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Class status for Fannie suit is denied

August 11, 2009|Times Wire Reports

A federal judge denied a request by owners of government-insured housing to sue as a group for as much as $7 billion over Fannie Mae's use of escrow funds.

Fannie Mae, which is operating under federal conservatorship, was sued in 2004 by three property owners who alleged that the home lender illegally kept money earned on escrow accounts. The plaintiffs' bid for class-action status to represent about 4,000 borrowers with home loans owned or guaranteed by Fannie Mae had been pending since 2006.

U.S. District Judge David Folsom in Texarkana, Texas, said in a two-sentence court filing that he had denied class certification and was halting the case while plaintiffs appealed his decision.

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