Women Forced Out of Their Jobs For Reporting Fraudulent Sub-Prime Home Loans Win Appellate Decision
In recent months, the sub-prime lending market has collapsed, as many borrowers can no longer afford their monthly payments.  Home values have plummeted below the amount owed on loans as interest rates have risen.  As a result, foreclosures have become increasingly frequent.  Six brave women who worked for one of the nation's largest sub-prime home mortgage lenders, Lehman Brothers subsidiary BNC Mortgage Inc., spoke out about fraudulent mortgage lending practices, and were  viciously harassed for their trouble.

Women Forced Out of Their Jobs For Reporting Fraudulent Sub-Prime Home Loans Win Appellate Decision

Oct 2 10:20 AM US/Eastern

     In a September 26, 2007 ruling by California's Third Appellate District,
these employees of BNC Mortgage, Inc., who were forced to resign after
reporting fraudulent mortgage lending practices, have won the right to sue the
company in court and have their cases heard by a jury. 
 
    BNC Mortgage, Inc. was in the business of selling sub-prime home loans to
buyers who could not financially qualify for conventional loans.  Last month,
Lehman Brothers was forced to shut down BNC Mortgage, Inc., and its sub-prime lending business because the volatile market had made it so unprofitable.
 
    Before the bottom fell out of the sub-prime lending market, Coleen
Colombo, Isabel Guajardo, Linda Howard-James, Cheryl McNeil, Michelle Seymour and Sylvia Vega-Sutfin were highly paid and successful employees of BNC Mortgage, Inc.'s Sacramento branch.  The women complained to their
BNC superiors about fraudulent lending practices.  BNC management told them
don't worry about qualifications, just write loans."  After the fraud complaints,
management retaliated.  Each of the women was subjected to harassment designed to force them to quit.  An account manager sexually harassed the women.  When they complained, the branch manager laughed it off. 

Eventually, all six women  resigned rather than subject themselves to further harassment.  Their press conference on September 7, 2005 was widely reported in print and on television.
 
    When J. Gary Gwilliam of Oakland's Gwilliam, Ivary, Chiosso, Cavalli &
Brewer filed a lawsuit on behalf of the women in Sacramento County Superior
Court, BNC tried to have the matter sent to arbitration.  Arbitration is a
procedure favored by employers, who believe it gives them an advantage over
former employees who sue them for wrongful termination.  BNC argued that each woman signed an agreement when they were hired giving up their constitutional  right to a jury trial, forcing them to bring any claims of mistreatment before a single arbitrator. 
 
    The Sacramento Court ruled that the arbitration agreements were not
enforceable because they were not freely negotiated.  In addition the
agreements were unfair because BNC reserved for itself the right to a jury
trial if it chose to sue its employees.
 
    BNC appealed this decision.  On September 26, 2007, the Third Appellate
Court agreed with the Sacramento Court. 
 
    Gary Gwilliam, lead attorney for the former BNC employees is pleased with
the decision.  "This is another victory for the average worker against large
employers who try to limit access to justice by forcing their new hires to
sign arbitration agreements.  That's exactly what happened to these six women, who complained about illegal lending practices, and ended up being victimized by the company they were trying to protect.  Forcing them into arbitration would only be a further injustice at the hands of BNC." 
 
    For further information regarding the Appellate ruling or the case, please
contact Gary Gwilliam, Randall E. Strauss or Jane Felice Gorelick of Gwilliam,
Ivary, Chiosso, Cavalli & Brewer, (510)-832-5411.   
  
     CONTACT: J. Gary Gwilliam, Esq., Randall E. Strauss, Esq., or Jane
              Gorelick Gwilliam, Ivary, Chiosso, Cavalli & Brewer
              Phone:  510 832-5411
              Fax:   510 832-1918
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