81 year-old SF resident files lawsuit to stay in longtime Haight home
An 81-year-old woman is suing to keep her $1.4 million condominium in San Francisco’s Upper Haight district, saying she fell victim to a “deceptive, fraudulent and predatory scheme” that caused her to lose her home.
Rosemarie Benter filed a fraud and elder financial abuse complaint Sunday night against Redwood city mortgage adviser Laura Biche and San Carlos real estate broker Michael Bruno, accusing them of an intricate conspiracy that led to the foreclosure of an upstairs unit she purchased in 1991, in a cream-colored Victorian near the Panhandle. Benter said she lost the home after failing to pay a loan worth less than $10,000, unaware that she had used the condominium as collateral.
She submitted the lawsuit to San Francisco Superior Court three days after the new owner of her condominium, Eugene Gardner, taped a notice to the door, giving Benter three days to clear out.
Gardner’s attorney said he bought the home lawfully by placing a $138,000 bid at a foreclosure sale, and that he will have to pay the balance of Benter’s $735,000 mortgage, up to $40,000 to service the mortgage, and $10,000 a year in property taxes and homeowner association dues, coming to about $4,000 a month.
“My client’s intention is to live at this property,” attorney Joanna Kozubal wrote in an email, “however, if Ms. Benter wants to buy it back my client is willing to negotiate.”
Reached by phone on Monday, Biche declined to comment. Bruno and representatives of Golden West Foreclosure Services did not immediately return phone calls seeking comment.
For Benter, the trouble began in 2007, when she took out a reverse mortgage — a type of loan that allows older homeowners to cash in on the equity they have built up, on the condition that they stay in the dwelling and pay property taxes.
Thirteen years later, a series of health issues and home maintenance costs plunged Benter into debt, and she fell behind on her property taxes. Seeking to use some of her home equity to cover her $5,000 property tax bill, Benter reached out to Biche, who persuaded her to apply for an $8,000 refinancing loan. Biche handled the application but Benter never secured the refinance, and in April 2021 she defaulted on her reverse mortgage when she did not pay property taxes.
After repeatedly assuring Benter that the refinance would eventually come through, Biche convinced the plaintiff to take out a $9,519 loan from Bruno, who Biche described as a trusted friend, according to the lawsuit. She said that Benter could use the funds anticipated from the refinance to pay Bruno back, and “assured (the) plaintiff there was no risk of losing her home in this situation,” the lawsuit said.
“Plaintiff did not understand that her home would be used as collateral and that she would be at risk of losing her home if she failed to make payments on the loan,” the complaint said, adding that Biche facilitated all the signing of documents for the loan from Bruno’s company, Cal-West, and that Benter never met Bruno.
Biche and Bruno did not tell Benter that her home would enter foreclosure proceedings if she failed to repay the loan, the complaint said. In May of last year, Benter suffered a stroke and was diagnosed with breast cancer, which left her drowning in medical bills. By October 7, her loan — with late fees and interest at an 8% rate — had ballooned to $11,387, and her property had been transferred to Golden West Foreclosure Services.
Around this time she was “inundated with mailings,” the complaint said, mostly from scammers but one from the San Francisco Assessor-Recorder offering “loss mitigation options” to prevent the foreclosure. Biche told Benter to ignore all of them, the complaint said, and because Benter followed Biche’s advice she missed an opportunity to receive $20,000 in homeowner assistance funds to cover her property taxes.
Her home sold for $13,000 — less than .01% of its value — at a foreclosure auction on Feb. 2, but then was put up for sale again under a new California law that provides 45 days for tenants, owner-occupants, or affordable housing nonprofits to exceed the highest bid at a foreclosure sale, aiming to protect residents from displacement keep properties from sitting vacant.
Although the San Francisco Community Land Trust submitted a bid, the condo was eventually sold to Gardner, a 52-year-old resident of San Francisco’s West Portal neighborhood.
Gardner, who is also named as a defendant in the lawsuit, bought Benter’s home for $138,000. He is now trying to evict her.
Benter and her lawyer, Darren Orr of the Mission nonprofit Legal Assistance to the Elderly, believe that “because the loan was void and unenforceable,” the foreclosure was wrong. They want a judge to declare Benter the sole owner of the property.
Source: San Francisco Chronicle
