Identity theft becomes homeowner’s worst nightmare

Without her knowledge, an unknown perpetrator used the name,Social Security number, credit history and identification of Aurora Lepe topurchase a residence and obtain two mortgages secured by the property.

Lepe’s signatures on the documents were forged. Due tononpayment of its mortgage, lender CTC Real Estate Services sold the propertyat a foreclosure auction sale.

Purchase Bob Bruss reports online.

After paying off the balances on the first and secondmortgages, $51,334 surplus funds remained.

Not knowing what to do with the remaining funds, the lenderinterpleaded the money into court. The lender said to the judge the fair andequitable result would be to have Ms. Lepe receive the surplus funds to helpcompensate for her identity theft and all her inconveniences. Nobody contestedthe interpleader.

If you were the judge would you give the excess funds to Ms.Lepe?

The judge said yes!

Ms. Lepe has established by a preponderance of the evidenceshe was a victim of identity theft, the judge began. Although she had nothingto do with title to the residence being taken in her name, and an unknownperpetrator profiting from the first and second mortgages, she is the onlyindividual who has a claim to this money, he continued.

“The mere fortuity that the wrongdoer has disappearedwithout receiving the surplus and is not subject to legal action should not, asa matter of equity, preclude Ms. Lepe from being able to recover the funds notin the possession of the identity thief,” the judge emphasized.

No one else has claimed the funds remaining after paying offthe foreclosed mortgages secured by the property, and as a result of theidentity theft and foreclosure, Lepe’s credit was ruined, although she was aninnocent victim, he commented. Therefore, the $51,334 excess funds remainingafter the foreclosure sale and paying the attorneys fees shall go to Ms. Lepeas restitution in this unusual situation, the judge ruled.

Based on the 2006 California Court of Appeal decision in CTCReal Estate Services v. Lepe, 44 Cal.Rptr.3d 823.

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2006 Inman News

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