Published: Sunday, August 22, 2010
Fight the power
Student teaches herself law to stave off parents' eviction
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Gary Friedman / Los Angeles Times
Even though she's not a lawyer but a 23-year-old former medical student, Zeenat Ali's legal research has prevented foreclosure of her parents' home.
LOS ANGELES -- As foreclosure fights rage in the nation's courts, the battle over Shahida and Ather Ali's house in Diamond Bar, Calif., looks like a classic mismatch.
In one corner, weighing in at $2.5 trillion in assets, sits Deutsche Bank, which is attempting to evict the Alis from their home of 24 years.
In the other is Zeenat Ali, the couple's diminutive 23-year-old daughter, who dropped out of medical school and sued Deutsche Bank after it foreclosed on the property. Hoping to reclaim title for her parents, Ali has spent half a year litigating in state and federal courts without the help of a lawyer. And though she has no formal legal training, the soft-voiced bantam is more than holding her own.
Using online legal filings as models, she has staved off the eviction and even turned the tables, winning judgments that enabled her to seek $1.7 billion from Deutsche Bank and two other financial firms involved in the deal, Downey Savings and Central Mortgage Co.
All three declined to comment on her suit, filed in March in Los Angeles County Superior Court. It accuses them of fraud, botching foreclosure paperwork and violating laws requiring lenders to seek alternatives before they put delinquent borrowers out on the street.
Ali's victories so far have been mainly procedural. Experts say she stands little chance of winning a large damage award. And her parents are likely to lose their home.
It wasn't until a hearing last week that Ali reluctantly hired an attorney, Kenneth Zwick of Costa Mesa, Calif., to assist her in delaying the eviction. Retaining Zwick paid off: Los Angeles County Superior Court Judge Michael M. Duggan suspended Deutsche Bank's eviction effort until Sept. 20.
But Ali has been the driving force behind the case. Legal veterans have been impressed by the smarts and tenacity of the neophyte with the focused gaze. Ali's occasionally wavering voice belies exacting preparation and a formidable resolve.
The banks have learned not to underestimate her. In a challenge to her budding legal skills, they sought in May to move her lawsuit to federal court in Los Angeles, where they thought they'd have an easier go of it. Ali responded with 170 pages of legal filings. After reviewing them, U.S. District Judge Gary Feess sided with Ali and last month sent the case back to Pomona Superior.
It was a victory that Elizabeth Mann, chairwoman of the executive committee of the Los Angeles County Bar Association's litigation section, called "remarkable."
"Federal judges don't do people favors because they like them," Mann said. "She earned it."
Ali said all she wants is to force the banks to work out a good-faith deal with her parents. The foreclosure cost the Pakistani immigrants their business by putting a second loan into default.
"We lost the home and the business so suddenly that we literally hit rock bottom," she said Tuesday.
In February, Ather Ali pleaded guilty to a federal tax fraud charge, court records show. Zeenat Ali, who at first did not mention the plea in interviews for this story, said her father has been estranged from the family for three years.
The family's financial troubles stem from a decision in 2005, when her parents opened a day-care center for seriously ill adults. With the housing bubble still inflated, they pledged their home as collateral for an $800,000 Small Business Administration loan. They also refinanced their house with a $250,000 Downey Savings pay-option mortgage.
The home loan allowed them to opt for ultra-low monthly payments, freeing up proceeds for the business. But that made the loan balance rise until higher, hard-to-afford payments kicked in.
Ali's suit claims that Downey portrayed toxic loans as beneficial, and that Deutsche Bank, a nonparticipant in President Barack Obama's anti-foreclosure program, seized the home without providing proper legal notice
Representatives of Deutsche Bank and Central Mortgage declined to comment on the Alis' loan.
In one corner, weighing in at $2.5 trillion in assets, sits Deutsche Bank, which is attempting to evict the Alis from their home of 24 years.
In the other is Zeenat Ali, the couple's diminutive 23-year-old daughter, who dropped out of medical school and sued Deutsche Bank after it foreclosed on the property. Hoping to reclaim title for her parents, Ali has spent half a year litigating in state and federal courts without the help of a lawyer. And though she has no formal legal training, the soft-voiced bantam is more than holding her own.
Using online legal filings as models, she has staved off the eviction and even turned the tables, winning judgments that enabled her to seek $1.7 billion from Deutsche Bank and two other financial firms involved in the deal, Downey Savings and Central Mortgage Co.
All three declined to comment on her suit, filed in March in Los Angeles County Superior Court. It accuses them of fraud, botching foreclosure paperwork and violating laws requiring lenders to seek alternatives before they put delinquent borrowers out on the street.
Ali's victories so far have been mainly procedural. Experts say she stands little chance of winning a large damage award. And her parents are likely to lose their home.
It wasn't until a hearing last week that Ali reluctantly hired an attorney, Kenneth Zwick of Costa Mesa, Calif., to assist her in delaying the eviction. Retaining Zwick paid off: Los Angeles County Superior Court Judge Michael M. Duggan suspended Deutsche Bank's eviction effort until Sept. 20.
But Ali has been the driving force behind the case. Legal veterans have been impressed by the smarts and tenacity of the neophyte with the focused gaze. Ali's occasionally wavering voice belies exacting preparation and a formidable resolve.
The banks have learned not to underestimate her. In a challenge to her budding legal skills, they sought in May to move her lawsuit to federal court in Los Angeles, where they thought they'd have an easier go of it. Ali responded with 170 pages of legal filings. After reviewing them, U.S. District Judge Gary Feess sided with Ali and last month sent the case back to Pomona Superior.
It was a victory that Elizabeth Mann, chairwoman of the executive committee of the Los Angeles County Bar Association's litigation section, called "remarkable."
"Federal judges don't do people favors because they like them," Mann said. "She earned it."
Ali said all she wants is to force the banks to work out a good-faith deal with her parents. The foreclosure cost the Pakistani immigrants their business by putting a second loan into default.
"We lost the home and the business so suddenly that we literally hit rock bottom," she said Tuesday.
In February, Ather Ali pleaded guilty to a federal tax fraud charge, court records show. Zeenat Ali, who at first did not mention the plea in interviews for this story, said her father has been estranged from the family for three years.
The family's financial troubles stem from a decision in 2005, when her parents opened a day-care center for seriously ill adults. With the housing bubble still inflated, they pledged their home as collateral for an $800,000 Small Business Administration loan. They also refinanced their house with a $250,000 Downey Savings pay-option mortgage.
The home loan allowed them to opt for ultra-low monthly payments, freeing up proceeds for the business. But that made the loan balance rise until higher, hard-to-afford payments kicked in.
Ali's suit claims that Downey portrayed toxic loans as beneficial, and that Deutsche Bank, a nonparticipant in President Barack Obama's anti-foreclosure program, seized the home without providing proper legal notice
Representatives of Deutsche Bank and Central Mortgage declined to comment on the Alis' loan.
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