"[P]laintiff was more than 65 years old and lived in a home in Citrus Heights, California that she and her husband had purchased in 1999. Although plaintiff is certified as a notary, she was not employed as such and subsisted on social security benefits of $1,137 per month.
In 2003, plaintiff's husband died from a lengthy illness that “severely strained [plaintiff‟s] financial situation.” That year, plaintiff obtained a loan from Ameriquest in the amount of $144,500 secured by a deed of trust on her home in order to pay off various debts. After paying off the prior mortgage and about $5,000 in loan fees, plaintiff received approximately $18,000 in cash out of the Ameriquest loan.
In June 2004, plaintiff again refinanced her home mortgage, this time with a loan from World Savings in the amount of $153,750. After paying off the Ameriquest loan and loan fees of over $3,500, plaintiff received approximately $5,000 in cash.
In February 2005, plaintiff obtained a loan from New Century Mortgage in the amount of $204,000, secured by a deed of trust on her home. After paying off the World Savings loan and other debts and fees of over $9,000, plaintiff received $5,574 in cash out of the loan proceeds. At the time of this loan, plaintiff's home was appraised at $240,000. Plaintiff‟s initial payments on this new loan were $943.50.
In June 2005, after determining the payments on the New Century loan were more than she could afford, plaintiff entered into a listing agreement for the sale of her home.
On June 7, plaintiff received a call from an employee of California Real Estate Investments & Loans, Inc. (CREIL) about refinancing her home loan. At the time, plaintiff told the caller she was on a fixed income of $1,137 per month and said she was only interested in refinancing if she could reduce her payments while trying to sell the home. The caller said this could be done and CREIL would help plaintiff sell her home.
On July 1, 2005, plaintiff met with Samantha Pham, who informed plaintiff she was the owner of CREIL. Plaintiff told Pham she was living on a fixed income, could not afford her current payments, and needed a single payment that included an impound account for taxes and insurance. Pham directed plaintiff to sign some papers to begin the refinancing process and assured plaintiff she could obtain a loan that would reduce plaintiff's financial obligations. Pham also represented to plaintiff that the information in the loan documents was consistent with what plaintiff had earlier told CREIL. Plaintiff signed the loan application based on these assurances.
The loan application materials listed the value of plaintiff's property at $265,000. They also represented plaintiff‟s income as including $4,800 per month as a self-employed notary.
Pham submitted the loan application to Fremont. On July 20, Fremont sent plaintiff documentation listing estimated fees and costs associated with the new loan. This documentation listed total costs and fees of $17,969.32, which included $15,022.50 in broker fees to CREIL.
On July 25, plaintiff again met with Pham, who presented her with a “stack” of loan documents for a loan from Fremont in the amount of $265,000. These documents included revised estimates of fees and costs. Also included with the loan documents was a list of debts to be paid off from the loan proceeds, including a loan from Wells Fargo Bank in the amount of $4,299. The documentation further disclosed a payment of $4,528.80 as a penalty for prepayment of the New Century loan. Pham notarized plaintiff's signature on these documents, for which Pham was paid $300 out of the loan proceeds.
The initial monthly payment on the Fremont loan was $1,916.84, which did not include taxes and insurance. The Fremont loan included a prepayment penalty clause that applied during the first two years of the loan. After payoff of the New Century loan and the costs and fees of the Fremont loan, plaintiff received $31,361.73 in cash out of the loan proceeds.
On the day plaintiff signed the loan documents, Pham deposited $4,500 in plaintiff's bank account and later asked plaintiff for a bank receipt showing the balance in her account. Plaintiff provided the receipt on July 28. On August 2, Pham transferred the $4,500 back out of plaintiff's account.
Pham assured plaintiff she need not worry about the large loan payments, which were well beyond plaintiff's monthly income. Pham told plaintiff she could use the cash she received from the loan proceeds to make the loan payments while Pham helped plaintiff sell her home. However, Pham never assisted plaintiff in selling her home, and plaintiff used up most of the loan proceeds in making the loan payments to Fremont.
During 2006, plaintiff's attempts to sell her home were unavailing, because Fremont refused to consider doing a “short sale” and refused to waive the prepayment penalty on its loan."
There's not a person involved here, in my mind, who wasn't greedy and abusive. Some, of course, more than others -- particularly Pham, whose conduct seems outright criminal. But everyone gleefully went along with the process. In this case and in tens of millions of others.
Before the whole thing, of course, came crashing down. And we all paid for it.
P.S. - The Court of Appeal affirms the grant of summary judgment to Fremont, finding that it did nothing wrong.
