DOWNEY — Twelve years ago, when Beatrice I. Criswell borrowed $5,844, she never thought she would end up owing more than $124,000 and lose her home.
She used the loan to pay off property taxes. Then she took out loan after loan against her two-bedroom house on Brock Avenue, each time borrowing to meet the balloon payment due on the previous loan. All told, Criswell and her attorney say, she used about $9,000 of the money she borrowed over the years; fees and interest on the short-term loans devoured the rest.
The slight, 77-year-old woman, who is legally blind, now spends her days hoping that a benefactor will stay her eviction from the house, where she has lived since 1949.
On Sept. 15, Criswell was given her final five-day notice to vacate. But eviction has been delayed until Oct. 8, and attorney Catherine Grant is trying to find a "philanthropic investor" so that Criswell can stay in her home for the rest of her life.
"I've lived here so long--why, if I can't live here, they (can) carry me out the door in another manner," Criswell said earlier this week.
Grant concedes that there is no evidence of wrongdoing, no grist for a lawsuit. But she questions why Criswell was not stopped from taking out loans that had balloon payments she could never meet with her Social Security income.
"Real estate brokers I've spoken to consider these practices unethical," said Grant, an attorney with Community Legal Services in Norwalk. "They could countenance doing a short-term loan like that between two escrows, but not as a means of refinancing a home someone intends to live in."
Criswell, who lives with her disabled sister Vada J. Anderson, 85, can't read a business card, but she moves easily around her tidy home, which is decorated with a prized collection of scores of dolls. Criswell said she receives $612 a month from Social Security and her sister about $500.
Homeowner's insurance paid the mortgage on the house after her husband's death in 1973, Criswell said, but care for her husband had drained her financially, and she was delinquent on her property taxes when she borrowed the $5,844 through Aames Home Loans in Los Angeles in May, 1975.
Series of Loans
Grant pieced together the following loan history from trust deeds:
In June 1975, Criswell borrowed $10,400 through Aames to pay off the first loan. She borrowed $3,800 through Aames in 1976, and another $3,300 in 1979.
In 1981, Aames arranged a $16,000 loan for Criswell, which she used to pay off the $10,400 note. A year later, she borrowed $16,000--her final loan from Aames--and paid off the $3,800 and $3,300 notes.
"They would send me to another lender," Criswell said. "They couldn't (make another loan), but another one could."
The other lender was Vista Mortgage Corp. of Anaheim, which arranged a $56,000 loan for Criswell, enabling her to pay off the two $16,000 loans from Aames.
Then came a $76,000 loan from a group of private investors in 1984 and, finally, a $105,000 loan through Sterling Home Loans Inc. of Orange in 1985.
Criswell steadfastly maintains that she spent only about $9,000 of the borrowed money. She said she paid off her property taxes with the first loan and used some of the other money to replace windows and carpets in her house.
"It was just through desperation that it was all done," Criswell said. "There was no way in the world with the income I had I could pay it off. I just kept thinking there was some way I could do it."
Criswell acknowledged that she could have sold the home to pay off her debts and escaped with some of the equity. But given her decades-long attachment to the house, she said, "I just couldn't make myself do it."
Dr. Seymour Alban, a Long Beach orthopedic surgeon, invested money from his medical group's pension fund in the 1985 loan to Criswell. As trustee of the pension fund, Alban said, he had previously invested in mortgage loans through Sterling and had always been repaid promptly.
But this time it was different. Alban filed a notice of default and in August, 1986, acquired the house in a foreclosure sale for $124,000.
Sterling President Donald Lyons said his firm arranged the six-month loan with fair interest rates and competitive loan costs. To protect Criswell's privacy, Lyons said, he could not reveal those charges. Criswell said she does not remember the costs and does not have the papers she signed.
"Originally, her representation was she would sell the property in question," Lyons said. "She represented to us that her need was a short-term need."
Alban initiated eviction proceedings, and last November a Downey Municipal Court judge awarded Alban possession of the house and more than $2,800 in rental fees. But Alban delayed the eviction, and Criswell paid him $5,000 from her savings to stay in her home, said Grant, her attorney.
"I didn't want her house; I just wanted pension fund money to return," Alban said. "I hoped she would sell her house or get some other financing."