Widow’s Loan Nightmare Sparks Review
The head of a giant lending company says he is taking steps to guard against cases like the one in which his company tried to seize the home of an elderly, impoverished widow.
Other loan files from Transamerica Financial Services’ Scottsdale, Ariz., office will be reviewed, but any problems are likely to be local, said Arthur van Leuven, chief executive officer of Transamerica Financial Group and executive vice president of its parent, Transamerica Corp.
Transcripts of court testimony by a former loan officer persuaded Transamerica to drop its fight with 77-year-old Lennie Williams, Van Leuven said in a recent telephone interview.
The battle began after Williams allowed her small, 42-year-old home to be used as security for a loan her son-in-law took out from Transamerica Financial Services Inc., the corporation’s Arizona operation.
The son-in-law disappeared with the money, according to court records, and Transamerica began foreclosure on the home after Williams, who supports herself on pensions of $438 a month, was unable to keep up with monthly loan payments of $499 a month.
Volunteer lawyers fought back. The loan officer who handled Williams’ loan testified that he doubted whether she understood what she was doing, and a doctor who was treating her at the time testified that she wasn’t capable of remembering which pill to take, much less of understanding loan agreements.
Even after a Maricopa County Superior Court judge in January ordered a temporary halt to the foreclosure and said it was likely Transamerica “knew or should have known” something was wrong when it made the loan, the company’s lawyers pursued the case and demanded that Williams post bond of $450 a month pending trial.
Last month, an Associated Press story detailed Williams’ plight. At about the same time, senior officials at Transamerica Financial Group received a transcript of the loan officer’s testimony, according to Van Leuven.
“It became apparent from that transcript that two parties had been victimized,” he said. “Lennie Williams is one of them, and Transamerica is the other.”
The company decided to drop all proceedings against Williams and proceed only against the son-in-law because it is “far easier for us to stand the victimization than for Lennie Williams,” Van Leuven said.
The company will return payments Williams made to the court and will review other loans by its Scottsdale office to ensure that there aren’t any similar cases, he said.
The review will be difficult because there was nothing in Williams’ file to indicate an unusual transaction until her lawyers began complaining, he said.
Williams’ attorney, Michael Curran, said a tentative agreement had been reached in her case.
