Without her knowledge, an unknown perpetrator used the name, Social Security number, credit history and identification of Aurora Lepe to purchase a residence and obtain two mortgages secured by the property.

Lepe’s signatures on the documents were forged. Due to nonpayment of its mortgage, lender CTC Real Estate Services sold the property at a foreclosure auction sale.

Purchase Bob Bruss reports online.

After paying off the balances on the first and second mortgages, $51,334 surplus funds remained.

Not knowing what to do with the remaining funds, the lender interpleaded the money into court. The lender said to the judge the fair and equitable result would be to have Ms. Lepe receive the surplus funds to help compensate for her identity theft and all her inconveniences. Nobody contested the interpleader.

If you were the judge would you give the excess funds to Ms. Lepe?

The judge said yes!

Ms. Lepe has established by a preponderance of the evidence she was a victim of identity theft, the judge began. Although she had nothing to do with title to the residence being taken in her name, and an unknown perpetrator profiting from the first and second mortgages, she is the only individual who has a claim to this money, he continued.

“The mere fortuity that the wrongdoer has disappeared without receiving the surplus and is not subject to legal action should not, as a matter of equity, preclude Ms. Lepe from being able to recover the funds not in the possession of the identity thief,” the judge emphasized.

No one else has claimed the funds remaining after paying off the foreclosed mortgages secured by the property, and as a result of the identity theft and foreclosure, Lepe’s credit was ruined, although she was an innocent victim, he commented. Therefore, the $51,334 excess funds remaining after the foreclosure sale and paying the attorneys fees shall go to Ms. Lepe as restitution in this unusual situation, the judge ruled.

Based on the 2006 California Court of Appeal decision in CTC Real Estate Services v. Lepe, 44 Cal.Rptr.3d 823.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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