Thread: Boulder Creek family bought worthless second mortgage

Clear Case of buyer beware...crooks come from many places....




Boulder Creek family bought worthless second mortgage from Wells Fargo at foreclosure auction
By JONDI GUMZ
Posted: 07/22/2010 01:30:01 AM PDT

Click photo to enlarge
... (A nearly $100,000 payment landed Hayley Strand, her fiance Bryan Janbay and her parents...)

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BOULDER CREEK -- Roberta and Randall Strand thought they were getting a great deal on a foreclosure and helping their daughter and future son-in-law become homeowners. Instead they are holding a worthless second mortgage.

The home they bought for just under $98,000 and fixed up for $25,000 is scheduled for a foreclosure auction this afternoon to satisfy a debt of more than $529,000.

They offered lender Wells Fargo $75,000, but it was to no avail.

Wells Fargo spokeswoman Michele Ashley issued a statement saying, "We believe the foreclosure auction of the property on which the Strand family bid was done correctly, and are confident the legal resolution to this matter will bear that out. Currently, Wells Fargo has presented the family with options that can help them through this matter."

The Strands saw a newspaper notice last fall about the home, which is a mile from theirs, slated for a foreclosure auction. The unpaid debt was listed as $97,604.

Nestled under the redwoods on Cypress Trees Lane, the place needed work but their daughter, Hayley, 24, and her fiance, Bryan Janbay, 28, were willing to put in the effort.

Roberta looked up the property records. She saw there were two mortgages, a first and a second, recorded on the same date with the same lender. She figured the lender was auctioning the first and that the second mortgage would be wiped out.

"The price was right," her husband said.

They took out a mortgage
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on their own home to make their offer. At the auction on the steps of the county Governmental Center in November, they were the only bidders.

The house had been stripped, and they spent $25,000 on improvements -- windows, paint, carpet, lighting and appliances.

In January, before Hayley and Bryan could take out a mortgage to pay them back, a notice arrived from Wachovia Bank, saying the previous owners owed $529,259 on their loan.

Roberta thought it was a mistake.

"I tried speaking to someone at Wachovia, but no one would speak to me because my name was not on the loan," she said.

She sent certified letters to Wachovia and didn't hear back until April, when a foreclosure sale notice was posted on the property.

"Rather than foreclose on both loans at the same time, Wachovia chose to foreclose, market and sell the worthless junior lien, purporting it to be the real property, which is what we purchased," she said.

The family sued Wells Fargo, which acquired Wachovia, and Cal-Western Reconveyance, which posted legal notices of the sale, claiming deceit, fraud and wrongful foreclosure. They want their money back.

The Strands' attorney, Steve Vondran of Newport Beach, argued that "Wells Fargo and Cal-Western have set up a system that allows them to mutually profit off the sale of worthless second mortgages."

Superior Court Judge Tim Volkmann granted a temporary restraining order halting the May 7 sale, then denied a motion for a preliminary injunction, saying the plaintiffs had not established a reasonable probability of success.

This allows the sale to occur today as scheduled.

"They relied on their own mistaken beliefs and lack of diligence," Martin McGuinn, Cal-Western's attorney, noted in his written arguments. "Bidding at a foreclosure sale is a highly speculative endeavor."

He pointed out the plaintiffs admitted they knew Wells Fargo had two deeds of trust on the property and "decided on their own what interpretation to place on that information" without consulting Cal-Western.

He explained why Cal-Western's sale notices did not say whether the auction involved the first or second lien: It is not required.

He cited the case of Ostayan v. Serrano Reconveyance in 2000. A buyer wanted to take back his bid, saying he was unaware the deed being foreclosed was the second instead of the first. The buyer lost the case.

The Strands' attorney contends the Ostayan case should not apply, noting that the auctioneer told bidders in that case about a senior lien on the property.

Auctioneer Liese Varenkamp, in written testimony, said she has conducted 500 foreclosure sales and never provided information about the priority of liens being sold. When she says the sale is "as is," that means the bidder must do his own investigation, she said.

She said she congratulated the Strands as "a routine courtesy."

Real estate attorney Pamela Simmons of Soquel said diligence is essential for foreclosure bidders.

"What happened to these folks should be a warning to anyone considering purchasing property at the foreclosure auction to be certain that they know what loans and other liens are secured by the property and what they are purchasing before the auction takes place," she said. "While it is more common for the first deed of trust holder to foreclose, a junior lien holder can choose to foreclose, and many do."




Kathyet
http://www.santacruzsentinel.com/localnews/ci_15573894

It is an unfair deceitful under handed stratagem to defraud by the lenders. It would have to have a disclosure of what the offer was if it was only for a second mortgage. I can't imagine a court not taking a really hard look at the way they presented the offer. But...stranger things have happened. Take it to the judge.

Originally Posted by hardlineconstitutionalist

It is an unfair deceitful under handed stratagem to defraud by the lenders. It would have to have a disclosure of what the offer was if it was only for a second mortgage. I can't imagine a court not taking a really hard look at the way they presented the offer. But...stranger things have happened. Take it to the judge.

Ya take it to the judge and the way things are going in that area ..that won't get you any where either...


Kathyet

Originally Posted by kathyet

Originally Posted by hardlineconstitutionalist

It is an unfair deceitful under handed stratagem to defraud by the lenders. It would have to have a disclosure of what the offer was if it was only for a second mortgage. I can't imagine a court not taking a really hard look at the way they presented the offer. But...stranger things have happened. Take it to the judge.

Ya take it to the judge and the way things are going in that area ..that won't get you any where either...


Kathyet

Sad...but very true.