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This is a very interesting article. I don't know about others but in San Diego County a large number of loans are negotiated in Spanish. This could certainly apply to a large number of the Spanish speaking population.

July 14, 2009


Mr. Jose Perez negotiated a home loan in Spanish but all of his loan documents were in English. “It is unfair, illegal and violates the most basic notions of decency and fair dealing” argued Mark Potter of the law firm Potter Handy, LLP. The argument was well received. After hearing the evidence, United States District Judge Thomas J. Whelan ordered U.S. Bank to halt any attempt “from foreclosing upon or transferring ownership” of Mr. Perez’s family home.

Under the Foreign Language Contract Act, if a loan is negotiated in Spanish then the terms of the contract must be provided to the borrower in Spanish. If not, the borrower can cancel the loan. But U.S. Bank argued that it merely bought the loan and had nothing to do with the making of the loan. Judge Whelan rejected the argument and held, “rescission is effective against any assignee” and “it would be entirely inconsistent” with the Foreign Language Contract Act “to allow the assignee to ignore the Rescission Notice and foreclose on the Property.”

U.S. Bank also argues that it is unfair that Mr. Perez is cancelling the loan more than three years after it was made. But Mr. Potter notes that most of his Spanish speaking clients are unaware that they have a legal right to have their contracts in Spanish. “How can you fault a hard-working family man for not knowing that his rights were violated and that he had a right to cancel?” Judge Whelan also criticized U.S. Bank’s attempt to “penalize” Mr. Perez for “attempting to meet his financial responsibilities before filing suit” and found no problem with the fact that Mr. Perez “delayed in filing the litigation until he could no longer afford the upwardly adjusting monthly payments.”

“This is a tremendous step in the right direction” claimed Mr. Potter. The Foreign Language Contract Act was passed to protect Spanish speakers from being taken advantage of. “You don’t get to negotiate a loan in Spanish and then plop a bunch of English documents in front of a borrower to sign. You have a right to know what you are signing and to have a copy in the language you negotiated in.”

“In Southern California, there are a tremendous number of loans that were negotiated in Spanish but never translated into written Spanish documents. This means that there are a tremendous number of Spanish speakers who are choking on high-adjustable rate loans that do not have to live with those loans. They should call me immediately.” – Attorney Mark Potter

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If you would like more information about this article, please feel free to schedule an interview with Mark Potter at 760-480-4162 or email him at

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