Facts

Golden Gate Mortgage and Secure Financial Inc. were real estate mortgage brokerage companies, with designated licensed officers. Bay Area Telemarketing was controlled by Zak Khan who was also a broker employed by Golden Gate and/or Secure. Khan was charged with criminal fraud and grand theft on May 17, 2005.

The plaintiffs, property owners in California, filed suit against Golden Gate, Secure Financial, Khan and various other companies and employees, alleging they engaged in a common plan and scheme to defraud.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that the companies and their employees induced them to refinance existing home mortgage loans that contained terms and conditions markedly different from those represented. The plaintiffs also alleged defendants charged them undisclosed loan fees and costs, misrepresented terms of the loans, and actively participated in concealing the true loan terms. The plaintiffs further contended that the companies and employees took money out of their loan proceeds to make payments without plaintiffs' knowledge or consent, falsified information contained on the mortgage loan documents, and also forged signatures on plaintiffs' applications and loan documents.

The plaintiffs said they were first solicited by calls, during which the caller would use a prepared script to inform plaintiffs about mortgage loans obtainable to finance their existing loans, representing that plaintiffs would not have to pay fees or costs for refinancing. After the calls, plaintiffs would meet with one of the telemarketing brokers, Khan and another individual, who would make representations to plaintiffs about more favorable loans attainable through their refinancing, to improve their financial conditions. The plaintiffs claimed that defendants repeatedly stressed they were attempting to improve plaintiffs financial conditions with the new loans, which would be accomplished by their relationship with World Savings Bank. At the meetings, defendant brokers would give plaintiffs loan application documents, asking them to sign blank applications with information to be filled in later. The plaintiffs alleged that defendant brokers would fill out the documents and submit them to World Savings. The plaintiffs contended that the bank obtained their credit reports and found information contrary to the documents, and the loans provided no benefit to plaintiffs, making the loans improper.

The plaintiffs stated that they relieved disclosure forms from World Savings, which included information inconsistent with the representations made by defendant brokers, and when plaintiffs contacted them, they were told World Bank had made a mistake, assuring plaintiffs the loan terms would be as promised. Subsequently, plaintiffs alleged, World Savings would send the final loan documents to Ticor, who would give instructions to defendant brokers, who would then have plaintiffs sign the instructions or forge the signatures themselves. The brokers would then show plaintiffs terms that were different that the actual loan terms and adjustments. After the loans closed, defendant brokers would receive the amount due, who would alter the statements to hide the cost of the loans and the amount of money to be received from plaintiffs. The plaintiffs alleged they learned of the true loan terms after they received their loan statements.

Result

The jury awarded plaintiffs $539,442 in damages against Khan.

Other Information

FILING DATE: Aug. 23, 2007.