Client seeks chapter 7 relief for $78K credit card debt
CLIENT has had an on going “battle” with Wells Fargo for justice on her mortgage since 2007. It’s been 9 years since she made the mistake of refinancing her fully paid house with World Savings Bank. Yes, client was already a senior 9 years ago when she decided to borrow $250K against her house, which had no more mortgage! Apparently, a relative had asked her for some money to finance a business, and being the doting aunt that she was, she gladly but mistakenly, obliged. The question then was where should she get the refinance loan? She spoke to an agent of a very popular mortgage loan broker who offered her a fixed 30-year mortgage at 2% per annum. The broker told her that the interest rate was so low, it would make her cry, that the mortgage payment would be fixed for 30 years, and that she could even choose from several amounts of mortgage payments, depending on which one she would be most comfortable with.
She signed all the loan documents without reading them as most seniors would do. After paying for two years, she noticed that the loan balance, instead of decreasing, was increasing! Eventually, she got a letter from Wells Fargo informing her that the bank had taken over the loan. In addition, Wells Fargo said that she had a default of $20,000, and that if this amount was not paid in full immediately, foreclosure of her residence would ensue. When she called the famous loan broker to ask what was going on, she was told that the loan broker was being criminally indicted for a massive loan mortgage fraud scheme. It was only then that client realized that she had been duped. She did some research and found out that Wells Fargo had taken over the loans of World Savings, including hers, and that Wells Fargo was actually trying to make things right for the victims of this “massive” fraud as part of the settlement with the Attorney General’s office as well as part of the Federal “bail out” funds.
She called Wells Fargo and was given the run around. Wells Fargo wrote her many letters saying that they were going to look into the matter and would get back to her within 30 days. The 30 days dragged into 7 years without any resolution. Wells Fargo started foreclosure proceedings and client paid off the entire default of $57K. It was back to square one for a while then the problem resurfaced. Client hired a succession of lawyers who all went against a brick wall because client did not want to sue; all she wanted was to have the matter amicably resolved by negotiation.
Now there is a default of $40K, and Wells Fargo wants to foreclose yet again. She now retains me for a Chapter 13 to stop the foreclosure and to negotiate a settlement with the bank without a lawsuit. Fortunately, I was able to get some positive response with the bank saying that they are now having their legal department look into it, and that they would propose a settlement by next week. It remains to be seen whether the bank is now serious in resolving this matter, or if they are bluffing again.
Second client is 74. Her husband left her 20 years ago. She was able to sell the family home a couple of years ago with a net profit of $200K. Then, disaster struck. Her only son got sick, lost his job because of his illness and became her dependent. She had to take care of her 40-year old son, who moved in with her. Medical insurance would not pay for a lot of the expenses. So, the $200K evaporated after 3 years. After that, she relied on credit cards to pay for her son’s medical bills. Fortunately, her son got well and will son be joining the work force again. The problem is she now owes $78K of credit cards. The minimum payment is $3K a month. She only gets social security of $1800 and a pension of $500. She is able to pay her rent of $800. But there is just no way she can pay the 78K of credit cards. So at 74, client decides to wipe out all her credit card debt and obtain a fresh start!
“Let God (Adonai/Yahweh) have all your worries and cares, for He is always thinking about you and watching everything that concerns you.” — 1 Peter 5:7
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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 1000 S. Fremont Ave, Mailstop 58, Building A-1 Suite 1125, Alhambra, CA 91803.