The $575,000 Mortgage

With the vestry regaining control of the parish and some financial records, a picture of the squatter group's stewardship of the property is beginning to become clear. There is, however, a great deal the vestry still doesn't know. In particular, the squatters closed most of the bank accounts they had been using and withdrew all remaining funds, and so far, the banks have refused to give the vestry access to the records of these accounts. That is likely not the end of the story, but subpoenas may eventually be necessary.

However, the vestry had been aware for some time that Mrs Bush took out a $575,000 mortgage on the commercial building on the parish property. As paperwork has become available, we know more. This transaction closed on November 26, 2014. Mrs Bush and John Cothran signed the paperwork on behalf of "Rector Wardens Vestrymen of St Mary of the Angels Angelican [sic] Parish". There are numerous misspellings of the parish name throughout the paperwork; it is not clear whether these are deliberate.

The chronology is significant: on November 12, 2014, he California Supreme Court declined to review the appeal of the Appeals Court's decision by the dissidents and the ACA. This sent the case back to the trial court for another year and more of legal proceedings. Within two weeks of the Supreme Court's decision, Mrs Bush had seen fit to raise over half a million dollars. What this money was intended for, and what has happened to it, we still don't know.

On reviewing the available information, the vestry's counsel believes this was an interest-only loan for a period of three years. The Bush group was to pay $3,828.54 per month in interest and return the $575,000 to the lender three years later. This strongly suggests that the Bush group expected to have the funds available to do this within a relatively short period of time -- they weren't expecting to hold on to the property, in other words. This in turn suggests their agenda was to sell the property, and the legal setbacks, while raising the cost, were in their view simply obstacles to their continued intent to sell the property.

The lenders were a private couple whom I'll refer to as the Xs. The Xs chose to work through FCI Lender Services, Inc , which specializes in providing billing and foreclosure services to private lenders. However, a simple web search on the company name brings up four hits on sites listing complaints against FCI before the company's own web site appears. Typical is this one:

Grade Summary

Overall, FCI Lender Services Inc. received a grade of "F" based on how quickly the company responded to complaints, how often customers disputed their final resolution, and how many complaints were recieved per customer.

Grades are also broken down by the financial products offered be each institution. FCI Lender Services Inc. is rated "D" in Mortgages. Click on any of the financial products to see how FCI Lender Services Inc. compares.

Overview

FCI Lender Services Inc. has received 43 consumer complaints since June, 2012 – more than 85% of other banks.

Of those complaints, 81.4% of complaints were resolved in a timely manner. The CFPB allows 60 days to resolve complaints before considering them 'untimely.' FCI Lender Services Inc. meets the 60-day response deadline less frequently than 89.1% of other banks.

After companies respond to complaints, customers may dispute the response indicating that the issue was not resolved adequately. 25.6% of customers dispute FCI Lender Services Inc.'s response to complaints — worse than 81.2% of other companies.

The problem here is that nobody seems to have done any basic investigation into whether Mrs Bush and the squatter group held actual title to the property -- which the courts eventually ruled that they did not. The adverse ruling by the appeals court, sustained by the state supreme court, should have been a warning to any potential lender. Given these uncertainties, it appears that the Bush group was careful to find a business partner that would not ask too many questions.

The title was insured by the Old Republic Title company, which does not appear to have the same level of complaints as FCI. However, it's plain that Old Republic did only a minimal job of researching title and did not catch the litigation.

As of the March 1, 2016 payment due to FCI, this matter has been referred to the vestry's counsel and will not be paid, since the squatter group did not hold title to the property, and neither Mrs Bush nor Mr Cothran was authorized to sign for the parish.

Given FCI's record, it's likely they won't do anything until someone, presumably attorneys retained by the Xs, forces them to. My wife feels that unfortunately, it will be up to the Xs and their attorneys to pursue this matter, although clearly Mrs Bush is on the hook for more than half a million dollars. Mrs Bush, again, is 86 years old.