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A San Marcos couple will get a second chance to take Bank of America’s Countrywide lending unit to task over alleged violations of the Truth in Lending Act. Judge Michael M. Anello had originally dismissed a complaint brought by Victor and Belen Balderas in 2009, though the Ninth Circuit Court of Appeals reversed that ruling on Thursday and ordered the case to trial.
The Balderases claim that in 2006 they began the process of a cash-out refinance through Countrywide after receiving a solicitation call from mortgage broker Mor Cazakov, then independent of Bank of America. Soraya Quassim, a “duly authorized agent” of Countrywide, allegedly came to the Balderas residence unannounced and asked them to sign a loan application written in English, a language neither of them were able to read. Three days later, on the night of September 25, Cazakov arrived with a notary public and stack of loan documents, also written entirely in English, again urging them to sign.
When the borrowers asked to reschedule until such time that their daughter, fluent in the documents’ language, could be present to translate for them, Cazakov refused to leave the residence. He remained for over six hours, stating that Countrywide “demanded” their signatures “that night.” Eventually the Balderases caved after midnight and signed the loan package.
Two days later, they attempted to call Cazakov’s office to cancel the loan, but were told it was not possible. The day following that, the third after signing, they attempted to contact Countrywide directly to cancel and were again denied, being told it was “too late.” By law, borrowers on a refinance transaction are allowed a three-day right of rescission, during which they are allowed to cancel a loan without penalty. Their rescission period, however, actually extended through the close of the following day.
The Balderases later learned that the loan application had overstated their annual income by more than $40,000. Also, the notice they received of their right to cancel the loan was incomplete – it did not have the dates filled in notifying them specifically when their rescission rights ended.
Countrywide’s reason for originally seeking to have the case dismissed was their ability to produce documents signed by the borrowers, including the notice of right to cancel with the dates completed. Chief Judge Alex Kozinski, writing for the Ninth Circuit, disagreed, given that the documents actually provided to the borrowers were incomplete they should not have counted as providing adequate delivery of the notice.
“We interpret "deliver" to mean that the consumer must be allowed to keep the notice,” said Kozinski in reversing the lower court’s dismissal. “When you have pizza delivered, you don't sign for it and let the deliveryman take it back to the restaurant. And when a newspaper boy delivers a paper, he doesn't show you the headlines and then return it to the printer.”
The decision to force Bank of America to stand trial comes on the heels of a landmark federal discrimination settlement announcement last week.
A San Marcos couple will get a second chance to take Bank of America’s Countrywide lending unit to task over alleged violations of the Truth in Lending Act. Judge Michael M. Anello had originally dismissed a complaint brought by Victor and Belen Balderas in 2009, though the Ninth Circuit Court of Appeals reversed that ruling on Thursday and ordered the case to trial.
The Balderases claim that in 2006 they began the process of a cash-out refinance through Countrywide after receiving a solicitation call from mortgage broker Mor Cazakov, then independent of Bank of America. Soraya Quassim, a “duly authorized agent” of Countrywide, allegedly came to the Balderas residence unannounced and asked them to sign a loan application written in English, a language neither of them were able to read. Three days later, on the night of September 25, Cazakov arrived with a notary public and stack of loan documents, also written entirely in English, again urging them to sign.
When the borrowers asked to reschedule until such time that their daughter, fluent in the documents’ language, could be present to translate for them, Cazakov refused to leave the residence. He remained for over six hours, stating that Countrywide “demanded” their signatures “that night.” Eventually the Balderases caved after midnight and signed the loan package.
Two days later, they attempted to call Cazakov’s office to cancel the loan, but were told it was not possible. The day following that, the third after signing, they attempted to contact Countrywide directly to cancel and were again denied, being told it was “too late.” By law, borrowers on a refinance transaction are allowed a three-day right of rescission, during which they are allowed to cancel a loan without penalty. Their rescission period, however, actually extended through the close of the following day.
The Balderases later learned that the loan application had overstated their annual income by more than $40,000. Also, the notice they received of their right to cancel the loan was incomplete – it did not have the dates filled in notifying them specifically when their rescission rights ended.
Countrywide’s reason for originally seeking to have the case dismissed was their ability to produce documents signed by the borrowers, including the notice of right to cancel with the dates completed. Chief Judge Alex Kozinski, writing for the Ninth Circuit, disagreed, given that the documents actually provided to the borrowers were incomplete they should not have counted as providing adequate delivery of the notice.
“We interpret "deliver" to mean that the consumer must be allowed to keep the notice,” said Kozinski in reversing the lower court’s dismissal. “When you have pizza delivered, you don't sign for it and let the deliveryman take it back to the restaurant. And when a newspaper boy delivers a paper, he doesn't show you the headlines and then return it to the printer.”
The decision to force Bank of America to stand trial comes on the heels of a landmark federal discrimination settlement announcement last week.