A local woman wins an 11th-hour temporary restraining order halting the foreclosure on her home. Her attorney says her case could be the key to keeping thousands more in their homes.
Time was, critics say, banks wanted proof someone could afford a loan. They wanted a homeowner to succeed. That, the critics say, changed and in recent years loans were being designed to end in foreclosure.
On the face of it, it's hard to understand how the refinancing of Josepha Lopez' home could have ended any other way.
Lopez has owned her Sun Valley home for 10 years. Always made her payments on time even when her job supervising building inspections vanished.
In 2004, she and a lot of people were getting offers to refinance. The mortgage company said her brother and sister who bought the house with her would have to come off the title. She would stay. She had excellent credit, but at that moment no job. In essence the lender pared the loan down to the one person who had no income. It didn't seem to matter, the loan was approved.
Lopez says she could still make the monthly payment of just over a thousand, but was unprepared for it to nearly double in 2 years.
In fact, she says they never let her read the paperwork until she was handed a pen.
She had another handicap. The small print was written in English. A naturalized citizen, her knowledge of the language is limited. She was easy to lie to," says her attorney Bob Hager. Hager attorney says there has been a pattern of targeting Hispanics for the predatory loans because of the language barrier.
But Hager says the real significance of this case is that, in addition to Executive Trustee Services and GMAC Mortgage, it exposes and names MERS...the Mortgage Electronic Registration System which he says was set up by mortgage banks and AIG to handle predatory loans while keeping their hands clean.
"it was set up to conceal from the public, regulators and the courts the actual owners of these deeds of trust. When they figured out how to make money off of bad loans, they brakes were off and they started writing these bad loans as fast as they could so they could get them into the hands of investors without worrying about the risk associated with these loans going into default. They needed MERS to do that."
Now Hager says MERS is the important target. "If these MERS deeds of trust are unlawful as we contend in lawsuits here, and in Arizona and California, we could stop 70 percent of the foreclosures across the country,
A hearing on Lopez' suit is set for April 27 in Reno Federal Court. In the meantime, she can breathe a little easier, but relaxing is still a long court fight away.
"I've lived here for years. I never thought they'd try to take my home."