Thursday, July 9, 1998 | 11:08 a.m.
A Las Vegas businessman, accused in lawsuits of wronging elderly and low-income homeowners, will no longer be eligible to make loans to such people.
David Sass and his mortgage company, Unlimited Holdings, had operated under an exemption up until early this year that allowed him to operate without a license on the basis that he was loaning his own money.
"The exemption under which he operated under for a period of time will not be renewed," said Lyndon Evans, deputy commissioner for the state Financial Institutions Division.
Evans said that earlier this year, the state allowed Sass to continue business if he would apply for a mortgage license. Sass has not been granted a license and because his exemption has been voided, he will no longer be able to make loans.
Evans said his department had received several complaints about Sass. Moreover, civil lawsuits contend Sass has a pattern of issuing loans with high interest rates, seeking to foreclose on the property when they default and buying the house for profit.
"We're alleging a pattern and practice of targeting low-income and elderly homeowners for loans offered by David Sass," said attorney Leah Kane, who represents two clients in cases in Clark County District Court. "The purpose is not just to make a loan, but to take clients' houses."
The complaints lodged against Sass involve people who have built up equity, but were delinquent on first mortgages. In cases being represented by Kane, homeowners were solicited by Unlimited Holdings after being delinquent on a first mortgage and were offered loans based on their equity.
Another suit filed by Lynda Cope, who is not represented by Kane, states she responded to an advertisement offering real estate loans.
All the complaints allege a common theme. The borrowers say they were never given written disclosures of loan conditions such as finance charges and interest rates -- an alleged violation of the federal Truth in Lending Act.
However, Sass says that he is doing the borrowers a favor by getting them out of trouble with their first mortgage so they can regain their financial footing. He said he provides loans to people turned down by mainstream financial institutions.
"Prior to us, you're in foreclosure," Sass said. "You've got no option to borrow money. We don't want to go back into foreclosure on people. That's an aggravation."
He maintains that clients are given the necessary paperwork.
In the case of Cope, her suit in Clark County District Court contends that after an inspection of her home, Sass placed a $65,000 lien on her property. That was far more than she intended to borrow, but after pleading with Sass he agreed to remove the lien, only if she borrowed $15,000. After a signing a promissory note for $23,500 with Sass as the beneficiary, she said she received $14,200.
The suit contends Cope did not realize until after the deal had been completed that with the various undisclosed fees, she would be paying an interest rate far above the prevailing market rates.
In two suits represented by Kane, the plaintiffs contend they received one-year loans that called for large "balloon" payments at the end of the year.
A complaint filed on behalf of Thetis Merriman states she thought she was getting a 30-year loan with payments of about $350 per month. She was told the loan paperwork she was to sign would be sent in the mail, but it was not.
Moreover, Merriman received payment coupons stating her monthly payments would be $774 per month with a $40,000 balloon payment due at the end of the year. She later found she did not receive a 30-year loan, but a one-year note and that the company could "roll it over from year to year," according to the complaint.
That wasn't the end of Merriman's woes. She later found that her first mortgage company had not been paid on time, something Sass' company was supposed to do under its loan agreement, according to the complaint.
Also, Merriman received a notice of a trustee's sale that was to be held in November 1997. That did not occur. But last April she received notice that a trustee's sale was held on her home -- in March. In a March 31 letter, Unlimited Holdings threatened the 87-year-old Merriman with eviction.
She was never actually evicted and has since settled in an agreement that allowed her to keep her home. Sass said that if it were his intent to take people's houses, he wouldn't settle. Kane counters those settlements wouldn't be made if Sass were not taken to court.
Like Merriman, Michael Flint fell behind on a mortgage in March 1997 and was solicited by Unlimited Holdings. That May, Flint went to Unlimited Holdings' office and signed a loan agreement for, he thought, $13,500 at 15 percent interest. The agreement called for Flint to make $200 payments. However, Flint also received a federal Truth in Lending Disclosure Statement that showed the interest rate to be 42.7 percent and called for an $11,000 balloon payment after 11 monthly installments of $200.
Moreover, of the total amount of the loan, Flint received $8,262 with the rest going to fees and other charges.
Last January, a trustee sold the property to Unlimited Holdings for $22,092. Unlimited Holdings then advertised the house for sale at a price of $89,900, according to the suit.
Like Merriman, Flint filed a complaint to have the sale of the home set aside and his case is in settlement negotiations with Sass.
Sass points out that neither Flint or Merriman were removed from their homes. He said he encourages customers to finance at a mainstream institution after about a year of paying on loans he issues so they can apply for money after they get out of delinquency.
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