Compounding the pain

By Peter Y. Hong

June 4, 2008 7 AM PT

Times Staff Writer

AMERICAN CANYON, CALIF. —

Three years ago, Donna Robbins tried to use her soaring equity to remodel her house in this Napa Valley community.

Instead, she says she got cleaned out.

Robbins claims that friends from church who ran a finance company agreed to arrange a home equity loan to pay for a new kitchen, bathrooms and landscaping.

As with most financial transactions, there were papers to sign. But Robbins says that what she was told were loan documents were in fact papers that transferred the title to her property.

These new owners subsequently defaulted on the mortgage, according to public property records and a lawsuit Robbins filed in Napa County Superior Court. Now, the house she had inherited from her parents is in foreclosure and Robbins is facing eviction, along with her boyfriend and their seven children.

“It’s very hard to get a house in this economy,” she said, breaking into tears. “We were very lucky to have a house. I can’t imagine starting over again.”

The owners of the finance company Robbins blames for her plight filed an answer to her suit, denying any wrongdoing. Robbins said she dropped the suit last year because she couldn’t afford the legal fees.

Although the circumstances of Robbins’ situation may be in dispute, the FBI recently said that mortgage fraud -- including the swindling of property titles -- is “an escalating problem in the United States.”

Reports of potential mortgage fraud were up 31% in 2007 from the previous year, according to the FBI, which has created mortgage fraud units in its field offices across the country.

Last month, the FBI, state Atty. Gen. Jerry Brown and San Diego prosecutors said they shut down a San Diego-based scheme that allegedly tricked hundreds of homeowners into transferring their deeds to them. Three people were arrested and have pleaded not guilty to theft and conspiracy charges.

In Los Angeles County, the district attorney’s office charged a man in February with grand theft, forgery and other crimes, saying he illegally took 15 homes through forged deeds. He has pleaded not guilty and is awaiting trial.

In Northern California, a group called Fair Housing Napa Valley has received nine complaints -- from Robbins, realty agents and other homeowners -- who say they have been victims of title theft.

“It’s a total nightmare,” said Steve Cogswell, the group’s fair housing director. “More and more of it is coming to the surface.”

Located at the southern end of Napa County, the city of American Canyon has more in common with the adjacent working-class town of Vallejo than Napa Valley’s wine country to the north. When there isn’t much traffic, it’s about an hour’s drive to either San Francisco or Sacramento.

New housing developments shot up during the real estate boom, when the town’s modestly priced homes appealed to people who found themselves priced out of the San Francisco Bay Area.

The housing run-up also pumped up the home values of longtime property owners such as Robbins.

She alleges that her ordeal began in the fall of 2005, when she visited the office of Capital Access, a finance firm run by people she had met through her church. Robbins said she wanted to borrow against her home equity to remodel the well-worn house that she and her brother had inherited from their mother in 2001.

At the time, Robbins was in default on a $115,000 home equity loan she had taken out on the three-bedroom, 1,288-square-foot home. Even so, with an estimated value exceeding $400,000, Robbins had about $300,000 in equity. She said she was told that was more than enough to refinance her home equity loan and take out additional money for remodeling.

Robbins acknowledged that she signed a stack of documents, but said she thought at the time she was engaging only in a discussion of options, not committing to a refinance deal.

Then in December 2005, Robbins said she was meeting with her insurance agent to discuss her homeowner’s policy and learned that her house had been sold.

She said she never knowingly authorized the sale of her house and had never heard of the buyers, Nick and Vivian Bonifacio. The Bonifacios never moved into the house, which has been occupied by Robbins, her boyfriend, their combined seven sons and her brother Larry throughout the episode.

Napa County property records reviewed by The Times show that on Oct. 13, 2005, the house was purchased by the Bonifacios for $435,000 with a $337,500 mortgage. The house’s title was then transferred in August 2006 to Lucina Holdings, which has the same address as Capital Access, public records show.

In their answer to Robbins’ suit, Capital Access and the Bonifacios provided a sales contract dated Sept. 16, 2005, and signed by Robbins and her brother. The Robbinses “clearly, voluntarily and knowingly, legally and properly, sold any and all of their interests,” the reply said.

Robbins said she thought she was signing documents simply to authorize the refinancing of the house.

Robbins also provided The Times with a letter she received from Capital Access dated Oct. 14, 2005, stating that she was enrolled in its “Redemption Program” and that “our main goal is to help you keep your home that you worked so very hard for.”

Thiel Aguila, owner of Capital Access, according to state records, could not be reached for comment, nor could the company’s attorney. The phone number listed in state incorporation records for Capital Access has been disconnected.

The address for the company listed in public records belongs to a single-family house across the street from a 7-Eleven store. A sign there says “By Appointment Only,” and no one answered a knock on the door one day last month.

The Bonifacios live in a 6-year-old house in one of American Canyon’s newer housing developments. Nick Bonifacio declined to comment when a reporter knocked on their door.

Cogswell of Fair Housing Napa Valley said he had urged people who believe they are victims of fraud to contact the Napa County district attorney’s office. Robbins said she did lodge such a complaint, but chief deputy district attorney John Goold said his office had no record of it. Moreover, Goold said, such complaints should first be filed with local police departments.

American Canyon’s acting police chief, Jean Donaldson, said his office stands ready to investigate allegations of mortgage fraud. The Robbinses, however, seem to have given up hope of getting their home back and are now awaiting eviction from a house they do not own.

Donna Robbins knows it’s not much of a house these days. She won’t let a reporter in to see it, saying it’s too run-down. But she doesn’t want to live anywhere else, she said.

She grew up on the block with kids who like her are also raising their families there. The house was a special prize for her parents, she said. Her father bought the house when he retired from the Air Force, ready to settle down and raise a family after years of traveling.

For her mother, an immigrant from Japan, it was her piece of America.

“She built that Japanese garden by hand, with my father,” Donna said, crying as she gestured to the front yard. “It’s all we know.”

peter.hong@latimes.com

THE FORECLOSURE FRONT

Reporter Peter Hong and photojournalist Brent Foster drove across California to see how home foreclosures were playing out in various communities.

MONDAY

A Coachella Valley couple rode the real estate boom and is struggling in the bust.

TUESDAY

How foreclosures hit a community at ground zero in the housing downturn.

TODAY

A Napa County homeowner blames mortgage fraud for her foreclosure.

THURSDAY