Loan papers lost in translation

Contra Costa Times ^ | 8/24/7 | Barbara E. Hernandez

[SmithL]

Spanish-speaking couple sues, accuses entities involved with mortgage, of negligence, misrepresentation --

ANTIOCH -- When it came time to sign her mortgage documents, Judy Murillo said she heard something in English that made her stop signing. The terms of her loan didn't sound right.

"We weren't supposed to have Mello-Roos," she said, her brow furrowing as she sat at her dining room table.

Although Murillo speaks some English, she is more comfortable with Spanish, the language she and her husband used when communicating with her real estate agent, who was also her loan consultant, and his assistant. She said they had specifically been told by their agent that they wouldn't be part of a Mello-Roos district where homeowners pay a special tax for public improvements and services.

When trying to get confirmation from the title agent, who didn't speak Spanish fluently, she was told to talk to her Realtor for an explanation. She said neither their real estate agent, Francisco Cervantes, nor his assistant were present.

Faced with not signing and possibly losing the $450,000 house in Antioch, she and her husband, Juan, signed the papers.

Now, two years later, the Murillos and others are suing their real estate agent, his assistant and mortgage broker, alleging breach of fiduciary duties, fraud and misrepresentation, negligence and other violations.

They are also suing Wells Fargo, holder of their home-equity line of credit, which acts as their second mortgage, and JP Morgan Chase & Co., which now services their New Century Mortgage Corp. loan, accusing them of negligence and other violations of state and federal laws.

If there had been a law requiring a translated loan summary with the loan terms, percentage rate and fees, the Murillos said they probably would not be struggling to make their mortgage payment.

"What they told us wasn't true," Murillo, 31, said. "I know what is an advantage and what is not an advantage. ... And that's not what I heard and not what they said."

Heidi Li, an attorney for the families, said the real estate boom created some misrepresentation and even fraud, with many of those agents and brokers coming from the same cultural community.

The Murillos are part of the growing number of California home buyers who don't speak fluent English and could be helped by state law ensuring home loan documents with translated summaries disclosing mortgage terms, percentage rates and fees.

That law may not be AB512, a bill amending current contract law requiring home loan documents to be translated into Spanish, Chinese, Tagalog, Vietnamese and Korean if a broker or business negotiates in that language.

The bill, which passed 47-29 in the state Assembly in June, was supposed to include the summary of loan terms, but it was amended in July with the summary deleted. That version may reach the floor of the state Senate by next week, said a representative of Sen. Patricia Wiggins, D-Santa Rosa, whose district encompasses Solano, Napa and Sonoma counties.

Li, also a board member of the California Reinvestment Coalition, a coalition of groups that advocate access to credit on behalf of low-income communities, said that the bill in its current incarnation is too vague.

"As it is now currently drafted, it's going to create greater uncertainty," she said. "We believe it will reduce required disclosure documents to consumers."

The bill, if passed, wouldn't be law until at least January 2009 and not much help to those currently in difficult loans, said Paul Leonard, director of the Oakland-based California office at the Center for Responsible Lending.

"It doesn't do anything retroactively, that's for sure, and it's not clear how effective it will be," he said. "This is the biggest transaction in these people's lives, and they deserve to know the terms."

Cervantes, the Murillos' real estate agent and loan consultant named in the lawsuit, said that he has committed no wrongdoing.

"People think, 'I can buy a property and if things don't go well, I get to blame someone else.' That's the American way," Cervantes, a Realtor with Citywide Properties in San Jose and a loan consultant for First Federal Mortgage Bankers in Gilroy, said. "We explained everything to them. ... The whole process was according to the law."

Thomas Kelly, a spokesman for J.P. Morgan Chase & Co., said: "Chase did not originate the loan. It is simply servicing the loan." Chris Hammond, a spokesman for Wells Fargo, said the company has no record of receiving the complaint.

The Murillos had credit scores of more than 700, and between the couple, and Judy Murillo's sister, Martha Jimenez, the three family members had $4,800 net income per month. Despite those positives, they ended up with an adjustable-rate mortgage that rose from a $2,800 monthly payment to $3,500.

Jimenez, 33, who pays $900 of her $1,600 monthly income toward the mortgage, said she hopes that the lender and her family can work out a deal.

"People get preyed upon by people from their own background," said Sen. Michael Machado, D-Linden, whose district includes parts of San Joaquin and Solano counties. "It's also difficult to counteract. When someone is taken in by someone in their own community, (it's hard to come forward and) say, 'I got duped.'"

Li said the Murillos are not technically in default of their loan, but their adjustable-rate mortgage is being negotiated with J.P. Chase Morgan & Co.

[RC2]

A $450,000.00 home is “Low income housing”? Give me a break here. These people that want to sign contracts need to understand the english language or don’t sign without a lawyer.

[ClaireSolt]

Some people have been saying that for 25 years when $150,000 was a fortune for a slab house in Santa Barbara. What tickles me is when Californians pronounce that everybody follows what they do. Watch what happens as the illegals leave. Ever see a baloon deflate?

[sheana]

The last house we sold in California was a little over 10 yrs ago. When they brought the docs to us to sign there were 5 people (hispanics) named on the title.
I drove by afterwards and there must have been 10 people living in the 1200 sq ft 3 bedroom house.

[andyk]

$2,800 on a $4,800 take home pay?

That was my first thought. More than 50% of your take home on housing? Yikes!

[andyk]

Faced with not signing and possibly losing the $450,000 house in Antioch, she and her husband, Juan, signed the papers.

So, they heard Mello-Roos at the signing, but signed anyway. Now they're claiming fraud?

[Anonymous Rex]

Hey Amalia, it’s your own fault you find yourself in this situation and nobody else’s. Don’t expect the American taxpayers to pick up the dime for your idiocy.

I certainly hope her status has been checked on. Maybe she’s get deported and the case will become a non-issue.

[Anonymous Rex]

She’ll, sheese.

[BobS]

A contract is a contract. After you sign it, you can't whine and complain that you were too ignorant to sign it in the first place.

So they hire a lawyer money hole to prove they are too stupid to sign a contract in the 1st place?

[KirbDog]

“The last house we sold in California was a little over 10 yrs ago. When they brought the docs to us to sign there were 5 people (hispanics) named on the title.
I drove by afterwards and there must have been 10 people living in the 1200 sq ft 3 bedroom house.”

We sold our home in San Diego in 1994 and to this day it is used as a rental. Every time we go back to visit family we drive by and look at the house. Renters never care for a home like owners would.

[BobS]

A contract is a contract. After you sign it, you can't whine and complain that you were too ignorant to sign it in the first place.

So they hire a lawyer money hole to prove they are too stupid to sign a contract in the 1st place?

[ladyjane]

You misunderstood what I said, which was: “Who buys a house without hiring a lawyer?”

One hires a lawyer to buy a house, not after the fact.

[conservative cat]

The last house we sold in California was a little over 10 yrs ago. When they brought the docs to us to sign there were 5 people (hispanics) named on the title. I drove by afterwards and there must have been 10 people living in the 1200 sq ft 3 bedroom house.

My last house sold was similar- only two (Vietnamese) on the title but about 8 or so living there- and most of them are unrelated to each other. It is four bedrooms and 2300 sq. feet but STILL!

[NativeSon]

A contract is a contract. After you sign it, you can't whine and complain that you were too ignorant to sign it in the first place.

"They" may be able to bully small towns, liberal fools and small bussiness but I doubt if the banking industry will take this. Can you imagine everyone that had/has high debt - car, house, credit cards, etc, demanding handouts and free passes from lenders because "they didn't understand"?

I put it like this because if a POS law is passed demanding that banks cater to any language demand, the lawsuits will begin against the contracts up to that time.

[Polybius]

I though U.S. citizens were supposed to all know the English language.

Noah Webster himself would have trouble with the fine print in most consumer contracts today.

Not only are legal "gotchas" written in very obtuse and barely understandable legalese, they are written in barely visible fonts and are often written in all capital letters to make reading more difficult.

In transactions between businesses themselves, the contracts are written in normal fonts with wide spacing with plenty of room to make cross-outs, notes, and changes to the terms.

We, the customers, gets this:

[goldstategop]

No one who can't understand English should get a loan. 'Nuff said.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[woofer]

If I were going to Mexico to buy some property,

You can't buy property in Mexico. You're not a citizen. That's Mexican Federal Law.

[bubbacluck]

I was only commenting on the outrageous home prices here in California. In some parts, a $450K home would be considered a fixer-upper. That’s just a slight exaggeration. Even our humble 3B/2Bath home has tripled in value in 10 years for no apparent reason other than it exists in California. It’s crazy and it will adjust as the market demands.

[BobS]

I know. I was talking about the logic those people used. Big contracts are in legal language that requires a lawyer to explain it all. Why don’t they simply learn English so they can talk with people? I lived in Spain for three years and I learned Spanish so I could talk with Spanish people. That’s simple common sense.

[Haddit]

First of all, I live in Southern California and deal with Hispanics all the time. There are few others. They always have a translator even if it is their own 8 year old kid that learned English in school. Most Hispanics can not read or write in any language, they have their kids write their checks to me. I have had to correct them when they write checks for $3,000 when all I needed was $300. Many of them are filthy rich and own houses that they rent to multiple families and commercial property. Not speaking English has never stopped them. These people are cruel. The restaurant owners I have encountered give lodging to their victims, young waitresses, with their wives knowledge and support.
While I’m on the subject, let me show you how they take over. I live in Los
Angeles. The first thing they did was bus our kids into violent neighborhood schools so that they could send the violent kids into our neighborhood. Non-Hispanics moved out. Then the vacancies were filled with illegal Hispanics. That wasn’t enough, They then took away the apartments that people bought for investments and initiated rent control. People that have lucked out to be in a rent control apartment will stay there until the day they die because they have a locked down rent. The owners sometimes would rather their apartments go vacant than rent at a loss. This was coordinated by Hanoi Jane. Sometimes they, the owner, paint their property black to symbolize their angst at rent control. The apartments advertise “Section 8” (code for rent control) in Spanish. Then the city gives them Welfare, free food at school and free child care while the illegal’s are earning a living at a place that does not pay taxes. Then the city creates a tax on small businesses as if the state and federal are not enough taxes. More citizens move out. They tell business owners that they can’t smoke in their own place of business and more citizens move out. After 2/3 of Americans move out of the city it leaves 1/3 of Hispanic Citizenry and 2/3 of illegal aliens calling the shots and electing Antonio Villaragosa as mayor. Good luck to the rest of you, we, Americans, are a dying breed. By the way, when I went on Yahoo the other day and did a search of “militias”, I found two police officers out in my front yard. What a coincidence. I confronted them, I have nothing to hide. Not even a firearm. Meanwhile, I’ll keep sending my preschooler to a Jewish school because that is the only place I can send my kid that is free of Mexicans.

[wolfcreek]

“Who buys a house without hiring a lawyer?”

We live in Texas and I don’t know of anyone who hires a lawyer to buy a house.

Is that common where you live?