As mortgage banking has become a nationwide business, mortgage bankers have increasingly struggled to ensure that their origination and servicing practices comply with local law.

The mortgage banking community was therefore understandably dismayed when a California trial court — with the blessing of an intermediate appellate court — certified nationwide class-action status for a lawsuit involving a mortgage servicer’s alleged failure to comply with California law. The court asserted that the law is applicable even to customers who live in states where the alleged conduct was perfectly lawful.

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