California Homeowner Seeking Home Equity Refinancing Gets Cleaned Out In Equity Stripping Deal

In American Canyon, California, the Los Angeles Times reports:

• Three years ago, Donna Robbins tried to use her soaring equity to remodel her house in this Napa Valley community.Instead, she says she got cleaned out. Robbins claims that friends from church who ran a finance company agreed to arrange a home equity loan to pay for a new kitchen, bathrooms and landscaping.

• As with most financial transactions, there were papers to sign. But Robbins says that what she was told were loan documents were in fact papers that transferred the title to her property. These new owners subsequently defaulted on the mortgage, according to public property records and a lawsuit Robbins filed in Napa County Superior Court. Now, the house she had inherited from her parents is in foreclosure and Robbins is facing eviction, along with her boyfriend and their seven children.

For more, see Compounding the pain (Allegations of mortgage fraud are on the upswing).