Posted on 08/24/2007 8:31:36 AM PDT by SmithL
"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.
Amalia Rios, left, and Judy Murillo, right, talk about her home mortgage troubles at the dining room table in Murillo's home in Antioch, Calif., on Wednesday July 18, 2007. Photo for story on two families who say they were misled by a broker into signing a mortgage without knowing what it really said because they speak limited English.
They’re suing because THEY don’t understand the language.
1. Speak English.
2. Quit buying houses and moving everybody in your family into them. You’e killing our neighborhoods and property values.
Kind'a like democrat politicians, eh Mikey?
Please tell me why I should synpathize with low income people who want a $450,000 home. I live in a $10,000 mobile home.
I though U.S. citizens were supposed to all know the English language. Am I missing something here?
I don’t know maybe it’s just me but several things just strike me as odd about this whole thing. First they have been in the house for about two years and they already have a second mortgage. What’s up with that? Second it took three people to qualify for this home? Once again I scratch my head in wonder. Nobody held a gun to these peoples heads and told them to sign the papers. Clearly they couldn’t afford the home in the first place and are now looking for an out and of course a lawyer is waiting in the wings to take the case. Why am I not surprised.
Kirbvy
Probably a legal resident, but not a citizen (hopefully).
Who buys a house without hiring a lawyer?
Kirbvy = Kirby
Geez I can’t even spell my own name.
Any sane court would throw this case into the street and sanction counsel for filing it.
Another forclosure in the making.
An excellent way to keep people in virtual shackles, deny them full participation in the economy and permanently dependent on government— is to encourage them not to bother to learn fluent english.
The moral is don’t lend to Hispanics.
If they can’t speak English, no loan.
Actually in California that would be considered border line low income housing, especially being that close to the Bay Area. It's all out of whack.
They had it planned from the getgo.
Get creative to qualify and then blame the fact that they can’t pay the loan back on the FACT they don’t want to learn English.
Stupid in any language. $2,800 on a $4,800 take home pay? Even if the rate was fixed that would be an incredible amount of money.
If I were going to Mexico to buy some property, there is no way I would go in without my own representative (probably a lawyer) who spoke English and Spanish.
If YOU don’t understand the loan documents, it’s YOUR responsibility to find a translator who can read them to you BEFORE you sign.
The only question that is relevant is how many “sane” courts are left in this nation. The price for legislating from the courts is a loss of justice from the courts.
“Despite those positives, they ended up with an adjustable-rate mortgage
that rose from a $2,800 monthly payment to $3,500.”
They got greedy.
They snapped up a deal that any rational (non-greedy) person would
have said “that deal very likely go sour when the rate readjusts upward”.
Boo-freakin’-hoo.
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