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Loan Discrimination Debate Continues

September 12, 1993

I was disgusted by a letter in Robert Bruss' July 25 column ("Former Loan Agent Reveals Ways Lenders Disguise Discrimination").

The writer admits that he and his company committed felony crimes in discriminating against minorities in the issuance of home loans and indicts the entire industry with no link of the activities to discrimination. The writer's comments are irresponsible as well as unrepresentative of the professionals in the mortgage industry.

The letter is dangerous in that it continues the self-fulfilling prophecy of discrimination--it is likely to increase the attribution of any negative action to discrimination.

And the charges of discrimination fly against logic. Most commissioned loan officers are more motivated by the commission dollars they earn if and only if the borrower is successful in obtaining financing.

Further, the letter writer confuses efficiency with discrimination. The writer demonstrates that he was selective in the loan applications that he receives, indicating an unwillingness to "waste his time." Finally, his recommendation that the lady "file a discrimination complaint" shows the recklessness with these charges in general--there is no proof of discrimination offered.

Most of the professionals in the loan business are interested in helping as many homeowners as possible finance as many homes as possible so they can make the most commission dollars possible.

The anonymous letter writer did everyone a service by leaving the industry.

WILLIAM GROSS

Division vice president, CTX Mortgage Co.

Diamond Bar

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Thank you for your article regarding subtle forms of loan discrimination. Recently, I applied for a loan with a large mortgage corporation and we were denied a fixed-rate loan. When I received the denial notice, I was upset and thought it was the incompetence of their staff and wrote them a letter expressing my dissatisfaction.

After reading your article, I truly believe it was a form of subtle loan discrimination. I will take your advise, contact the Department of Housing and Urban Development and request Fair Housing Form HUD-903 to file a complaint.

We took our loan package to another bank and it was approved.

SANDRA DAVENPORT

Fontana

'Tenants From Hell' Story Helps Bad Guys

Well, thanks a million for the step-by-step guide on how to defraud landlords as outlined in "Tenants From Hell" by Stephanie O'Neill in the Real Estate Section (Aug. 8). In case those "professional deadbeats" who knowingly scam property owners missed a possible gouge, this article will provide a needed update.

LILLIAN TRUBERT

Lake Mathews

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As I was indirectly the subject of an Aug. 8 article ("Con Art Tenant Coolly Poses as a Serious Executive") concerning "Tenants From Hell" I would like to clarify a point that may have great significance for landlords in dealing with deadbeat tenants.

As the landlord, I never attempted to cash the check that I received from my prospective tenant but simply attempted to verify the funds, by telephone, from the bank through which it was drawn. The legal principle that landlords should be aware of is that by simply accepting the check, even in the absence of a signed lease, that landlord has committed himself to a lengthy and costly unlawful detainer action should the check prove to be uncashable.

Unlike many standard business contracts that contain recision clauses or specifically outline remedies for breach, the standard real estate lease offers no expeditious solutions to residential landlords who simply want to regain custody of their own property. I do not profess to be expert in the area of real estate law but did consider myself reasonably familiar with residential leases having owned other income properties. What I did not know and what became such an expensive education for me was the extent to which current real estate law and court decisions so unfairly favor tenants over landlords.

CHRISTOPHER RESTAK

Santa Monica

Risk to Sellers Carrying Back 2nd Trust Deeds

As a real estate litigation attorney, I took interest in your Aug. 1 article "Precautions in Taking Back Trust Deed" by Benny L. Kass.

The article contained a misstatement about the right of sellers who carry back a second trust deed to sue for a deficiency judgment after the first trust deed holder has already foreclosed on the property.

Kass states: "A second deed of trust means that you are in a second position to find a first trust lender. If the first trust lender forecloses, and there is not enough equity in the house to pay off your second trust, your trust will be wiped out." This is a true statement. My problem lies with his next statement: "While you still have the right to sue the person who bought your house under the promissory note, obviously if they are in financial difficulty, this right to sue will be meaningless."

Although this may be true in other states, it is not true in most cases with respect to California law.

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