MORTGAGE QUALIFICATION DETERMINATIONS: FRAUDULENT MISREPRESENTATIONS
Perlas v. GMAC Mortgage, LLC, (First District, August 11, 2010) 187 Cal.App.4th 429, 113 Cal.Rptr.3d 790, 10 Cal. Daily Op. Serv. 10,254, 2010 Daily Journal D.A.R. 12,466
A man and a woman whose property was foreclosed upon when they were unable to make the payments on their property loan and a home equity line of credit filed suit against GMAC Mortgage, LLC, a commercial mortgage lender, asserting causes of action for fraudulent misrepresentation and fraudulent concealment. The plaintiffs alleged that at the time the defendant prepared and tendered documents for the loan and credit line, it was not possible for them to make the payments called for, but by preparing and tendering the documents to the plaintiffs, the defendant represented that they could in fact make the payments. The plaintiffs further alleged that the defendants failed to disclose to them that they could not possibly afford the payments called for in the loans, and that the qualification for the loans was based upon a fabricated inflated income.
The trial court sustained the defendants demurrer without leave to amend and the court of appeal affirmed, holding that the plaintiffs could not amend to state a cause of action for fraudulent misrepresentation or fraudulent concealment:
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