac as the owner of the mortgages.

78. All correspondence and other documents, by type, sent to mortgagorswhose mortgages were purchased from Community in whole by Freddie Mac, which did notidentify Freddie Mac as the owner of their mortgages.

79. All documents identifying criteria used to determine which mortgagesFreddie Mac would purchase in whole from Community in 1987.

80. All documents identifying criteria used to determine which mortgagesCommunity would sell in whole to Freddie Mac in 1987.

81. The files for twenty mortgagor files, chosen at random, whose mortgagesFreddie Mac purchased in whole from Community during 1987.

82. All documents, by type, that Community provided to mortgagorsaddressing its sale(s) of mortgages to Freddie Mac.

83. All documents, by type, that Freddie Mac provided to mortgagorsaddressing its purchase(s) of mortgages from Community.

84. All documents, by type, that any servicer provided to mortgagorsaddressing Freddie Macs purchase(s) of mortgages from Community.

85. All documents reflecting communication between South View,Community, Three Rivers Bank or Freddie Mac and the [First and Second Plaintiffs].

86. All documents reflecting communications between Standard or any otherservicer for South View, Community, Three Rivers Bank, and/or Freddie Mac relating to the[First and Second Plaintiffs] mortgage.

87. All documents reflecting communications between the [First and SecondPlaintiffs] to South View, Communi