65 Year Old Alice Mouser, HSBC, and a Greedy Appraiser

Agnes Mouser is a 65-year-old widow who works in the records department in a Houston prison. In 2000, she sought to pay off her credit-card debt with a loan from Beneficial Finance, which sent an appraiser to assess the value of her home.

“A real nice young man came out to see me,” Mrs. Mouser recalled. “He could have been my grandson.”

That appraiser compared her 1977 mobile home with two new standard homes with two-car garages. Using those homes as benchmarks, Beneficial agreed to lend $34,730 on her home, valued at $43,500, in 2000. Mrs. Mouser’s loan carried an interest rate of 14.88 percent, and she paid 7 points, or $2,431, at closing to get that rate, along with $270 to Beneficial for the appraisal.

A spokeswoman for HSBC, the parent company of Beneficial, said it did not comment on matters involving specific customers.

In 2003, when Mrs. Mouser could not meet the payments, she contacted Ira D. Joffe, a lawyer in Houston. He found that her property was valued by the county at $19,970, less than half of what Beneficial had estimated.

“I promised to depose the appraiser’s Seeing Eye dog if there was a lawsuit,” Mr. Joffe recalled telling Beneficial.

Beneficial released the lien. But then Mrs. Mouser got a tax bill for $10,000, or the amount owed on the $29,566 that Beneficial had treated as a canceled loan.

“The tax bill scared her to death,” Mr. Joffe recalled. “It took a letter from an accountant and two letters from me to get the I.R.S. to go away.”

(excerpted from a full article)