Gomez

INTRODUCTION

Plaintiffs and appellants are 19 individuals who invested and lost money in a Ponzi scheme created by disgraced mortgage broker Kaveh Vahedi. About half of them secured the funds to invest in the Ponzi scheme by taking out mortgage loans from Countrywide Bank, FSB and Countrywide Home Loans, Inc., brokered by Vahedi. Plaintiffs sued defendants and respondents Bank of America, N.A., as successor in interest, Countrywide Bank, FSB, and Countrywide Home Loans, Inc., (collectively, defendants1), alleging that defendants and Vahedi engaged in a “two-prong” conspiracy: assisting Vahedi in his Ponzi scheme and placing plaintiffs into fraudulent mortgage loans they could not afford, resulting in substantial losses once the scheme collapsed and Vahedi ceased covering payments on the unfavorable loans. The trial court twice sustained defendants’ demurrers on multiple grounds, ultimately denying leave to amend as to all claims. Plaintiffs appeal the dismissal of their complaint. We affirm in part and reverse in part.

FACTUAL AND PROCEDURAL HISTORY

I. Factual Allegations

The following facts are alleged in plaintiffs’ first and second amended complaints. Countrywide Home…