Thursday, September 8, 2011


Homeowner’s Lawsuit
Against Major Banks
Alleges Predatory Lending
Unfair and Deceptive
Trade Practices
by Wells Fargo and Others

Pelayo Duran Faces “David and Goliath”
Battle In Potentially Precedent-Setting Case In Florida Court

Miami, FL (PRWEB)  
Coral Gables, Fla. homeowner Pelayo Duran claims in his lawsuit that what he wanted was
the attractive loan he saw advertised in the Miami Herald to refinance a home for his growing
family. Instead, he ended up in the middle of an endless and costly legal fight with the
nation’s largest banks accusing them of illegal predatory lending and unfair and deceptive
trade practices.
At the same time, Duran’s attorneys claim his mortgage has been sold in the secondary
market to investors who paid a profit to Wells Fargo Bank NA who is now acting as a trust
administrator to the loan pool that allegedly owns Duran’s loan, a loan lawyers say was
designed to fail.
"Someone has to stand up for the rights of the defenseless and the oppressed,” said Duran.
“People have to know the real story of how these banks were able to take the American
dream and destroy it. We believe they reaped billions of dollars in profits by lying, falsifying
documents, appraisals, applications engaging in predatory advertising and lending practices.
They hide behind all the companies that are involved and the large law firms that represent
them. They create layer upon layer of red tape to avoid being held accountable."
Duran's attorney, Adis Riveron, Esq., filed a lawsuit in Miami-Dade Circuit Court (CASE No.
09-CV-20411-CIV) naming defendants Wells Fargo, Countrywide (bought out by Bank of
America), Greenpoint Mortgage Funding and two individuals Lee Rosenthal (the appraiser),
and Cindy Sierra (the mortgage broker). The lawsuit has charged them with a total of 13
counts including negligence, fraud, unfair and deceptive trade practices, and breach of fiduciary
duty. Duran seeks a jury trial to determine punitive damages. You can download a copy the
lawsuit at
“Even though my home is not in foreclosure and I continue to make regular, on-time payments,
my case is similar to the plight of millions of homeowners across the country,” said Duran, a
prominent South Florida attorney. “Fortunately, I have been able to gather the financial resources,
legal determination and stamina to take on the giant lenders because I refuse to give in when what
they are doing is clearly unconscionable and dishonest.”
The case was immediately removed by the defendants to federal court in 2009, but has since
been remanded back to the state court earlier this year after a tough and expensive legal battle.
Duran also had to pay a $10,000 judgment following an order compelling part of the case against
Wells Fargo to arbitration.
According to Duran's attorneys, they have filed a motion to stay the proceeding because the
arbitrator from the American Arbitration Association might have engaged in inappropriate
conduct. Attorneys said they would now file a motion to force the arbitrator to recuse himself.
“It is inevitable the Mr. Duran will have to begin the entire arbitration process from the
beginning,” said Riveron. “This conduct on the part of the arbitrator calls in to question the
entire integrity of the expensive arbitration process that Wells Fargo includes in its mortgage
agreements. The only reason they don't agree to have the lawsuit in state court where it
belongs is to make the process as dragged out and expensive as possible. They will stop at
nothing to delay and obfuscate justice. I believe in my lawsuit and I will not stop until I have
exhausted every avenue, said Duran.”
The lawsuit claims that this legal saga began when Duran tried to refinance his primary
residence in 2005. He had purchased the home in October 2004, and had he made an
initial down payment of $100,000. Shortly after the purchase, Duran needed to access
some of the money he had put down to cover imminent personal and business issues.
According to the lawsuit, Duran saw an ad in the Miami Herald published by Wells Fargo
Home Mortgage. The ad was offering an Adjustable Rate Mortgage (ARM) at a rate of
5.75%, with 10 years interest only payments, a fixed interest rate for 10 years, and a 5.1
annual percentage rate. Duran’s plan was to buy down the loan rate at closing 1 to 2 point
and pay off the home in about 10 to 15 years.
The lawsuit states Duran contacted Wells Fargo because he had a longtime business
relationship with the bank and the terms in the ad were the most favorable. Attorneys
claims when Duran called Cindy Sierra who he thought was a bank representative, she first
told him that the advertised rates were not available. She then told him that she would get
him an even a better deal. Duran believes that he, just like millions of other Americans, was
baited into applying for an attractive loan that never existed, only to be switched to a high-risk
subprime loan.
According to the lawsuit, Sierra told Duran to leave the income section on the application
blank until such time as she could conduct a “pencil search,” a prohibited but common
practice used by mortgage brokers and lenders in order to maximize the loan amount in
which a mortgage broker would shop for an appraiser to support the highest value that
the lender could hit in originating the loan. Initially, Sierra informed Duran that his home
was worth $1.5 Million. The appraiser, Lee Rosenthal who worked for and was hired by
Rels Valuation, (also Wells Fargo company), ultimately determined and represented to
Duran that his home, which was purchased for $984,000 four months earlier, was now
worth $1.2 million.
“Unbeknownst to me, she created my loan by adjusting the value of my home to my
debt-to-income ratio,” said Duran. “They never considered my ability to repay the loan.
All they cared about was the appraised value and my good credit score. What I also
discovered was that a Wells Fargo representative was actually originating a loan for
Greenpoint Mortgage Funding and that immediately upon the closing of my loan,
Greenpoint would turn around and sell my loan right back to Wells Fargo as trust
administrator for a pool of loan. In addition, Fred Schlang, SRA, an appraisal expert,
later alleges that the bank’s appraisal was inappropriately inflated."
According to the lawsuit, after haggling over the terms for several weeks, Duran and
his wife were disheartened at the closing when the final Greenpoint loan agreement reflected
a financed amount of $920,000 with an APR of 5.622% fixed during a five year period,
with rate adjustments up to twice per year, a pre-payment penalty, and a rate cap of 10.5%,
(not the 5% he had been previously offered in writing) and they would not be able to buy
down the rate 1 to 2 percentage points at closing, as he had been previously promised.
“None of these terms were disclosed throughout the entire process,” said Duran. “She
attempted to fix the problem at the closing of the mortgage, but they lied to my wife
and me, once again.”
Duran and Riveron claim in the lawsuit that this case stems from the common practice
of securitizing loans and selling them in the secondary market for huge profits. These
mortgages were underwritten primarily on the basis of an inflated appraisal and have
basically no underwriting standard other than securing a signature on loan documents.
“Greenpoint and Wells Fargo’s profits are determined by the amount of and quantity of
loans they successfully closed, not the quality of those loans,” said Duran. “The lender has
an incentive to pressure appraisers and brokers to reach values that will allow the loan to
close – without regard to whether the appraisal reflects the home’s actual value. Likewise,
the independent broker is not tied to one lender, but has relationships with multiple lenders.”
Duran said since he began his investigation and even before filing of the lawsuit, his home
mortgage was transferred from Greenpoint to Countrywide and now to Bank of America.
Duran and Riveron said for some unknown reason, Bank of America and Greenpoint have
been attempting force place insurance on his home. The last policy cost $22,000.00 a year.
"They want me to go into foreclosure in order to say 'he is just like all the other unsuccessful
people who bring these predatory lending complaints in defense of their foreclosures,'” said
“But it seems like they are trying to force him into default,” said Riveron. “Bank of America
flagged his account and they won't even speak to him. They forced him to use a lawyer so
he can spend even more money. They want to break his back. They admitted that there is
no reason to have placed forced placed insurance on his home, but yet they won't apply
his payments and they won't correct their own mistake.”
“Sadly, at the end of the day, after more than two years and hundreds of thousands of
dollars invested into this litigation Duran (as many Americans) is still not clear as to who
he is indebted to because they will not produce documents to establish or to prove
who is the true holder of his mortgage. It is one roadblock after another,” said Riveron.

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