Consumer complaint received 2018-02-23
Company: CAPITAL ONE FINANCIAL CORPORATION
State: PA
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Closing on a mortgage

Complaint:
On XX/XX/XXXX my parents took out a loan with XXXX XXXX ( XXXX XXXX ) for {$35000.00}. 
OnXX/XX/XXXX I was added as a 3rd owner on the deed of my parent 's house. It was recorded onXX/XX/XXXX. 
on XXXX XXXX XXXX ( Capital One ) granted my mother a {$50000.00} loan.It was recorded on XXXX on XXXX XXXX XXXX ( Capital One ) granted my mother an {$80000.00} loan. It was recorded on XXXX. 
on XXXX my father passed away on XXXX my mother passed away on XXXX I met with a probate attorney to finalize my mother 's estate. After a quick search, the attorney found the {$80000.00} recorded mortgage. That was the first I was hearing of the loan. I knew I was added to the Deed in XX/XX/XXXX,  and I knew I never signed any documents even though I should have. 
XXXX Letters of foreclosure began to arrive, but I had not been made the Admin of my Mother 's Estate yet. I also hadn't sought counsel yet. To keep foreclosure at bay, I made one payment of {$1300.00} to give myself time to finalize the estate and find a Real Estate Attorney. 
XXXX I met with my Real Estate Attorney for the first time to begin appropriate litigation. 

After the standard back-and-forth, Capital One admitted that the two mortgages were " unenforceable '' because I, as a 1/3rd owner, had not been made aware of - or asked to sign - any documents. 

Capitol One is countersuing me for {$35000.00} via a " Faith In Equity '' lien. Their argument is that while the {$50000.00} loan WAS not enforceable, it did pay off the XXXX XXXX XXXX ( XXXX XXXX ) loan that existed 11 years prior to my being added to the deed. 

The ACTUAL payoff amount of that loan was {$17000.00} per the signed HUD-1 from the closing. This HUD is only signed by my mother when, in fact, my father ( who is included on the loan documents ) should have signed the HUD ( RTC, TIL, and Riders ) as her spouse. My signature is obviously missing as well given I was never told any of these loans were taking place. Funding these loans off of this HUD-1 is a violation of U.S. Code Section 1001 and Section 1010 ( per the HUD-1 that was signed by the Settlement Agent from XXXX XXXX XXXX XXXX which no longer exists ). These same circumstances were repeated almost a year later when XXXX sold my parents the {$80000.00} loan. The {$80000.00} unenforceable loan paid off the {$50000.00} unenforceable loan. 

On the date of the {$50000.00} loan, my mother was a XXXX  year-old retired woman. My father was a XXXX   year-old retired man. On the date of the {$80000.00} ( 10-year interest only loan ), my mother was XXXX, and my father was XXXX. The {$80000.00} mortgage, being interest-only, meant that their monthly payment would be well over {$1000.00} starting in XX/XX/XXXX. Were they alive, they would be XXXX and XXXX respectively. I believe my parents were the victims of predatory lending practices. 

The initial search done by the Abstractor would have included the XX/XX/XXXXDeed that showed my parents and I as the owners. The bring-down at funding would also have pulled the XX/XX/XXXX Deed. Neither of these loans should have funded without all three of our signatures on the " funding docs '' ( 1st and last pages of the Mtg, RTC, TIL, HUD and any riders ). 

So far, my rights as an owner were violated twice by the two mortgages and Capital One now wishes to victimize me a third time by asking me to pay {$35000.00} on a {$17000.00} pay off for a loan from XX/XX/XXXX. Furthermore, the {$50000.00} loan was paid off by the {$80000.00} illegal mortgage. My parents never missed a payment on the {$50000.00} loan having paid {$6800.00} before being sold the {$80000.00} loan. As well, my parents paid {$7300.00} in fees towards the predatory/unenforceable loan. It hardly seems fair that they should pay fees to be victimized. 

I certainly shouldn't have to pay a cent for the mistakes made by XXXX ( Capital One ), XXXX XXXX XXXX XXXX, and the underwriter of the lender 's policies. They ignored my rights as an owner and stand in violation of U.S. Code. I did nothing wrong. 

My parents had automatic payments withdrawn monthly for nearly 9 years. They paid {$6800.00} towards the {$50000.00} loan, and they paid in the area of {$25000.00} towards interest-only on the {$800000.00} loan. Their wanting me to pay them {$35000.00} on a {$17000.00} payoff is criminal. How many times can I be victimized by this Bank? 

I understand " Faith in Equity '' liens have legs. I believe a significant number of situations like mine involve a spouse being excluded on the loan. My attorney sites one example where a husband and wife had an initial mortgage together where they both signed. They separated at some point, and the husband went on to forge her signature on a series of loans reaching over a XXXX. Her " good faith '' was that she did initially sign and agree to be financially responsible for the first mortgage they took out together. The second loan - while fraudulent - did pay off a mortgage that she knowingly and willingly signed which obligated her to repayment of that loan. The forged loans obtained by the husband never had a history of payments. 

I am my parent 's child. In XX/XX/XXXX, when the {$50000.00} loan was granted, I was a XXXX  year-old woman. I wasn't a dependant. I didn't live in the same house with my parents. When the {$35000.00} loan was taken out in XX/XX/XXXX, I was a XXXX year-old woman. Again, not a dependant who lived under their roof. In XX/XX/XXXX, they had no obligation to inform me of their personal finances. In XX/XX/XXXX, the {$50000.00} loan was coordinated by professional mortgage service providers who were obligated to inform me of any transaction that involved the property because I had, by then, become a 1/3rd owner. They employed the service of an Abstractor which involves a Deed search. They had an obligation, by law, to ensure all parties on that Deed were made aware of the loan. They ignored the findings ... twice. My parents were both retired. They, like most people, weren't versed on the process of taking out a mortgage. I, on the other hand, was working for a title company ( that still exists to this day ). In XX/XX/XXXX, while they were signing documents on a bad loan, I was at work AT a title company clearing title correctly for other people. I never had the chance to protect my parents from these bad loans. I was excluded from the process by the mortgage service providers, and that shouldn't cost me a cent. 

There's no logical - or ethical - path to justifying that their mistake should cost me anything. These unenforceable loans were paid on for 9 years, in violation of my right as an owner, and it took my mother 's death for me to be made aware of them. They violated actual U.S Law while I simply earned a living. Unbeknownst to me, I am suddenly expected to pay tens-of-thousands of dollars in attorney fees and such having never violated a single law? I wouldn't have attorney fees if they had done their job. I wouldn't have had to make the XXXX payment to hold off foreclosure if they had done their job. {$7300.00} in fees would have been reimbursed because the loan would never have funded if they had done their job. My parents wouldn't have made {$6800.00} in payments towards a bad loan. The second bad mortgage would never have happened if they had done their job the first time.

Company response to consumer: Closed with explanation