Legal Question in Real Estate Law in California
A Cancelled Loan that Wouldn't
Borrower signs docs, but faxes cancellation notice to Escrow 6 days prior to recording. Escrow faxes back a document stating loan is cancelled. Wire is returned to lender by title. Borrower NEVER rescinds cancellation, but loan funds.
Come to find out, Escrow Company is broker owned. Broker has loaned borrower money, and put money in borrower's bank account in order to qualify. And broker answers the phone at number listed on 1003 as borrower's employer. In fact, borrower is self employed.
Review of lender closing docs do not match (not close) borrower's copies. and there is more. Worse loan I have seen in my 15 years in mtg industry. Is it wise to present my case to lender and address informally? I want to avoid battling so large a company, and what could the lender or broker be liable for as restitution in the event mtg fraud is proven?
3 Answers from Attorneys
Re: A Cancelled Loan that Wouldn't
If you can prove your claims with clear and convincing evidence, this matter will most likely settle out of court. We would need more information to answer the other questions you have, especially in respect to the damages you have personally incurred herein. For a free phone consultation, contact us directly this week.
Re: A Cancelled Loan that Wouldn't
It appears from your facts that the lender in this transaction has been deceived by the broker and the borrower. First, I would consider disciplinary action against the broker by contacting the DRE.
Second, It is a federal crime to commit fraud in real estate documents, which would be the case here. Hence, you may wish to present this to HUD as well as the FBI for prosecution. Third, the lender would have a right to sue the broker and the borrower for fraud, in which case the measure of damages would be "reliance" damages, that is, damages related to the lender's funding of the loan in reliance on the borrower's lender's fraudulent statements. In addition, punitive damages may be in order. Hopefully, the broker at least has errors and omissions insurance from which to recover these damages. I would be happy to discuss this situation further with you, if you wish.
Re: A Cancelled Loan that Wouldn't
Who you should approach depends on your status; are you the borrower? In the event that mortgage fraud is proven, at a bare minimum, all damages/expenses incurred by party (ies) relying upon the fraudulent conduct is recoverable and there is the possibility of punitive damages against the broker and others responsible for the fraud. In addition, the broker faces potential loss of his/her license.
If you would like a more specific and comprehensive assessment, please contact our office for an in-person consultation.
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