Fremont Investment & Loan Engaged in Fraudulent Mortgage Practices

Practice Areas :: Mortgage Fraud :: Hernandez v. Investment & Loan et al.

Karina Hernandez v. Fremont Investment & Loan et al.

Contra Costa Superior Court Case No. C07–02467

The case of Karina Hernandez is part of Brayton Purcell’s fight for the victims of fraud and shady dealing in the mortgage and real estate industry.

Ms. Hernandez and her husband are hardworking people who dreamed of owning a home, and put their trust and faith in a mortgage and real estate broker who did not deal with them honestly. He misled them about what the monthly payments would be, and falsely promised them that he would refinance them into an even better loan before the rate adjusted upwards. As it turned out, he collected hefty fees and commissions, and left them struggling to make payments on a house they could never really afford in the long term.

Brayton Purcell has filed suit on behalf of Ms. Hernandez alleging fraud, negligence, and breach of fiduciary duty—which is the duty of honesty, fair dealing, full disclosure, and integrity that real estate and mortgage brokers owe to their clients in California—against the real estate and mortgage agents and broker who were supposed to be looking out for her. Had they complied with their legal duties, the suit alleges, Ms. Hernandez would not have purchased that house.

The suit also makes class–wide claims against the lender, Fremont Investment & Loan. At the time, Fremont was in the business of paying mortgage brokers big commissions to find customers for its expensive mortgages, which Fremont would then resell to investors for hefty profits. The suit alleges that Fremont created loan products and procedures that were essentially designed to help these brokers sell people mortgages they could not really afford. It alleges that these practices constitute fraudulent, unfair, and unlawful business practices under California’s Unfair Competition Law and violations of various provisions of California’s Consumer Legal Remedies Act.

The suit also alleges that Fremont is failing to comply with a legal obligation to help victims of these fraudulent mortgage practices like Ms. Hernandez. In March of 2007, the Federal Deposit Insurance Corporation (FDIC) ordered Fremont to cease and desist from “unsafe or unsound banking practices and violations of law and/or regulations” and ordered Fremont to take to make programmatic efforts to restructure loans in distress as a result. Ms. Hernandez alleges that she should be a beneficiary of these efforts, but that none have been forthcoming despite her repeated efforts to contact the bank and avoid foreclosure.

If you believe you have been a victim of fraud, negligence, or breaches of fiduciary duty by your real estate or mortgage broker, and/or if you obtained a mortgage from Fremont Investment & Loan, or have related information or concerns, please contact us at pfredman@braytonlaw.com.

For a description of the “unsafe or unsound banking practices and violations of law and/or regulations” in the FDIC Order against Fremont Investment & Loan, click here .

For a copy of the complaint in Karina Hernandez vs Fremont Investment & Loan et al., click here.

The general description of the “unsafe or unsound banking practices and violations of law and/or regulations” in the FDIC Order against Fremont Investment & Loan provides a succinct summary of the types of practices by Fremont and other lenders that are largely responsible for the current real estate and mortgage crisis. They include:

• Qualifying borrowers for loans with low initial payments that expire after an initial period without analysis of the borrower’s ability to repay the debt at the fully–indexed rate.
• Approving borrowers without considering appropriate documentation or verification of their income.
• Marketing adjustable–rate mortgages likely to require frequent refinancing to maintain an affordable monthly payment and avoid foreclosure.
• Providing borrowers with inadequate or confusing information relative to loan terms and risks and the borrower’s obligations for property taxes and insurance.
• Approving borrowers for loans with inadequate debt–to–income analyses that do not consider the borrowers' ability to meet their overall level of indebtedness and common housing expenses.
• Approving loans (or “piggyback” loan arrangements) with loan–to–value ratios approaching or exceeding 100 percent of the value of the collateral.

If you have been a victim of these or similar practices, you may have a claim against your mortgage broker or lender. If you think you have a claim, or related information, please contact us at pfredman@braytonlaw.com.

Our Beliefs

Our basic philosophy is simple—to provide our clients with excellent representation and service....more