We are happy to report that the walls are slowly tumbling down on Llano Financing and the Ganter brothers (Chris & Ben). If we sound biased it’s only because we are. When any entity like Llano is on the losing end of close to 100% of the cases in both state and federal court, it becomes very clear quickly to both the judiciary and the general public that something fishy is going on.
Since our last update, here are some new pieces of information we have uncovered. We think you will find this very interesting and we hope you circulate this so anyone who ends up looking down the barrel of a gun held by Llano realizes the gun is either empty or shooting blanks.
1. It is rumored the “review” appraiser whose work has been cited in numerous Llano cases is under investigation by one or more groups. Oh-oh, it looks like somebody may have some explaining to do, especially since in a deposition given by Ben Ganter he says this appraiser did hundreds of “review” appraisals.
2. We’ve seen a copy of one of the “assignments” from an Impac Mortgage Holdings affiliate to a Ganter entity called Savant. Impac (www.impaccompanies.com) is a publicly traded company (symbol IMH) and it originates loans under the CashCall Mortgage umbrella. Most interesting is that the document we saw where Impac seems to assign rights to the appraisal (whatever that is), also seems to indicate Impac reserves an interest in the litigation proceeds and has the right to approve certain litigation costs. If that is true, Impac may be a necessary party to the litigation. We also wonder if Impac ever bothered to disclose this activity to regulators or its shareholders.
3. In an attempt to give Impac a chance to explain its actions, we sent a number of written questions about Impac’s involvement with Llano and Savant to Ron Morrison, General Counsel for Impac. Mr. Morrison stated he was out of the country and has not replied to our questions as of the time this is being written.
4. Now for some good news - In a number of recent decisions announced by courts in both Florida and Nevada, motions to dismiss and/or for summary judgment based on the statute of limitations having run have been upheld and the cases dismissed.
5. One poor attorney in Florida who took Llano on as a client has been ordered to appear in front of a federal judge to explain why his client’s checks for court costs and fees keep bouncing. Apparently his fee agreement with Llano called for Llano to pay the costs directly. In his reply to the court’s order to appear, the attorney states that “…in all of my career I have never been faced with such a situation. This is literally a nightmare for me and I am literally shaking as I write this reply”. We don’t have a crystal ball, but we’d be willing to bet that this attorney will soon be withdrawing as counsel in these cases. Oddly, this seems to be a consistent theme in many of the cases filed by the various Ganter entities over the past several years – lawsuit filed, costs and fees not paid, counsel withdraws.
6. We’ve heard through the grapevine that one or more federal agencies are reviewing the activities of Llano and the Ganters. Wouldn’t it be nice if the feds eventually decided to open a formal investigation into the game the Ganters play?
7. Speaking of federal agencies, in many of the cases filed in state court Llano’s complaint seems to establish diversity of citizenship and a sufficiently high enough amount in controversy to trigger federal jurisdiction. During a recent call with an attorney handling several Llano cases filed in state court this attorney indicated he was considering filing to remove all of the cases to federal court and to seek to add Impac as an additional, necessary party plaintiff. We think this is an excellent idea because getting a federal judge to see and hear what Llano is up to (and to look into Impac’s role), the greater the odds that we see massive dismissals of many of the pending cases.
8. We are pleased that several E&O carriers are now cooperating and sharing pleadings, information, and strategy. These carriers have apparently also decided not to pay to settle the Llano cases and indicated they are willing to go to trial before they pay Llano anything. Oops…sorry Llano, but it looks like the chances of reaching settlements based on the nuisance value of your cases just disappeared.
9. Not surprisingly, we learned that one of the attorneys handling a large batch of cases for Llano was himself a named defendant in an earlier consumer/mortgage fraud lawsuit filed by the states of Connecticut and Florida. We spoke to members of the Attorney General’s office for both states and they seemed very interested in the Llano situation.
10. Finally, in attempting to decipher the ownership of Llano, we learned that various entities owned or controlled by Walt A. Collins, Michael F. Crosson, and Casey Collins are the owner of the member interests or are the limited partners in Llano Financing Group LLC. The reason we are not sure which is which is that Llano Financing Group LLC has been identified in its own pleadings as both a Texas limited liability company and a Texas limited partnership. It seems even the attorneys hired by Llano don’t really know what type of entity Llano is. Interestingly, we did discover that Collins and Crosson appear to own or work for a collection firm called Collins Asset Group.
Stay tuned for more. We believe that shining a light on Llano and the people behind its activities are the best way to put an end to this latest wave of frivolous litigation against appraisers.
Author: Brian L. Trotier, JD, is the Executive Vice President and Chief Operating Officer of FREA and a former practicing attorney with more than 30 years experience in real estate and risk management.