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.
>>Noah Webster himself would have trouble with the fine print in most consumer contracts today.<<
Also, some real estate agents do lie about the terms of the loan. For example, they get paid by the lender to get the buyer to sign a contract with an ARM and pre-payment penalty, and they lie about the pre-payment penalty. The buyer moves out of his current residence, and then finds out at the signing that there is a very high pre-payment penalty. The buyer can either sign the papers or spend thousands in moving and storage costs, plus deposits on a temporary residence or rents a hotel room, so the buyer signs and hopes for the best. After 3 years, surprise surprise, home interest rates have gone up, and the buyer could not refinance earlier because of the prepayment penalty.
Ironically, some lenders who thought they would get rich after the rates went up on the ARMs, are going bankrupt because of the defaults. I wonder if this is going to cost taxpayers like the Savings & Loan disaster.
In this article, the buyer is suing the real estate agent for misrepresentation, but I don’t see how they will prove that the agent misrepresented the facts unless there are documents to that effect. More likely, if the agent did misrepresent, he did so verbally and there will be no proof.
I been through three closings in my life and had a lawyer for every one of them. What moron buys a house without one (like you said)
In California we don’t use lawyers for real estate transactions. We supposedly have enough laws in place to protect us.
So if you wanted a lawyer , you couldn’t use one?
Illegals need to GO BACK HOME!
Your problem then estupidos.
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.
What a load of horsecrap ... I hope the judge throws this out.
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.
WTF?? Using equity as a piggy bank and raiding it inside of two years?
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
Bullshit, you live in this country and do business in this country for big mortgages ... LEARN ENGLISH!!.
borders, language, culture....
It’s important.
If you don't understand it, DON'T sign it. It's that easy. If you cannot read it, DON'T sign it.
You are putting at least two years of your salary into that contract. Do NOT sign anything unless you fully understand it.
I infuriated my RE agent and the title companies representative at my closing because I READ every page and asked questions if necessary.
F#$% em ... I got my house and everything I wanted from the deal.
There are already nearly 100 forms that you have to sign to get a mortgage that do nothing but certify that the lender has made you aware of the terms of your mortgage.
Will this be required for any language?
Who’s paying for the translators? (One guess.)
I’d love to be on the jury for this case.
Well me for one! I've bought (and sold) a condo, bought my current house. Later purchased an adjoining lot. Combined the two parcels into one property (I needed the extra land for a mound, septic system). And ,oh yeah, I handled my divorce about thirty five years ago (strict 50%/50% split).
I did all that without hiring a lawyer. The county land office told me they had never seen paperwork as well prepared as mine when I combined the lots. The nice people at the county offices will tell you what you have to file and what needs notarizing so it was pretty much a piece of cake.
Regards,
GtG
PS I'm currently in the process of incorporating a nonprofit to hold some assets for me. Since a corporation is legally an individual it can purchase class III without all the BATF hassle!
I dont think you qualify as a moron.
You can hire a lawyer, but I have bought and sold many homes and never had a problem. Besides not being able to understand the English language, the biggest problem is people buying at the end of the market high with an adjustable loan. You can’t refinance with a 30 year fixed loan if your house has gone down in value. This is why so many people are whinning. Homes are kind of like the stock market with about a 12 year cycle.
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