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rtrefflich
1732 Posts |
 Posted - 03/27/2008 : 9:03:41 PM
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Long story short, I had an idiot loan officer who came to me asking me if we could do a c/o option arm for a 70 yr old client who had no job, no income (ssi) and owed $40,000 on her house in CA that appraised for $600,000, she wanted to take out all of the money to "invest". I told him we couldn't do it since she had no job, or income and it didn't make sense. The moronic LO went on his own, found another broker to do a NINA loan for her and walked her trough the entire thing. It doesn't matter until we actually go to court that I have proof that he was told (written) by myself and my company not to do anything with her, that the president of the board went out to her house after we denied her the loan to tell her that we had nothing to do with her and this loan she was getting and even advised against it. She didn't like the loan (believe it or not) and now she wants compensation. Since I didn't even receive a 1003, credit or anything my E&O won't cover it (they have already denied it) and myself, in addition to the broker that actually did the file, the bank that funded, the escrow, the title, and the current servicer are all named in the suit. About 7 months ago when I first heard about this I offered to refi her to a 30 yr fixed rate at which she could afford on her social security if she puts the money back into the house. 7 months ago there were some programs that would still do SIVA and SISA retired.
Is there anywhere that will allow me to refi this woman back to a 30 yr fixed loan on a NINA or SISA (SIVA) program for a retired person, and allow me to get some YSP to cover some of the charges? This is the only hope that I have to get out of this program. She had a 720 FICO at the time of the loan and no other debt and the LTV will be around 20-30% depending upon what the home has fallen to. |
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windyctymktg
475 Posts |
Posted - 03/27/2008 : 9:10:33 PM
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| What about looking at a reverse mortgage for her? |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:16:59 PM
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Thanks, I don't do them but I just sent that over to my attorney as a settlement option
quote:
Originally posted by windyctymktg
What about looking at a reverse mortgage for her?
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CoralSnake
9087 Posts |
Posted - 03/27/2008 : 9:18:48 PM
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quote:
Originally posted by windyctymktg
What about looking at a reverse mortgage for her?
Thats what I was thinking- probably your best bet. |
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neversaynever
769 Posts |
Posted - 03/27/2008 : 9:23:25 PM
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| Would be a shame if someone "fell and broke their hip" getting out of bed. Might make someone rethink things over, and realize it wasn't your fault. :D |
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1stintegritymort
1165 Posts |
Posted - 03/27/2008 : 9:23:29 PM
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| this is a frivilous law suit. if you in fact did not close her loan, you will be dismissed from the case if you find a good attorney. i would never do a loan for this lady if i were you. if she is suing you, and you are going to pay attorney fees, i would find a way to counter sue her and get your money back. |
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hherrm
1200 Posts |
Posted - 03/27/2008 : 9:25:04 PM
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| If she took out all the cash she could get, I don't think that a reverse would work for her. |
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mortgagemessiah
6549 Posts |
Posted - 03/27/2008 : 9:25:16 PM
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| I would think she has no claim against you, especially if you can show proof that you you did not tdo the loan for her. Even in this climate she's not going to win. |
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CoralSnake
9087 Posts |
Posted - 03/27/2008 : 9:26:00 PM
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quote:
Originally posted by hherrm
If she took out all the cash she could get, I don't think that a reverse would work for her.
He said the ltv should still be about 20-30. |
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CoralSnake
9087 Posts |
Posted - 03/27/2008 : 9:26:33 PM
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quote:
Originally posted by neversaynever
Would be a shame if someone "fell and broke their hip" getting out of bed. Might make someone rethink things over, and realize it wasn't your fault. :D
Wow. You're hired. |
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1stintegritymort
1165 Posts |
Posted - 03/27/2008 : 9:27:51 PM
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| you said that the LO sent the loan to another broker and that the lender and title company are named in the lawsuit. all you need is the HUD showing your company did not close the loan. case closed. |
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lunarhamster
2134 Posts |
Posted - 03/27/2008 : 9:28:10 PM
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No doubt, I would stay as far away from her as I could. If your story is true, and let me tell you, it sounds a bit weird to me, why the hell would she sue a Broker that didn't even do her loan? unless she has Alzheimers and doesn't remember who her Broker was.
Sounds weird, but I would call my Attorney and have this taken care of asap. |
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mortgagemessiah
6549 Posts |
Posted - 03/27/2008 : 9:29:22 PM
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| Yeah, why are you even talking to this lady? |
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1003s.com
2677 Posts |
Posted - 03/27/2008 : 9:29:57 PM
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quote:
Originally posted by 1stintegritymortgage
this is a frivilous law suit. if you in fact did not close her loan, you will be dismissed from the case if you find a good attorney. i would never do a loan for this lady if i were you. if she is suing you, and you are going to pay attorney fees, i would find a way to counter sue her and get your money back.
Good post, I will add, by actually doing a loan for her, you would be exposing
yourself to even more liability. |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:30:30 PM
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I agree completely with you, however PPL is covering my personal (I am being sued personally as well as the business) defense (never use them, I had to prove to them that I didn't do the loan, which I couldn't do simply because I don't have any paperwork showing my name not on the 1003, because I don't have a 1003, after virtually threatening to sue them they decided to cover me) and I have to pay for my defense for the company. I can countersue but it will only cost me more time and money to try and get money from her since she doesn't have any, and whatever she does have her attorney will end up taking trying to sue me as well as the other parties. I figure this is the cheapest way to get me off of this case. My attorney tells me that I can go after the LO but that is also a waste of time and money since he has nothing. I guess I could put a lien on the house of the lady but I would have to get my judgement before she does something to her house, I figure it will cost me very little and if I get the YSP to pay for it a few grand in legal fees is minimal to dragging this out to get a few worthless judgements.
quote:
Originally posted by 1stintegritymortgage
this is a frivilous law suit. if you in fact did not close her loan, you will be dismissed from the case if you find a good attorney. i would never do a loan for this lady if i were you. if she is suing you, and you are going to pay attorney fees, i would find a way to counter sue her and get your money back.
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lunarhamster
2134 Posts |
Posted - 03/27/2008 : 9:32:28 PM
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| No offense, but I am not buying this story. |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:33:35 PM
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| I am already a party in the suit, the suit has been filed and we had to respond. If you do not respond you are automatically liable (or something like that). I am just looking for a way out of this without costing me a bunch of money. The problem with our legal system is that anyone can sue for any reason. I have to pay until the judge throws me off. The only way I would do it is if I am released completely from all liability. |
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1003s.com
2677 Posts |
Posted - 03/27/2008 : 9:35:55 PM
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quote:
Originally posted by lunarhamster
No doubt, I would stay as far away from her as I could. If your story is true, and let me tell you, it sounds a bit weird to me, why the hell would she sue a Broker that didn't even do her loan? unless she has Alzheimers and doesn't remember who her Broker was.
Sounds weird, but I would call my Attorney and have this taken care of asap.
It sounds like his LO was involved,
and he may have liability for the actions
of his LO.
His LO may also have also been employed by the other broker.
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:37:02 PM
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Here is the case file if you want to look at it
Case RIC485578 - TINCHER VS NIUMATALOLO
Go to the riverside county court
quote:
Originally posted by lunarhamster
No offense, but I am not buying this story.
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lunarhamster
2134 Posts |
Posted - 03/27/2008 : 9:39:09 PM
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quote:
Originally posted by rtrefflich
Here is the case file if you want to look at it
Case RIC485578 - TINCHER VS NIUMATALOLO
Go to the riverside county court
quote:
Originally posted by lunarhamster
No offense, but I am not buying this story.
I believe you, I guess I am confused. Did this guy work for you or your company? |
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1stintegritymort
1165 Posts |
Posted - 03/27/2008 : 9:40:12 PM
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| like i said, get the HUD and that is all you will need. that should be enough evidence to show you did not close her loan. it will clearly show the other company being paid on the loan. get this from the title company that is named in the suit. they should be willing to give this to you. |
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Originate_This
188 Posts |
Posted - 03/27/2008 : 9:42:07 PM
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| Maybe I'm still not understanding. You said the LO went to another broker, why would your name be on any 1003? The basis of her lawsuit against you is that you put her into a loan that wasn't fit for her, but if you didn't close it what's the problem? Just because you're named in the lawsuit doesn't mean you're automatically liable for anything. |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:43:09 PM
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This guy worked for me, but when I told him I would not do this loan, he went on craigslist and found another broker to do it. Had he stopped working for me and went to work for the other guy it would have been fine but he was working for me and doing this loan with the other guy. His license was with me though.
quote:
Originally posted by lunarhamster
quote:
Originally posted by rtrefflich
Here is the case file if you want to look at it
Case RIC485578 - TINCHER VS NIUMATALOLO
Go to the riverside county court
quote:
Originally posted by lunarhamster
No offense, but I am not buying this story.
I believe you, I guess I am confused. Did this guy work for you or your company?
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lunarhamster
2134 Posts |
Posted - 03/27/2008 : 9:44:20 PM
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| That explains it. |
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racerx
10171 Posts |
Posted - 03/27/2008 : 9:45:23 PM
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This is exactly what I was thinking. As the broker, you are responsible for the actions of your salespeople (LO).
Did the LO receive any compensation from the broker that did close the loan?
quote:
Originally posted by 1003s.com
quote:
Originally posted by lunarhamster
No doubt, I would stay as far away from her as I could. If your story is true, and let me tell you, it sounds a bit weird to me, why the hell would she sue a Broker that didn't even do her loan? unless she has Alzheimers and doesn't remember who her Broker was.
Sounds weird, but I would call my Attorney and have this taken care of asap.
It sounds like his LO was involved,
and he may have liability for the actions
of his LO.
His LO may also have also been employed by the other broker.
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:46:51 PM
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Because it was my LO that did all of the stuff, the problem with being a broker is that you are responsible for your LO actions. The one thing that will help me is that he had to go outside of my office to get this done, not because I couldn't do it, but because I wouldn't do it. It is a matter of getting out of the law suit without spending a ton of money on legal fees. My E&O won't cover me because I had nothing to do with it. If I had picked up a 1003 or credit report and had some proof that we "denied" her, they would cover it, but since they have no proof that this ever came to us they cover it. Check with your E&O to understand your coverage before you get into a situation like this also.
quote:
Originally posted by Originate_This
Maybe I'm still not understanding. You said the LO went to another broker, why would your name be on any 1003? The basis of her lawsuit against you is that you put her into a loan that wasn't fit for her, but if you didn't close it what's the problem? Just because you're named in the lawsuit doesn't mean you're automatically liable for anything.
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neversaynever
769 Posts |
Posted - 03/27/2008 : 9:47:43 PM
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| Just make a settlement with the lady, shes a lonely 70yr old lady and just wants someone to rub her down... |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 9:51:26 PM
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Sorry, I'm not going to make that kind of settlement, I'd rather eat a few grand a refi her house, my wife would be a lot happier too.
As far as the guy making money, he tells me he didn't but then after all of this came out he told me he did.
That may help my case more because the other broker then broke the law, but how was he paid and how can he prove it? For my LO to have legally made any money off of this, the money would have had to come from the other broker to me and then I would have to pay him. Any money paid from the other broker to my LO is illegal (at least in the state of CA)
quote:
Originally posted by neversaynever
Just make a settlement with the lady, shes a lonely 70yr old lady and just wants someone to rub her down...
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racerx
10171 Posts |
Posted - 03/27/2008 : 9:54:11 PM
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And now that you know your LO illegally received compensation, are you required to notify the DRE? Does he still work for you?
quote:
Originally posted by rtrefflich
Sorry, I'm not going to make that kind of settlement, I'd rather eat a few grand a refi her house, my wife would be a lot happier too.
As far as the guy making money, he tells me he didn't but then after all of this came out he told me he did.
That may help my case more because the other broker then broke the law, but how was he paid and how can he prove it? For my LO to have legally made any money off of this, the money would have had to come from the other broker to me and then I would have to pay him. Any money paid from the other broker to my LO is illegal (at least in the state of CA)
quote:
Originally posted by neversaynever
Just make a settlement with the lady, shes a lonely 70yr old lady and just wants someone to rub her down...
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Chris Clark
5861 Posts |
Posted - 03/27/2008 : 9:58:14 PM
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well, i'm no attorney, however the burdon of proof is on her. any competent judge should remove you from the suit as long as you can prove that neither you nor your company closed the loan for her, even though someone working for you illegally closed the loan.
question: is this former employee of yours a 1099 employee? |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 10:01:57 PM
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He is no longer working for me and he has since moved out of state.
He was a 1099 but that doesn't matter, it is the fact that I was his broker
I agree with you, the judge should dismiss me, but it could be $5000 in legal fees or more. Riverside civil court is so backed up that these cases could drag on for two to three years |
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Chris Clark
5861 Posts |
Posted - 03/27/2008 : 10:12:57 PM
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quote:
Originally posted by rtrefflich
He is no longer working for me and he has since moved out of state.
He was a 1099 but that doesn't matter, it is the fact that I was his broker
I agree with you, the judge should dismiss me, but it could be $5000 in legal fees or more. Riverside civil court is so backed up that these cases could drag on for two to three years
actually, that does matter. if he was 1099, he wasn't really your employee; he was an independent contractor.
being that he was an independent contractor, she really has no case against you from the standpoint of him putting her in a bad loan while he was working for you because he didn't work for you in the first place. (it's like being hit by a domino's pizza guy- if he's delivering pizzas, domino's has liability. but if he's not, they have no liability). in this case, you have no liability because he didn't work for you. had the loan been written through you, that is where the liability would have come into effect.
i would think you're probably getting a little confused about the whole broker / lo licensing issue. in the state's eyes, you'd have liability for any loans he does through you while he has his license parked with you. but you cannot have liability for anything he does with any other broker (illegally). |
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propertylender.c
755 Posts |
Posted - 03/27/2008 : 10:17:32 PM
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You are liable in a way because the license of the stupid agent was with you.
However, you should sue the agent and broker who did the loan.
Make sure you do a search of all their assests before they start transferring them.
Also, file a complaint against the with the agency the has their license.
You may even want to counter sue the homeowner. I know this will cost money, however, it is also costing the homeowner money as well.
Trust me, no real estate attorney will take this on a contingency, and the homeowner is paying as well.
Good luck. |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 10:20:09 PM
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That is my argument with my attorney, what her attorney told me was that regardless of the situation, because his license is with me I am liable. The whole problem is that it is up to a judge to decide and being reactive instead of proactive could cost me a lot more money. The guy has no money to countersue, the lady has no money to countersue and I really cannot go after the attorney for naming me in the suit. If I can get out of it before it goes on to far it will cost me a whole lot less money.
Litigation is really expensive, I am a big fan of the English system where loser pays.
quote:
Originally posted by Chris Clark
quote:
Originally posted by rtrefflich
He is no longer working for me and he has since moved out of state.
He was a 1099 but that doesn't matter, it is the fact that I was his broker
I agree with you, the judge should dismiss me, but it could be $5000 in legal fees or more. Riverside civil court is so backed up that these cases could drag on for two to three years
actually, that does matter. if he was 1099, he wasn't really your employee; he was an independent contractor.
being that he was an independent contractor, she really has no case against you from the standpoint of him putting her in a bad loan while he was working for you because he didn't work for you in the first place. (it's like being hit by a domino's pizza guy- if he's delivering pizzas, domino's has liability. but if he's not, they have no liability). in this case, you have no liability because he didn't work for you. had the loan been written through you, that is where the liability would have come into effect.
i would think you're probably getting a little confused about the whole broker / lo licensing issue. in the state's eyes, you'd have liability for any loans he does through you while he has his license parked with you. but you cannot have liability for anything he does with any other broker (illegally).
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FLMike
465 Posts |
Posted - 03/27/2008 : 10:26:23 PM
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quote:
Originally posted by windyctymktg
What about looking at a reverse mortgage for her?
That's a direction I would really look into.... I don't do them either, but I would seriously consider guiding them in that direction. |
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slants
2803 Posts |
Posted - 03/27/2008 : 10:34:18 PM
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quote:
Originally posted by Chris Clark
quote:
Originally posted by rtrefflich
He is no longer working for me and he has since moved out of state.
He was a 1099 but that doesn't matter, it is the fact that I was his broker
I agree with you, the judge should dismiss me, but it could be $5000 in legal fees or more. Riverside civil court is so backed up that these cases could drag on for two to three years
actually, that does matter. if he was 1099, he wasn't really your employee; he was an independent contractor.
being that he was an independent contractor, she really has no case against you from the standpoint of him putting her in a bad loan while he was working for you because he didn't work for you in the first place. (it's like being hit by a domino's pizza guy- if he's delivering pizzas, domino's has liability. but if he's not, they have no liability). in this case, you have no liability because he didn't work for you. had the loan been written through you, that is where the liability would have come into effect.
i would think you're probably getting a little confused about the whole broker / lo licensing issue. in the state's eyes, you'd have liability for any loans he does through you while he has his license parked with you. but you cannot have liability for anything he does with any other broker (illegally).
1099 is a tax filing status, not the employment relationship. One can be compensated under a 1099 but still be designated an employee and not be considered "self employed independent contractor" (even for realtor/LO borrowers trying to qualify for a loan). In CA the broker of record is the "employing" broker regardless how the employee's commissions are reported to the IRS and the employing broker is responsible for supervising the activities of all licensees working for him. That is obviously the grounds for naming you in the suit. This really sux. Anyone can sue you with or without merit and you must incur legal fees to defend yourself even if you aren't liable. |
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racerx
10171 Posts |
Posted - 03/27/2008 : 10:40:32 PM
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| And this is why it's BS when LO's want "100%" split. Brokers have a big liability. |
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terry_g
396 Posts |
Posted - 03/27/2008 : 11:05:27 PM
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I feel for you. I'm a CA broker also. People file lawsuits at the McDonald's drive-thru here. Bottom line is that whether your right or wrong, the legal system is such that when you're named as a defendant, you've lost. Nuisance suits are just meant to shake down the guys with the deep pockets and there's no shortage of lawsuits in CA. But it can be costly to bog yourself down with fighting for what's right. Sometimes a settlement without admitting wrongdoing can be a cheap way to go. Has she established damages? If so, how much?
It appears that her loan was something in the range of $150K +/-, is that correct? How long has she had the neg-am loan? Her payoff was around $40K. You said she "invested" the proceeds or did what she want to with the money. So even assuming that she would have been happy with a 5% fixed rate loan, for the period of time she had the loan, the worst case damages between all of the named defendants would be paid and/or accrued interest on the $110K proceeds at the difference between the best rate in town, plus closing costs, to the cr@appy loan she got from the other broker and the flaky loan officer. The 40K was already her problem. So the worst case damages (between all defendants) is what? 10K? 15K?
It seems logical to have your attorney (or some bulldog in your attorney's firm) take her deposition,and do a request for a "scorch the earth" production of every document she has relating to the deal, nailing her at every opportunity about her own culpability in the thing. How she honestly believed she was doing business with you? What she did with the proceeds? What rate she "should have gotten" and exactly how was she damaged? Nail her hard at the depo. Yeah, I know. She an older lady. Once that's done, you've set the upper limit of your liability. Then have your attorney do a settlement offer for $500-1000 conditioned on a full release of liability without admitting wrongdoing. You could add that you would assist in helping opposing counsel in nailing the other broker.
I would think you should distance yourself from ever doing a loan to replace that loan. It will just become another "putting a little old helpless lady into a bad loan", and you'll be the culprit. It's not your problem. She can just pay back the 110K proceeds and that reduces damages. Sure, probably some fast talking investment advisor talked her out of the proceeds and she doesn't have it, but it's pretty hard to prove that's damages also.
She's 70. In 3 years if it goes to trial, she's 73. $1000 now is better than taking a chance later that she "might" get something from you.
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Chris Clark
5861 Posts |
Posted - 03/27/2008 : 11:13:36 PM
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quote:
Originally posted by slants
1099 is a tax filing status, not the employment relationship. One can be compensated under a 1099 but still be designated an employee and not be considered "self employed independent contractor" (even for realtor/LO borrowers trying to qualify for a loan). In CA the broker of record is the "employing" broker regardless how the employee's commissions are reported to the IRS and the employing broker is responsible for supervising the activities of all licensees working for him. That is obviously the grounds for naming you in the suit. This really sux. Anyone can sue you with or without merit and you must incur legal fees to defend yourself even if you aren't liable.
actually, a 1099 is the irs tax form you use to report any monies that you pay to someone who is not employed by you for doing work for you. you cannot use a 1099 to report income of an employee; you must use a w-2. if you are paying someone with a 1099, they are self-employed and are not considered your employee (and this is not just tax law- if you own a brokerage you'd be best served reading up on the labor laws to see how this affects the relationship between you and your LOs).
i find it hard to believe that the CA DRE has it written in their code that you are responsible for the actions of any LO who has their license with you, even if they are breaking the law by working for another broker without your knowledge. if that's truly the case, then i would NEVER hire a loan officer to work for me because the risk would far outweigh the benefits. |
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bmoran
881 Posts |
Posted - 03/27/2008 : 11:19:26 PM
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Richard if what you are saying is true and I am not doubting you. I have someone who can help you with this. You are right, you have to defend yourself. However it should be reasonably easy. Just because someone had ther license with you and you are their broker thats doesnt mean that you are responsible for something they did outside your employment.
When he went to the other broker to close the loan he stepped outside your responsibilty.
I don't think you have much to worry about and I certainly wouldn't be negoiating with her in anyway, that just shows guilt.
If you call me in my office I can give you the name of someone who can help you with your lawsuit and with the DRE
Good luck |
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 11:24:58 PM
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I see where you are going Terry, it just wont work for a few reasons:
1) She took out something to the extent of $350,000 to $400,000, to the best of my knowledge the lady still has the cash, thats why the LTV would be so low if we could refi her and put the cash back in, I figure she would owe about $75,000 after all is said and done and the place is worth $500,000 or so (but that value keeps dropping every day)
2) Her attorney only sees the $$$ that she has as more business for him, and dragging this out longer for him is the best thing he can possibly do (this is my opinion of course, not fact) He wanted to, "get all parties involved in a big room and hammer out a settlement before it even went to court," this guy even told me, "don't worry about it, just call up your E&O and they will take care of it," like he has had a lot of experience shaking down a bunch of hard working brokers before
3) The lady was receiving money from her family to pay her bills before the loan took place and in any settlement with the "big money lender" they want some type of compensation of the $400 per month she was receiving from her family for the rest of her life or some BS like that (once again, he doesn't care because she has a bank full of money that he is charging her per hour on by "helping" her out, there is no way in hell this guy took this on a contingency)
4) A deposition will cost roughly $2000, which is what it will cost me to refi her house, given I don't have to pay the pre-pay (which there is no way in hell they will get me to do that) or any closing costs
5) Me just getting off of the suit admitting no liability but doing something proactive to get me out of it with no chance that she can come after me again for it will be the cheapest and quickest way off. Once again, in order for the case to actually go to trial it could take upwards to two years
quote:
Originally posted by terry_g
I feel for you. I'm a CA broker also. People file lawsuits at the McDonald's drive-thru here. Bottom line is that whether your right or wrong, the legal system is such that when you're named as a defendant, you've lost. Nuisance suits are just meant to shake down the guys with the deep pockets and there's no shortage of lawsuits in CA. But it can be costly to bog yourself down with fighting for what's right. Sometimes a settlement without admitting wrongdoing can be a cheap way to go. Has she established damages? If so, how much?
It appears that her loan was something in the range of $150K +/-, is that correct? How long has she had the neg-am loan? Her payoff was around $40K. You said she "invested" the proceeds or did what she want to with the money. So even assuming that she would have been happy with a 5% fixed rate loan, for the period of time she had the loan, the worst case damages between all of the named defendants would be paid and/or accrued interest on the $110K proceeds at the difference between the best rate in town, plus closing costs, to the cr@appy loan she got from the other broker and the flaky loan officer. The 40K was already her problem. So the worst case damages (between all defendants) is what? 10K? 15K?
It seems logical to have your attorney (or some bulldog in your attorney's firm) take her deposition,and do a request for a "scorch the earth" production of every document she has relating to the deal, nailing her at every opportunity about her own culpability in the thing. How she honestly believed she was doing business with you? What she did with the proceeds? What rate she "should have gotten" and exactly how was she damaged? Nail her hard at the depo. Yeah, I know. She an older lady. Once that's done, you've set the upper limit of your liability. Then have your attorney do a settlement offer for $500-1000 conditioned on a full release of liability without admitting wrongdoing. You could add that you would assist in helping opposing counsel in nailing the other broker.
I would think you should distance yourself from ever doing a loan to replace that loan. It will just become another "putting a little old helpless lady into a bad loan", and you'll be the culprit. It's not your problem. She can just pay back the 110K proceeds and that reduces damages. Sure, probably some fast talking investment advisor talked her out of the proceeds and she doesn't have it, but it's pretty hard to prove that's damages also.
She's 70. In 3 years if it goes to trial, she's 73. $1000 now is better than taking a chance later that she "might" get something from you.
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rtrefflich
1732 Posts |
Posted - 03/27/2008 : 11:26:15 PM
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Thanks, I will call you tomorrow
quote:
Originally posted by bmoran
Richard if what you are saying is true and I am not doubting you. I have someone who can help you with this. You are right, you have to defend yourself. However it should be reasonably easy. Just because someone had ther license with you and you are their broker thats doesnt mean that you are responsible for something they did outside your employment.
When he went to the other broker to close the loan he stepped outside your responsibilty.
I don't think you have much to worry about and I certainly wouldn't be negoiating with her in anyway, that just shows guilt.
If you call me in my office I can give you the name of someone who can help you with your lawsuit and with the DRE
Good luck
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slants
2803 Posts |
Posted - 03/27/2008 : 11:31:50 PM
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quote:
Originally posted by Chris Clark
quote:
Originally posted by slants
1099 is a tax filing status, not the employment relationship. One can be compensated under a 1099 but still be designated an employee and not be considered "self employed independent contractor" (even for realtor/LO borrowers trying to qualify for a loan). In CA the broker of record is the "employing" broker regardless how the employee's commissions are reported to the IRS and the employing broker is responsible for supervising the activities of all licensees working for him. That is obviously the grounds for naming you in the suit. This really sux. Anyone can sue you with or without merit and you must incur legal fees to defend yourself even if you aren't liable.
actually, a 1099 is the irs tax form you use to report any monies that you pay to someone who is not employed by you for doing work for you. you cannot use a 1099 to report income of an employee; you must use a w-2. if you are paying someone with a 1099, they are self-employed and are not considered your employee (and this is not just tax law- if you own a brokerage you'd be best served reading up on the labor laws to see how this affects the relationship between you and your LOs).
i find it hard to believe that the CA DRE has it written in their code that you are responsible for the actions of any LO who has their license with you, even if they are breaking the law by working for another broker without your knowledge. if that's truly the case, then i would NEVER hire a loan officer to work for me because the risk would far outweigh the benefits.
The CA DRE specifically has it written in their code that a broker is responsible for supervising the activities of any agent who works under the broker's license. It also specifically and over and over again describes the broker as the "employing" broker. The fact that the agent conducted illegal or unethical activities outside of the broker's supervision needs to be presented at trial; however, it takes time and money to get to trial. Regardless of the 1099'd commissions, the labor board has a record of accepting claims on behalf of agents over payroll disputes as the method of payment does not establish their employment status, but the nature of their employment does. You'd be best served to know these facts if you own a brokerage. I have processed many loan app's on behalf of LO's and realtors, and despite their 1099 payroll status, the lenders also view them to be employees of the firm unless they are owners of the company and "self employed' may not be checked even though they are paid 1099. |
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terry_g
396 Posts |
Posted - 03/27/2008 : 11:33:39 PM
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A broker is supposed to supply a notice of the agent's termination within 10 days of the termination of the agent. The writer didn't know this guy was skating the deal (and probably others) to another broker, and/or in any event the change form wasn't supplied to DRE while this brokerage activity was going on.
If you're talking about a hearing before DRE, they know the drill and it wouldn't go anywhere. But it's a civil litigation. The opposing attorney is looking for deep pockets and has just enough of a shred of something to give an excuse to name him as a defendant and the "little old lady" offense helps make for fancy complaint filing, where she could find a reason to name the mailman for delivering the mortgage statement.
But as a practical matter, he needs to make this go away fast. Sure he had nothing to do with any wrongdoing, but what's right and what's practical is sometimes 2 different things. I say make it tough on the woman in a depo under oath, and get her to set the upper limit of damages so it can't be overblown later. Then settle for a couple bucks because he's being a nice guy and feels badly for her... without admitting wrongdoing... and a full release.
quote:
Originally posted by Chris Clark
quote:
Originally posted by slants
1099 is a tax filing status, not the employment relationship. One can be compensated under a 1099 but still be designated an employee and not be considered "self employed independent contractor" (even for realtor/LO borrowers trying to qualify for a loan). In CA the broker of record is the "employing" broker regardless how the employee's commissions are reported to the IRS and the employing broker is responsible for supervising the activities of all licensees working for him. That is obviously the grounds for naming you in the suit. This really sux. Anyone can sue you with or without merit and you must incur legal fees to defend yourself even if you aren't liable.
actually, a 1099 is the irs tax form you use to report any monies that you pay to someone who is not employed by you for doing work for you. you cannot use a 1099 to report income of an employee; you must use a w-2. if you are paying someone with a 1099, they are self-employed and are not considered your employee (and this is not just tax law- if you own a brokerage you'd be best served reading up on the labor laws to see how this affects the relationship between you and your LOs).
i find it hard to believe that the CA DRE has it written in their code that you are responsible for the actions of any LO who has their license with you, even if they are breaking the law by working for another broker without your knowledge. if that's truly the case, then i would NEVER hire a loan officer to work for me because the risk would far outweigh the benefits.
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kjdv
548 Posts |
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