Lender misrepresents deal to Spanish-speaking couple: Fraud: Federal law violations: Economic losses: Verdict: Punitive damages

Law Reporter, Oct 2004

Vasquez-Lopez v. Beneficial Or., Inc., Or., Multnomah County Cir. Ct., No. 0210-10108, Jan. 30, 2004.

Vasquez-Lopcz, 52, and his wife, 50, refinanced their home and later took a second mortgage on their home for home repairs. Because the couple spoke limited English, the mortgage company assigned a Spanish-speaking agent. The agent convinced the couple to consolidate their loans. Later that year, the couple learned the property tax and homeowners' insurance expenses were not covered, resulting in back tax charges and lapsed insurance. They were forced to pay penalties and interest and to pay additional fees to transfer the loan to another lender.

Vasquez-Lopez and his wife sued the mortgage lender, alleging fraud and violations of the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. Plaintiffs contended they could not read the consolidation agreement, but that the agent reassured diem that their property taxes and homeowners' insurance were covered. Plaintiffs further alleged the agent told them their interest rate would be 7 percent when actually it was 13 percent.

Defendant contended plaintiffs were at fault for relying solely on the statements of the agent without reading the contract. Defendant also argued the agent accurately explained the details of the agreement.

A jury awarded plaintiffs about $560,200, including $500,000 in punitive damages. The court then reduced the punitive damages to about $237,000.

Plaintiffs' expert was Thomas A. Tarter, banking/savings and loans, Sherman Oaks, CaI.

Plaintiffs' Counsel

* Phil Goldsmith,

* Hope Del Carlo, and

Mark E. Griffin, all of Portland, Or.