My question involves real estate located in the State of: California
I am posting this on behalf of my girlfriend who is in a bit of a pickle. Here is the synopsis of the problem:
4 years ago my GF was living with her mom, she was in her late 20s. Under a lot of duress from her mom who told her that all she wanted to do was transfer title to her because she had bad credit she signed a document. This document was also notarized. Now fast forward to current and she is being named on a lawsuit along with her mom, the bank, the loan servicer, the notary and others (simply listed on the lawsuit as "DOES 1-50", by DOES I am inferring it to mean John Does as it says "yet to be identified individuals"). Apparently this was some sort of refinancing scam that her mom was part of.
After some research by me I have found out the nature of this scam. It is pretty much this one: http://www.vuwriter.com/vubulletins....24485700000000
except for the last step: the current homeowner bought the property for cash so there is no title insurance so that is why he is initiating the lawsuit.
What happened was that her mom I believe owed some money on her home (perhaps a HELOC not exactly sure), then some scam outfit promised to get rid of her HELOC for a fee, she fell for it and as part of that scam a fraudulent reconveyance document was signed by my girlfriend as a "representative of the bank" affirming that the property is unencumbered.
I believe this document was filed with the county recorder and now the property became free and clear to be sold. It was sold and the mother got some money, her outstanding amount "forgiven" and perhaps the scam organization pocketed something as well. So, this property apparently was sold multiple times, to an LLC etc. just as described in the scam above.
Now, the last purchasers of the property (the current owners) are the ones that are filing the suit. They bought the property for cash and shortly thereafter received a notice of default since the original outstanding amount was never cleared to begin with (since the document was fraudulent).
So, here is the issue. My GF has filed a response to the suit but needs some advice on the following:
- what is her financial culpability in this? She did not financially benefit from this at all and there is no evidence whatsoever that she received any funds. Her mother is a beneficiary of some funds.
- The suit is for the amount of money owed to the bank ($60,000), plus lawyers fees, plus punitive damages. Since there are a large number of people named on the suit, can my GF somehow be held responsible for the entire amount if the others can't pay? That does not seem right to me since if a negative decision is made on the suit then all the people named should be equally culpable.
Thanks for any feedback!