FT. MYERS, Fla.-A federal judge agreed to NCUA's request to strike a jury trial in a suit where the regulator is seeking to foreclose on some two dozen borrowers from one of three credit unions caught in ill-fated Florida real estate speculation.
The judge ruled that the borrowers, members of the failed Huron River Area FCU, waived the right to a jury trial when they bought into the speculation, part of a "get-rich-quick" scheme known as Millionaire University.
Huron River Area FCU, a one-time $360-million Michigan CU, was one of three credit union failures, along with Colorado's Norlarco CU and New Horizons Community FCU. Huron River Area, which cost NCUA $40 million in losses, and Norlarco, which cost $10 million, are among the biggest credit union failures ever.
The failures left NCUA holdings hundreds of millions of dollars of mortgages in the two Florida developments and working through the legal process to foreclose on millions of dollars of other loans.
In the ruling, the U.S. District Court for the Middle District of Florida rejected the borrowers' claims that the waiver of a jury trial they signed as part of the loan agreement was not applicable in a case of alleged fraud; and that NCUA, which has assumed all rights to the failed credit union as its liquidating agent, has not waived its ability to enforce the jury trial. The case, which will now be decided by the judge, is set for Nov. 7.
