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By Matie Singh |
Immediately, Suresh contacted his good friend and cricket buddy, Brian Rawh of First Class Realty, Lefferts Boulevard, Richmond Hill, to execute the transaction.
Rawh recommended Jeffrey Diamond of Diamond and Diamond to be the purchasers' legal representative and Rahim Ali, of Olympia Mortgage, for the required loan of $385,000.
"We made them understand that the purchase of this new property depended on the sale of my current house. We also let Rahim know that the property would be taken only if we get 7% interest rate, based on the three buyers' salary," Radha said in an exclusive interview.
The purchasers made a down payment of $10,000 to an escrow account held by Baljit Etwaroo, the seller's (Sasenarine and Premwantie Ghansiam) attorney.
Ali then ran the credit report and found that Suresh had bad credit. "Rahim said that he can fix it (the bad credit report) with certain documents," Radha said.
All the documents were then signed in front of Rawh.
"[Again] we stressed the 7% work-up. We stressed that we must be informed at all times," Radha continued. Assuming all was well Radha and her family left for a two-week vacation to Florida.
On July 16, 2001 Radha, Savitri and Suresh found out that they had not qualified for the loan. Savitri immediately called Ali, who said, "We have a commitment but with Radha only, with a 9% interest rate".
Immediately Radha panicked. "I said, 'Mr. Ali, you know I cannot afford this house by myself at a 9% interest rate. The mortgage is over $3000 a month. Show me how I can pay over $3000 a month and survive on my kind of salary," Radha asked during one of their meetings. "I live from paycheck to paycheck. I cannot accept this, so please don't do anything with that commitment," Radha told Ali referring to the still unseen and unsigned document.
Radha was baffled by the fact that with her low salary she alone was qualified for the loan whereas three people with a much greater combined salary were not.
"To be able to apply for the loan in my name only he [would] need to have my amended contract saying that I am the only party buying the house," Radha stated. "He must have my consent...which he [has] never received. They all said that it is not important to sign a commitment"
Responding to Radha's query the real estate agent, Brian Rawh "said, he already faxed the contract to Baljit and Diamond," Radha explained.
Continued Radha said, "I have called Diamond and spoken to his secretary, Jenny, to let him know that we are refusing the commitment; that I alone cannot pay that mortgage at 9% interest rate."
"The mortgage
will be $36,000 annually, and Radha makes $30,000 annually, go
ahead you do the math," said Harry Persaud of Harry Home
Sales. "One would need to make at least $90,000 annually
to be able to purchase a property that is worth $385,000"."This sale could have gone through because the real estate broker gets $26,000, the mortgage broker gets $50,000 and the attorney will get paid," added Persaud. "Radha will be left with the property, which would have [been] foreclosed. In other words they would have robbed Radha and her children, and the government."
"Rahim never once called us. We were doing all of the calling. Only the real estate broker (Rawh) would call to say that 'everything is fine...nothing to worry about.' He never told us of any problem," Radha said.
According to Radha, Savitri called Rawh and said 'Brian you call Baljit Etwaroo and ask him how we can get our $10,000 back and solve this problem.'
Rawh, replied, 'Baljit wants a denial letter."
So they called Rahim Ali, who said he 'would give it to us immediately," Radha added.
"When Baljit received the denial letter he said that 'it won't work' because we already have a commitment,'" said Radha.
A call was place to Diamond's office. His secretary Jenny told Radha, "Mr. Diamond said that 'this is a closed deal. We do not have this case' and they do not know who has this case," radha said. "She added that I should call Totaram" .
When contacted Totaram indicated that the sellers "wanted a concession of $2500, because they had to get the tenants out," Radha stated. "
"On either the 19th or 20th of July, I finally got Diamond on the phone and he said in a rush 'don't worry about it, don't worry about it. I will take care of it. I think the sellers want about $800' and hung up" she added.
At this point, Persaud, on behalf of the Radha took the matter to the district attorney's office and sent a letter to the New York Bar Association. The district attorney's office advised him that, 'the best way to handle this [matter] is by taking them to court.'
With the help of Persaud, Radha and her children got the summons and took them to court on Jan 2nd, 2002.
Persaud then went to Rahim Ali's office and asked him to give the lady back her money but was told that "Etwaroo is holding the money".
Persaud then called Diamond, who said, "'I told Etwaroo to give back Radha's money.'" But "Etwaroo would give [the] money back (only) if he gets back $3,500 to cover money lost from 'evicted tenants," added Persaud.
But he explained that since "one is not sure if the buyer will get the mortgage or not, therefore, the tenants don't have to move out. Baljit Etwaroo misused his office and license".
On Feb. 26, 2002, the case was called up again. Present at the court hearing was Etwaroo with his attorney and Diamond's attorney Haley Greenberg. Rahim Ali and Brian Rawh did not show up.
"The judge advised us to subpoena the corporations that Brian and Rahim owns, and Jeffrey Diamond to serve as my witness," Radha continued.
"Diamond's attorney wants Diamond out of the liability and to have him as a witness. Radha agreed." Persaud added.
The final hearing is set for April 24, 2002. "If Baljit Etwaroo does not show up, he will be sued by the judge to hand over the money," Persaud said. "The house has been sold since Nov.'01. The seller, now living in Florida, is protecting Etwaroo. They manufactured evidence with the sellers that he now wants compensation that Radha voided the contract. Radha did not breach any contract," said Persaud.
"Legally, the sellers can tell the attorney not to give the money back, but they must have a good reason," Persaud explained.
"Time of Essence" law allows a buyer forty-five days to get the loan from the date of the contract and seventy-two hours to return the keys and cancel the deal if you are not satisfied after the sale. Forty-five days have gone and no one talks about getting the mortgage. The contract strength lies with getting the mortgage. No mortgage.no contract!" Persaud added.
Several unanswered messages were left for Brian Rawh and Jeffrey Diamond.
Rahim Ali became very annoyed and refused to answer specific questions.
In an interview with The Caribbean Voice's editor-in-chief, Annan Boodram, Baljit Etwaroo said Radha was in breach of contract because "she got the mortgage but she refused to close".
When asked him how could a contract to buy have been entered into when the buyers did not yet have a loan, he said the contract was an intention to buy and would not have been valid if the buyer had been disqualified from obtaining a loan.
He said that his client "is entitled to damage" and is "trying to quantify his losses".
He also said "I'm going to put the money in court and let them fight over it".
Wanting to seek clarification as to whether a contract entered into with three prospective buyers would still be valid if two of the prospective buyers were disqualified, this writer attempted to reach Mr. Baljit Etwaroo whose promised return-call have still not materialized.
July 2002: A Queens woman, whose escrow money was withheld
by the homwowner's lawyer won a judgment at the final hearing
of her case on April 24, 2002. A sum of $10,970 was awarded to
Radha and family, to cover cost, disbursements and interest,
if applicable.
In May 2001, Radha, Savitri, Suresh (names changed to protect
identity) went home shopping. Their search led them to a property
at 107-33 117 Street, in Richmond Hill, Queens.
Immediately, Suresh contacted a friend, Brian Rawh of First Class
Realty, to execute a purchase transaction. A firm understanding
that the purchase of this new property clearly depends on the
sale of their old house was made.
"The property would be taken only if we'd get a 7% interest
rate, based on the three buyers' salary," said Radha, in
an interview.
$10,000 was deposited into an escrow account, which, in this
case, was held by Baljit Etwaroo, the seller's (Sasenarine and
Premwantie Ghansiam) attorney.
Due to a bad credit report Suresh and Savitri were immediately
disqualified. However, the mortgage broker qualified Radha alone
for a mortgage at a 9% interest rate. But Radha claimed that
she was never informed beforehand about this new arrangement
and no new contract was ever drawn up listing only her as the
buyer.
"He must have my consent... which he never received,"
Radha stated.
And she was quite emphatic that she would not have been able
to pay the mortgage on her salary alone.
"Real estate law says that you have to see the credit of
the buyer, [and] value of their income before beginning any paper
work, especially for first time buyers," explained real
estate expert, Harry Persaud, of Harry Home Sales, when asked
for his professional opinion. "Radha and the children were
denied because of insufficient income and past delinquent credit.
"
According to Radha, Savitri called Rawh and said 'Brian you call
Baljit Etwaroo and ask him how we can get our $10,000 back and
solve this problem.'
Rawh, advised them that the lawyer, Etwaroo, wanted a denial
of letter from Rahim Ali, of Olympia Mortgage, (the mortgage
broker handing the loan application).
Ali who said he "would give it to us immediately,"
Radha claimed. Radha immediately called back the lawyer who,
at that point, told her, "'Mrs. Persaud I am sorry but,
due to ethics, I cannnot speak to you".
Then he "put down the phone," added Radha. However,
Etwaroo did say that he could speak to Radha through her attorney.
"When Baljit received the denial letter he said that 'it
won't work' because we already have a commitment. Then, how can
we have a denial letter?'" Radha asked.
The lawyer's reason for with-holding the money was that he was
so advised by his client, who was claiming costs for rent loss
prior to him getting the house sold to another buyer. The house
was sold in November 2001.
"They gave her a commitment on July 26, 2001, and a subsequent
denial on July 23, 2001," Persaud said, finding it rather
humorous. "Unfortunately they are Guyanese doing this to
another, poor, Guyanese person."
Subsequently Radha, through Harry Persaud sued for her money.
And on April 24, the court offered judgement to Radha to the
tune of $10,970.
According to Harry Persaud this case has been a learning experience
for all involved. Presently Persaud is seriously contemplating
a lawsuit against Etwaroo for "mental stress, aggravation"
and for causing "tension among family members."
Editor's Note: When this story was being put together the first
time, the real estate company, First Class Realty, and the mortgage
company, Olympia Mortgage, were contacted but both refused to
talk to this paper. After the story was published a representative
of Olympia Mortgage called the this paper to complain that what
was stated in the article was untrue. But he never offered to
provide clarification and/or to indiate what was untrue.
Targetting
Housing Scams
New York City Council leaders have introduced a bill today aimed
at curbing a loan scam that often costs borrowers their homes.
The most frequent victims of a practice known as predatory lending
are seniors and low-income homeowners, many of whom are from
minority groups, according to backers of the new bill.
By promising low-interest mortgage loans, lenders induce homeowners
to borrow money for home repairs, bills and other pressing needs.
But with the loans come a slew of hidden fees, prepayment penalties
and other conditions that are designed to make the unwitting
borrowers miss mortgage payments and end up losing their homes
through foreclosure.
The legislation is intended to curb predatory lenders by going
after their sources of financing. Under the bill, the city controller
would be authorized to bar banks or corporations from doing business
with the city if they persist in being directly or indirectly
involved in predatory lending.
The bill would require companies doing business with the city
to certify they, as well as their subsidiaries, aren't engaged
in predatory practices. Violators would be given a chance to
take corrective action before losing city business.
Similar laws have been passed in Philadelphia, Chicago and Washington.
Disclosure Act
A new New York State law requires home sellers to disclose known
defects to prospective buyers. Although sellers are not required
to make any repairs, they are obligated to tell the buyers everything
they know about any structural, mechanical or environmental problems
the house might have.
The Property Condition Disclosure Act covers all one- to four-family
dwellings except cooperative apartments, condominiums and new
construction. It applies even when there's no real estate agent
involved.
Homebuyers who discover problems with a house could sue a seller
who knowingly makes false or incomplete statements on the disclosure
form after the sale. And sellers who refuse to complete a disclosure
form are required to give the buyers a $500 credit at closing.
But think twice about buying from sellers like that. There's
probably a significant defect if they're unwilling to complete
the disclosure form - and even $500 might not be enough to correct
it.
If the agent involved in the sale failed to tell about the structural
problems, you may have recourse by filing a complaint with the
state's Department of State, which licenses real estate professionals.
The agent's license could be suspended or revoked, or she could
be fined and ordered to make restitution to the buyer. You can
get a complaint form by calling (518) 474-4429.
Good Faith Estimate and Truth in Lending
Real estate companies often suggest to purchasers the names of
contractors to bring the building up to code. They also often
suggest names of inspector, who usually pass buildings that have
poor electrical wiring, inadequate support beams, and bad plumbing
work that an untrained eye couldn't evaluate.
The Better Business Bureau reports that in the year 2000, 2,902
complaints were made against mortgage and escrow companies. Out
of 1,000 types of businesses tracked, mortgage and escrow firms
rank 30th in the number of complaints received. According to
expert Joe Cuttone, president of American Fidelity Mortgage Services
Inc. in Wheaton, Illinois, anyone who is thinking of purchasing
a home, or even refinancing an existing one, needs to know what
to watch out for.
'All fees are to be outlined on both the Good Faith Estimate,
which states interest rate, amount of mortgage, and loan terms,
as well as all fees, and the Truth in Lending form which breaks
down the total financial evaluation," explains Alice Long,
a processor for Citimortgage in Farmington Hills, Missouri. "It
is mandated by law that a customer receive these forms within
72 hours of filling out the initial forms"
These fees are technically only hidden from the consumer by how
they are presented or explained. When you receive the Truth in
Lending forms it is important to compare notes from your initial
meetings to make sure everything is presented exactly how you
previously discussed it.
Prospective home buyers with poor credit ratings are considered
high-risk customers. Unfortunately, they are the most at risk
for unscrupulous lending practices. There are mortgage companies
that target these clients specifically because they are easy
marks for excessive fees. One way to raise the cost of a mortgage
loan to the consumer is by charging high points on the loan.
Since one point equals 1% of the loan amount, what is a fair
amount of points to charge? "
"One percent to 3%, depending on the size of the loan,"
says Cuttone. There are mortgage lenders who will charge up to
7%. Because factors vary from state to state and from person
to person, consumers should research the terms of a loan before
signing.