A. Barry Cappello
Cappello & Noël
Rumbaugh Public Relations
FOR IMMEDIATE RELEASE
July 13, 2007
ULTIMATERATE.COM, WEST COAST REALTY & FREMONT
INVESTMENT & LOAN SUED FOR FINANCIAL ELDER ABUSE
SANTA MARIA, CALIF.—A 74-year-old Lompoc widow is suing Orange County’s West Coast Realty & Mortgage and its subsidiary, Ultimaterate.com, as well as Orange County-based Fremont Investment & Loan for financial elder abuse. The suit, filed this week in Santa Maria, alleges that the companies and its loan officers took advantage of the elderly plaintiff, resulting in the foreclosure and loss of her home (Janet Ur vs. Freemont Investment & Loan, Ultimaterate.com, West Coast Realty & Mortgage, Sam Malouf, et. al, County of Santa Barbara, July 11, 2007).
Janet Ur had lived in her Lompoc home for almost 40 years where she raised her children and planned to live the rest of her life. During summer 2006, she needed cash to pay debts.
Ur contacted West Coast Realty & Mortgage and Ultimaterate.com. Both function as loan brokers. Sam Malouf was a loan broker for Ultimaterate.com. He agreed on behalf of the companies to take on the responsibility to find Ur an appropriate refinance loan for her income level. Her income of no more than $3,000 a month came from a part time job, Social Security and other governmental benefits she received as a result of her husband’s death from cancer in 1990.
“Malouf prepared a loan application and had Janet sign it,” says A. Barry Cappello, managing partner with Santa Barbara’s Cappello & Noël and one of the attorneys who represents Ur. “He obtained some of the information for the application during a telephone conversation with Janet. He simply made up other information to ensure Janet would qualify for a loan and he would receive his commission.”
One of the most glaring inaccuracies on the application, according to the complaint, was her stated monthly income—about $6,000 versus the actual maximum of $3,000. “The brokers knew this information was false but included it on the application anyway,” says Cappello. “They had Janet sign the falsified papers, knowing she was elderly, extremely frail and was not financially sophisticated enough to understand the loan documents and process on her own. She relied on them to help her.”
The loan application was submitted to Fremont Investment & Loan. Attached was documentation showing Ur’s monthly income was no more than $3,000. Freemont did not question Ur about the discrepancy, instead, it underwrote a $425,000 adjustable rate mortgage (ARM) based on the $6,000 monthly income stated on the loan application. Her ARM interest rate began at 8.25 percent for the first 12 months with a more than $2,900 monthly mortgage payment. The terms of the loan allowed the rate to rise to 11 percent, which would bring Ur’s payments to almost $5,000 a month.
“We believe Fremont planned to foreclose on the property and wrongfully take it from the Janet,” says Cappello. “Janet received her first mortgage payment invoice and it exceeded her monthly income. She called Malouf and told him she could not afford such a high monthly payment. He told her that the loan brokers would pay the first monthly charges and fix the problem. No other action was taken by the defendants.”
Soon after, Fremont sued Ur and held a foreclosure auction on her home. Fremont purchased the property at auction. It then sued Ur again to evict her.
“When Janet approached the defendants and they agreed to help her find a suitable loan, they accepted a position of trust,” says Cappello. “Anyone who talks with Janet will quickly realize that all financial matters must be explained clearly to her so she can understand and that she is physically and emotionally frail. All the named defendants knew that she lacked sufficient income to make the monthly mortgage payments on a $425,000 loan. Since they knew she wouldn’t be able to make the loan payments, they also knew she would default and lose her home. Instead of being concerned for Ur’s financial well being, the defendants were only concerned with their own financial interests. It’s financial elder abuse at its worst.”