I have a friend who has applied for mortgage modification and paid $500 to the broker X. The broker X works for some mortgage broker company Y. Then after many months of nothing, my friend found out that broker X is a fraudster. Broker X has always told my friend that paperwork is in the process. My friend finds that it was increasingly getting harder to get in contact with X. Now broker X does not answer the phone any longer and is no longer with company Y.
Can my friend file small claims against mortgage broker company Y? The idea is that
since X was working for Y at the time he commited fraud, then Y is liable for X’s actions?
Your friend paid $500 to Broker X (Agent) and Broker X (Agent) worked for Mortgage Brokerage Company Y. Was the Check or Money Order made payable to Mortgage Brokerage Company Y? Does your friend have a reciept which say's Mortgage Brokerage Company Y? Do you have any paper work that say's Mortgage Brokerage Company Y will do such and such to modify friends mortgage?
There are a lot of people in this country who freelance or work for someone else as a second job, just because Broker X (Agent) worked for a mortgage brokerage company does not make that company (Y) responsible for Broker X (Agents) actions; unless you have a paid check, reciept or contract highlighting the name of Mortgage Brokerage Company Y?
It is unfortunate that some people work for one company and freelance for themselves or another employer or employers.
A small claims judge is going to require a check, a reciept or a contract in company Y’s name in order to potentially find judgement in your friends favor?
I would not file a small claims as you do not want to lose control by turning it over to the courts. You don’t want to argue in court but you want to go to ‘your brother’ and settle matters directly. If it were me, I would send a notice to X & Y, making both parties responsible and send a notice that included the words that their actions leads you to believe fraud was committed and penalties will be inforced. Give them conditions to respond with a demand that their response be via an affidavit under penalty of perjury and send through a notary presentment (most people will not sign an affidavit under penalty of perjury which will give you a high likelihood of the upper hand in this matter. When the time passes and you receive no response, have your notary sign an affidavit on non response for your file. Then send a notice of fault giving them an opportunity to respond for another 10 days. When they do not respond, have your notary sign another affidavit of non response to keep in your file. Finally, send a notice of fault, and lien them using a UCC filing and take their stuff!! Learn contract law and UCC rules and you will get satisfaction. If you need help, send a number via email and I can guide you through the process. Hope that helps.
Small Claims Court costs time and money. Filing affidavits cost money. Small Claims Court is also slow as a mule to get a court date unless you can get on one of those Court TV shows Is it worth the trouble for 500 bucks?
Are mortgage brokers licensed in Los Angeles? If so, complain to the body that regulates mortgage brokers and mortgage broker companies and see what they say before wasting your money on legal assistance. Maybe they can do something for you like put their license under suspension if they don’t pony up. Even the threat of complaining to a regulatory body might get you your money back.
Try this http://ag.ca.gov/loanmod/
The attorney generals office in CA is prosecuting these scammers vigorously. Get your friend involved. the link also provides tips for NOT getting ripped off.
Its unfortuanate but every legit operataion must work twice as hard to do things correctly because of the scammers