DID YOU KNOW...IT"S ILLEGAL TO PROVIDE LOAN DOCS IN ENGLISH IF YOUR 1ST LANGUAGE IS SPANISH

Foreign Language Translation of Consumer Contracts: Legal Guide K-4


FOREIGN LANGUAGE TRANSLATION OF CONSUMER CONTRACTS
February 2008

A person in a trade or business, who negotiates primarily in the Spanish, Chinese, Tagalog, Vietnamese, or Korean language in the course of entering into a contract with a consumer, must give the consumer a written translation of the proposed contract in the language of the negotiations.1 The translation must be an accurate translation of every term and condition in the contract or agreement. This requirement of California law applies whether the negotiations are conducted orally or in writing.

The foreign language translation must be given to the consumer before the consumer signs the contract. The seller or creditor must give the consumer the foreign-language translation whether or not the consumer requests it. The foreign-language translation must include the proposed contract terms, such as purchase price, finance charges, payment amount, etc.

The purpose of the law is to insure that Californians who speak a language other than English have a genuine opportunity to read the foreign-language translation of any proposed contract that has been negotiated primarily in that language, and to consult with others, before the contract is signed. It is never sufficient for the seller or creditor to give the foreign-language-speaking person the translation after he or she has executed (signed) the contract.

If a trade or business that is required to provide a foreign-language translation fails to do so, the consumer can rescind (cancel) the contract or agreement, in which event the law governing cancellation of contracts will apply.2 The consumer can cancel the contract even if it has been assigned to a financial institution; but in that event, the consumer can look to the original trade or business for a return of the amounts he or she has paid. If the consumer received any goods, the goods must be returned to the original trade or business.

If a consumer rescinds, the consumer need not pay the financial institution that has received an assignment of the contract. Instead, the financial institution is entitled to return the contract to the original trade or business, and to recover from the original trade or business anything it has paid to the trade or business.
The law requiring translation of contracts negotiated in a language other than English applies to:

• Credit sale contracts involving consumer goods and services of all kinds, including automobile purchases and leases;
• Virtually all loans or other extensions of credit for use primarily for personal, family or household purposes, except loans secured by real property;
• Consumer loans secured by real property, if arranged by a real estate loan broker, or made by a personal finance company;• Contracts for the rental, lease or sublease of apartments or other dwellings (including mobile homes) for a period longer than one month. (Month-to-month and week-to-week rental contracts are not covered);
• Contracts involving the payment of fees or charges for legal services furnished by lawyers; and
• Reverse mortgages.
The foreign-language translation need not be given in the following kinds of transactions:
• Home improvement contracts.
• Contracts involving a seller who is not engaged in a trade or business.
• Contracts in which the foreign language-speaking consumer has negotiated the contract through his or her own interpreter (with limitations, see below).

However, the last exception applies only if the consumer's interpreter is able to speak fluently and read with full understanding both the English and the foreign language. In addition, the interpreter cannot be a minor (under 18 years of age). Nor may the interpreter be employed or made available by or through the person engaged in the trade or business.

At the same time and place where any contract is entered into following negotiations primarily in one of the foreign languages listed above, a notice of the consumer's rights must be displayed. This notice must be written in the language of the negotiation and must be conspicuously displayed. The notice must inform consumers of their rights under this law.

This notice need only be displayed at those locations where the foreign language is used. (The notice is not required to be given by providers of legal services or those who make or arrange loans secured by real property.)

The business must give the consumer a foreign-language translation of the original contract and any documents that modify the original contract. Further, a foreign-language translation must be given of the original contract or any subsequent documents that substantially change the rights and obligations of the parties.

A notice of repossession and deficiency under Civil Code section 2983.2 is a document that substantially affects a consumer's rights under an automobile financing contract.3

However, the law does not require a foreign-language translation for any later documents authorized by or expected to be made under the original contract or its modifications. Examples of those documents which need not be translated include periodic statements, sales slips, invoices, add-on sales, or refinancings that are provided by or made pursuant to the original contract.

If the contract involves a loan made by a "supervised financial organization" such as a bank, savings association, credit union or personal finance company, the organization need only provide a foreign-language translation of the credit disclosures required by the federal Truth in Lending Act. A foreign-language translation of the remainder of the contract need not be provided. Thus, the foreign-language translation need only include the amount financed, the annual percentage rate, the amount and due dates of the payments and other relevant credit information – the most relevant details that the average consumer would be likely to consider before signing a contract.

The rule is different in the case of preprinted automobile lease contracts provided to dealers by prospective assignees, such as banks or leasing companies. The prospective assignee must provide a Spanish-language translation of the entire lease contract to the dealer upon the dealer's request.4 The dealer then provides this translation to the Spanish-speaking customer.

In interpreting a contract subject to the foreign-language translation law, the signed English contract determines the rights and duties of the parties. However, if there is a substantial difference between the English contract and the foreign-language translation, the law states that this may show that no contract was ever entered into.

All cosigners of consumer credit contracts must receive notice of their obligations in English and Spanish and/or the language in which the consumer contract is written (if not in English or Spanish) prior to them becoming obligated under the contract.5 NOTE: This does not apply if the cosigners are married to each other.

A Patients' Bill of Rights translated into Spanish, Chinese, and certain other languages must be made available to all patients speaking those languages living in long-term health care facilities, including skilled nursing facilities, intermediate care facilities, and nursing facilities.6

The provisions relating to verification of Spanish-language translations of contracts by the Department of Consumer Affairs were repealed in 2001.7

*****
NOTICE: We attempt to make our legal guides accurate as of the date of publication, but they are only guidelines and not definitive statements of the law. Questions about the law's application to particular cases should be directed to a specialist.
This document is available on the department's website at www.dca.ca.gov. This document may be copied if all of the following conditions are met: the meaning of the copied text is not changed; credit is given to the Department of Consumer Affairs; and all copies are distributed free of charge.
Prepared by: Richard A. Elbrecht, Supervising Attorney, Marla L. Scharf, Staff Counsel, Legal Services Unit. February 2008 update by: Dianne R. Dobbs, Staff Counsel.
ENDNOTES
________________________________________
1. Civil Code section 1632.
2. Civil Code sections 1688 et seq.
3. Reyes v. Superior Court (1981) 118 Cal.App. 3d 159, 162 [173 Cal.Rptr. 267, 268].
4. Civil Code section 2991.
5. Civil Code section 1799.91 (a), (b)
6. Health & Safety Code section 1599.61
7. Statutes 2001, chapter 306 (AB 446).

PREDATORY LENDING PRACTICES

Predatory Lending and Mortgage Loan Practices

PROTECTING YOURSELF AGAINST PREDATORY LENDING AND MORTGAGE LOAN PRACTICES
Both federal and state governments have passed numerous pieces of legislation designed to protect homebuyers from so-called predatory lending entities. Major consumer protection acts include the Real Estate Settlement Procedures Act, the Fair Debt Collections Practice Act, and the Truth in Lending Act. The Obama Administration additionally has pushed through a massive piece of legislation to offer relief for homeowners teetering on the brink of foreclosure.

What are typical practices used by predatory mortgage lenders? Techniques for bilking homeowners abound. Some lenders fail to disclose fees, terms, conditions, and stipulations and later try to enforce these "invisible" clauses. Others prey on consumer fears to get homebuyers to sign off on exorbitant and even extortionist rates and terms. Still others tack on massive fees upfront, which essentially suck away property equity before it can be accrued. Often, predatory lenders will get borrowers to agree to unreasonable or nearly impossible to fulfill timetables for repayment.

Economists and mortgage industry analysts agree that predatory creditors have helped to spur the spectacular collapse of the housing market that has the sent the US economy into its current tailspin. The good news for individual homebuyers is that legal recourse exists. If you have been the victim of a predatory lending, mortgage lender, or agency, you can bring suit and recover damages, including all the payments you have made on your loan thus far and legal costs associated with the suit.

Loan Fraud Auditing is an Auditing company that will scrutinize your loan for TILA, HOEPA and RESPA violations. Then we will pass it on to our attorneys where they will work with you to discuss your options.

For assistance with your situation contact Loan Fraud Auditing at 619-778-1763.

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Foreclosure mess with no end in sight.

Mortgage nightmares

Attache is a report showing how unhelpful the banks have been in giving relief to homeowners who qualify for a mortgage modification under the government Foreclosure Prevention Program. Pretty abysmal, considering it was the banks that put the homeowners in this mess in the first place! I'd also like to point out that these numbers only show the homeowners who qualified for the program, not the total number of homeowners who have been harmed by the predatory lending practices of the banks. Through our program, the homeowner takes control of the situation and finds their own relief instead looking to the banks or government to provide help that will never come! And, the only way homeowners know about our true solution is through you. Let's get out there and make a difference!


Thanks,


Snapshot: Performance by Mortgage Servicers
On Aug. 4, the Treasury Department released data (PDF) showing how each of the mortgage servicers participating in the administration’s $75 billion
foreclosure prevention program has been performing. You can see that breakdown below.
To give an indication of each servicer's performance as a percentage of its loans eligible for modification, the Treasury listed the number of eligible loans that
are more than 60 days delinquent. While that number is useful to compare servicers, it underestimates the total number of loans that are eligible for the program.
The “incentive cap” listed is the amount of money allotted to each participating servicer based on its estimate of how many loans are eligible for the program,
but some of that money will also go to lenders and borrowers. See here for more info.
Note: Some servicers listed below do not show the number of modifications because they joined the program only in the past few weeks.
Companies: 39
XML CSV
Name State Entered
Program
Incentive
Cap
Loans 60+ Days Delinquent : Trial Mods
Underway

Bank of America, NA Calif. Apr 17, 2009 $6 billion
796,467 : 27,985 (4%)

JPMorgan Chase, NA N.J. Apr 13, 2009 $3.4 billion
394,075 : 79,304 (20%)

Wells Fargo Bank, NA Iowa Apr 13, 2009 $2.4 billion
329,085 : 20,219 (6%)

American Home Mortgage Servicing,
Inc Texas Jul 24, 2009 $1.3 billion
CitiMortgage Mo. Apr 13, 2009 $1.1 billion
185,418 : 27,571 (15%)

GMAC Mortgage Pa. Apr 13, 2009 $1 billion
61,326 : 12,540 (20%)

HomEq Servicing Calif. Aug 5, 2009 $674 million
Select Portfolio Servicing Utah Apr 13, 2009 $660.6 million
57,450 : 1,849 (3%)

Wachovia Mortgage, FSB Iowa Jul 1, 2009 $634 million
62,852 : 1,356 (2%)

Saxon Mortgage Services Texas Apr 13, 2009 $632 million
84,130 : 21,130 (25%)

Ocwen Financial Corpo
ration Fla. Apr 16, 2009 $553.4 million
55,516 : 2,517 (5%)

Aurora Loan Services Colo. May 1, 2009 $459.6 million
72,838 : 15,320 (21%)

Wilshire Credit Corporation Ore. Apr 20, 2009 $453.1 million
3,411 : 20 (1%)

Home Loan Services, Inc. Pa. Apr 20, 2009 $447.3 million
33,193 : 0 (0%)

National City Ba
nk Ohio Jun 26, 2009 $295 million
37,126 : 4 (0%)

Carrington Mortgage Services Calif. Apr 27, 2009 $131 million
14,128 : 597 (4%)

Nationstar Mortgage Texas May 28, 2009 $117.1 million
25,690 : 4,854 (19%)

Green Tree Servicing Minn. Apr 24, 2009 $91 million
5,228 : 209 (4%)

Wachovia Bank, N.A. N.C. Jul 29, 2009 $85 million
RG Mortgage Corporation Puerto
Rico Jun 17, 2009 $57 million
3,309 : 0 (0%)

PNC Bank, NA Pa. Jul 17, 2009 $54.5 million
Bayview Loan Servicing, LLC Fla. Jul 1, 2009 $44.3 million
4,425 : 148 (3%)

MorEquity, Inc. Ind. Jul 17, 2009 $23.5 million
Residential Credit Solutions Texas Jun 12, 2009 $19.4 million
1,304 : 265 (20%)

CCO Mortgage Va. Jun 17, 2009 $16.5 million
3,818 : 237 (6%)

First Bank Mo. Jul 29, 2009 $6.5 million
Mortgage Center, LLC Mich. Jul 24, 2009 $4.2 million
ShoreBank Ill. Jul 17, 2009 $1.4 million
Purdue Employees Federal Credit Union Ind. Jul 29, 2009 $1.1 million
IBM Southeast Employees' Federal
Credit Union Fla. Jul 10, 2009 $870 thousand
72 : 4 (6%)

Mission Federal Credit Union Calif. Jul 24, 2009 $860 thousand
First Federal Savings and Loan Wash. Jun 19, 2009 $770 thousand
16 : 1 (6%)

Wescom Central Credit Union Calif. Jun 19, 2009 $540 thousand
136 : 38 (28%)

Lake City Bank Ind. Aug 5, 2009 $420 thousand
Farmers State Bank Ohio Jul 17, 2009 $170 thousand
Oakland Municipal Credit Union Calif. Aug 5, 2009 $140 thousand
Lake National Bank Ohio Jul 10, 2009 $100 thousand
1 : 1 (100%)

Technology Credit Union Calif. Jun 26, 2009 $70 thousand
10 : 0 (0%)

Citizens First Wholesale Mortgage
Company Fla. Jun 26, 2009 $30 thousand
26 : 7 (27