EquityLink faces class-action lawsuit

Denver loan firm is accused of peddling predatory program

By Roger Fillion, Rocky Mountain News
October 15, 2003

A class-action suit was filed in Jefferson County District Court on Wednesday charging that a Denver- area company duped a financially strapped couple out of their Jeffco home.

The company, EquityLink, is accused of peddling a predatory loan program to homeowners who've built up equity in their house but risk losing the property.

According to the lawsuit, the loan program has been sold to more than 200 Colorado residents since 1999, including Steve DeHerrera and his former wife, Donna Lewis, the plaintiffs in the suit.

The couple charge that the "vast majority" of the 200 Colorado participants in the "HomeSaver" program have lost ownership of their homes, all their home equity and occupancy of their houses - because of the program.

"It's equivalent to getting a loan with an interest rate of 20 percent to 50 percent," Tobin Kern, an attorney at Hoffman Reilly Pozner & Williamson in Denver, said of the program. The firm is one of two that filed the suit.

The attorneys for the couple want the court to give the case class-action status, a move that would allow DeHerrera and Lewis to sue EquityLink on behalf of a larger group of people.

Such a tactic, if successful, could produce a bigger judgment against EquityLink, if it were found guilty.

A spokesman for EquityLink and its owner, William Turner, couldn't be reached for comment. An attorney who has represented Equity-Link said he wasn't yet in a position to comment.

Under HomeSaver, EquityLink agrees to pay off a homeowner's mortgage to bar foreclosure. In exchange, a customer signs over the home's title.

The customer, in effect, becomes a tenant, leasing the home back from EquityLink with an option to repurchase the house at its fair-market value, according to the complaint filed in the case.

"If they miss a rent payment, they get evicted and lose everything," said John Head, attorney with the Denver firm of Head & Associates, which also is representing DeHerrera and Lewis.

Head said EquityLink has been based in Westminster but may have moved. A Web site lists the company as based in Denver, with "satellite offices" in Chicago and San Diego.

DeHerrera and Lewis, who are getting divorced, claim they had $40,000 worth of equity in their home but lost it - and the house - to EquityLink after the company sold them HomeSaver.

The couple say that, at the time, they were trying to refinance their mortgage, which had gone into foreclosure.