For a while, Alberto Ramirez seemed to be living the American dream. Despite being a strawberry picker with an annual salary of $14,000 a year, he purchased a spacious Hollister home where he hoped to raise his family. But Ramirez and his wife Rosa quickly discovered they were in over their heads, and the dream is about to end.
The Ramirezes, who purchased the home with their friends Jesus Martinez and his wife, are about to lose the house, said their attorney Alison Lawton. The foreclosure was originally scheduled for Monday, but it was canceled at the last minute and will likely be rescheduled.
"As of Monday of last week, they were still in their home," Lawton said, adding that the Ramirezes are looking for a new place.
The Ramirezes will lose their investment in their home, and Alberto's credit has been damaged by the foreclosure, she said.
But the couples aren't the only ones who may be regretting the deal. The California Department of Real Estate has completed an investigation of the San Jose firm ACR Investments International, the business that sold the home and arranged for the loan, and has filed an accusation against them. The case is now going to a hearing, said department spokesman Tom Pool, and the real estate company and its agents could lose their licenses.
"At no time mentioned did (the Ramirezes and the Martinezes) have sufficient income to make the payments on the loan," Deputy Real Estate Commissioner Charles Koenig wrote in his accusation. "(Maria Avila and David Dewey of ACR Investments) should have known that their misrepresentations ... would result in the placing of the Ramirezes and Martinezes in the position of losing their home and the money they put into it."
ACR Investments President Rafael Cebrero said his company hasn't done anything wrong.
"We've done everything we could have done and then some for these people," Cebrero said. "That's pretty much it. The rest is up to what the attorneys will say."
Cebrero noted that for several months after the purchase, his wife Maria Avila supplemented the couples' loan payments by around $2,200 per month. According to the real estate department, those payments totaled more than $22,000.
But Koenig wrote that Avila and ACR Investments knew the families couldn't make the $5,200 monthly payments. And even with Avila's payments, the company still made a $14,000 profit on the deal, Koenig wrote.
The Ramirezes and Martinezes drew particular attention earlier this year because of the disparity between their income - in a good month, they earn little more than a combined $6,500 - and the price of their home, and because they don't speak English.
The couples illustrate the fact that minorities and no-English speakers are being particularly affected by the continuing foreclosure crunch, civil rights groups have said. Non-English speakers were singled out for risky subprime mortgages because they didn't know what they were getting into, civil rights groups have said.
The state's accusation outlines a similar story.
"Alberto Ramirez ... could not read the application, because it was in English, and was not aware of what the consequences were of his signing the application," Koenig wrote.
The loan application was full of false statements, Koenig wrote. For example, it listed Ramirez's monthly income at $8,750 per month and described his ethnicity as "not Hispanic or Latino."
The case will eventually go to a hearing, Pool said, and if the real estate department's accusations are sustained, ACR and Avila's real estate licenses could revoked, suspended or restricted.
Lawton said she's been in settlement discussions with ACR Investment International's attorney. Those discussions haven't gone anywhere, she said.
Anthony Ha Anthony Ha covers local government for the Free Lance. Reach him at 831-637-5566 ext. 330 or aha@freelancenews.com.
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