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1 James R. Cracolice (SEN ) Cracolice & Associates 0 S. Winchester Blvd., Suite 00 San Jose, CA 8 Telephone: (08) Facsimile: (8) -8 Attorneys for Plaintiffs CARLEN GREGORIO GERTRUDES GREGORIO CARLEN GREGORIO, an individual; GERTRUDES GREGORIO, an individual; on behalf of themselves and all others similarly situated, vs. Plaintiffs, ARGENT MORTGAGE COMPANY, L.L.C., a Delaware limited liability company; CITI RESIDENTIAL LENDING INC., a Delaware corporation; CR TITLE SERVICES, INC., a Delaware corporation; CITIGROUP INC., a Delaware corporation; and DOES through 0, inclusive, Defendants. SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO ) ) Case No.: ) ) ) CLASS ACTION ) COMPLAINT FOR: FfLED Superior Court Of California, Sacramento Dtttmis Jonus, Exttcutivu Officer /08 avfaisavicft Deputy. Fraudulent Concealment. Conspiracy to Defraud. Violation of Bus. & Prof. Code 0 Deceptive Lending Practices. Violation of Bus. & Prof. Code 0 Truth in Lending Act Violations. Unjust Enrichment. Negligence. Wrongful Foreclosure 8. Cancellation of Written Instruments. Violation of Bus. & Prof. Code 0 Wrongful Foreclosures Courthouse News Service. Plaintiffs CARLEN GREGORIO and GERTRUDES GREGORIO (hereinafter "Plaintiffs") allege upon personal knowledge as to themselves and their own acts and experiences, and upon information and belief as to all other matters, as follows:

2 8 I. INTRODUCTION. This is class action seeks to redress the devastating financial harm caused by the deceptive lending scheme of Argent Mortgage Company, LLC ("ARGENT") and its successor and affiliated companies. This class action also seeks relief and justice for the wrongful and fraudulent foreclosures by these Defendants.. ARGENT, one of the largest of the subprime lenders, devised and maintained a deceptive scheme to mass produce loans. ARGENT viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard for borrowers' long-term ability to afford them and to sustain ownership of their property. ARGENT sold risky, unaffordable and unsustainable loans to borrowers, the terms and dangers of which borrowers did not understand. ARGENT fraudulently concealed from borrowers material information regarding the affordability of these loans. As a consequence, borrowers and their families throughout this state have been ruined financially, lost homes, been displaced and suffered immeasurable distress.. And this is not all. ARGENT's successors, Citi Residential Lending Inc. and CR Title Services Inc., both subsidiaries of Citigroup Inc., have recorded false declarations with the Notices of Trustee's Sale in an effort to expedite the foreclosure of these borrowers' homes. Borrowers thus have not only been trapped by Defendants into unaffordable loans, they have also been deprived of the opportunity to save their homes through new federal programs that have recently been implemented to help them avoid foreclosures. II. PARTIES. Plaintiffs Carlen Gregorio and Gertrudes Gregrorio (collectively "Gregorios" or Plaintiffs), are husband and wife, and at all relevant times herein mentioned were, individuals residing in the State of California.. Defendant ARGENT MORTGAGE COMPANY, LLC ("ARGENT"), is a Delaware limited liability company doing business in the state of California whose California limited liability number is 008.

3 . Defendant CITI RESIDENTIAL LENDING INC. ("CRL"), is a Delaware corporation doing business in the state of California whose California corporate number is C Defendant CR TITLE SERVICES, INC. ("CR TITLE"), is a Delaware corporation doing business in the state of California whose California corporation number is C08.. Defendant CITIGROUP INC. ("CITIGROUP"), is a Delaware corporation doing business in the state of California and the parent company of Defendants CRL and CR TITLE. CITIGROUP acquired ARGENT in September 0 and assumed all of its liabilities and obligations. CRL has assumed and been assigned loans originated by ARGENT.. Plaintiffs are unaware of the true names, capacities and/or basis of liability of the Defendants sued herein under the fictitious names DOES through 0 inclusive, and therefore said Defendants are sued herein pursuant to C.C.P.. Plaintiffs will amend this Complaint to allege their true names, capacities, and/or basis for liability when the same has been ascertained. Each of the fictitiously named Defendants designated herein are in some manner liable to Plaintiffs, and/or claim some right, title, or interest in the matters or properties related hereto.. Each of the Defendants was the agent, representative, and/or employee of the remaining Defendants, and was acting within the scope and authority of said agency, representation and/or employment of the remaining Defendants, and is jointly and severally liable to Plaintiffs. III. ALTER EGO ALLEGATIONS. Defendants DOES -0 are, and at all relevant times herein mentioned were, members, managers, managing agents, shareholders, officers, and/or directors of Defendants ARGENT, CRL, CR TITLE, CITIGROUP and DOES -0.. At all relevant times mentioned herein Defendants DOES -0 operated, controlled, managed and dominated Defendants ARGENT, CRL, CR TITLE, CITIGROUP and DOES -0 as mere shells, instrumentalities, and conduits through which these Defendants conducted their business and engaged in illegal and fraudulent activities, as set forth herein below, and that there existed such a unity of interest and beneficial ownership that the separateness of said individual Defendants and the limited liability companies and/or corporations has ceased. Adherence to the fiction of the separate existence of

4 Defendants ARGENT, CRL, CR TITLE, CITIGROUP and DOES -0 as entities distinct from Defendants DOES -0 would permit an abuse of the limited liability company and/or corporate privilege and sanction fraud or promote injustice. In justice and equity, the Court should pierce the limited liability and corporate veil to fasten liability on these Defendants DOES -0 personally.. Furthermore, Defendants DOES -0 are personally liable under the claims alleged in this Complaint not just because the limited liability and corporate veil should be pierced, but because they personally engaged in wrongful, unlawful and tortious conduct. IV. JURISDICTION AND VENUE. This Court has jurisdiction over all causes of action asserted herein pursuant to the California Constitution, Article VI, Section and Code of Civil Procedure section., and the amount in controversy is within of the jurisdictional amount of this Court.. Venue lies in Sacramento County in that, pursuant to Code of Civil Procedure section, real property that is the subject of this action is located in Sacramento County; and further, Plaintiffs' causes of action arose within Sacramento County; the unfair, fraudulent, unlawful and otherwise wrongful acts described herein have, in part, occurred in Sacramento County; and each Defendant transacts business, advertises or offers products for sale, in Sacramento County. V. CLASS ACTION ALLEGATIONS. Description of the Class: Plaintiff brings this class action pursuant to the provisions of Code of Civil Procedure section 8 on behalf of themselves, on behalf of all others similarly situated, and on behalf of the General Public, and as representative of the Class as defined as follows: Class A: A class consisting of all persons within the United States who entered into home-secured loans with Defendant ARGENT from December, 0 through November, 08 secured by property situated in the State of California. Class B: A subclass of Class A consisting of all persons within the United States who entered into home-secured loans with Defendant ARGENT from December, 0 through November, 08

5 secured by property situated in the State of California against which Defendants caused a Notice of Trustee's Sale to be recorded after September, 08 and foreclosed upon the property. Class C: A subclass of Class A consisting of all persons within the United States who entered into home-secured loans with Defendant ARGENT from December, 0 through November, 08 secured by property situated in the State of California against which Defendants caused a Notice of Trustee's Sale to be recorded after September, 08 and thereupon caused the property to be sold at a Trustee's Sale.. Excluded from the classes are governmental entities, Defendants, any entity in which Defendants have a controlling interest, and Defendants' officers, directors, affiliates, legal representatives, employees, co-conspirators, successors, subsidiaries, and assigns. Also excluded from the classes are any judge, justice, or judicial officer presiding over this matter and the members of their immediate families and judicial staff.. Plaintiffs reserve the right to amend or otherwise alter the Class definitions presented to the Court at the appropriate time, or propose or eliminate sub-classes, in response to facts learned through discovery, and legal arguments advanced by Defendants or otherwise.. Numerosity: Members of the Class are so numerous that joinder of all the members of the Class is impracticable. While the precise number of Class members has not been determined at this time, Plaintiffs believe that the total number of Class members is at least in the hundreds and these members are geographically dispersed within the State of California. Plaintiffs believe that the exact number, identity and address of the Class members can be obtained from Defendants records.. Common Questions of Law and Fact Predominate: There are many questions of law and fact common to the representative Plaintiffs and the Class, and those questions substantially predominate over any questions that may affect individual Class members. Common questions of fact and law include, but are not limited to, the following:

6 As to Class A; f\ 8 a. whether Defendants suppressed and concealed the following material facts in connection with loans sold; b. whether Defendant ARGENT sold risky, unaffordable and unsustainable loans, the terms and dangers of which the borrowers did not understand; c. whether Defendant ARGENT sold adjustable rate loans without giving adequate regard and due care as to whether borrowers could make the monthly payments if and when the interest rate increased; d. whether Defendant ARGENT sold loans that created a high and unacceptable risk that the * borrowers would lose their homes, unable to repay the loan or refinance it; e. whether Defendant ARGENT engaged in this wrongful conduct routinely and systematically, as a pattern and practice; f. whether Defendant ARGENT devised and maintained a deceptive lending scheme that involved unlawful, unfair and fraudulent activities; g. whether Defendants knew these facts and knew that borrowers were unaware of these facts and could not discover them given the complexity of the loan transaction and because they did not have access to ARGENT'S internal information as to how it marketed, processed and sold loans; h. whether Defendants intentionally concealed and suppressed these facts to induce borrowers to agree to the loans i. whether in their concealment and suppression of these facts, Defendants, and each of them, acted with oppression, fraud, and/or malice; j. whether Defendants routinely failed to comply with the requirements of federal laws including the Truth in Lending Act, ("TILA") U.S.C. 0, et seq.;

7 k. whether the practices described above, including Defendants' violations of federal and state law, violate California Business & Professions Code 0, et seq.; and. whether Plaintiff and the members of the Class are entitled to the injunctive and equitable relief requested herein. As to Class B: a. whether Defendants systematically and routinely caused to be prepared and recorded Notice of Trustee's Sales with false declarations; b. whether Defendants systematically and routinely caused these false declarations to be made with reckless disregard for their truth or falsity; c. whether Defendants wrongfully foreclosed upon properties pursuant to the fraudulent Notice of Trustee's Sales; d. whether Defendants violated Civil Code.; e. whether the practices described herein violate California Business & Professions Code 0, etseq.; and f. whether Plaintiffs and the members of the Class are entitled to the injunctive and equitable relief requested herein.. Typicality: Plaintiffs' claims are typical of the claims of the members of the Class. Plaintiff and all members of the Class have been similarly affected and harmed by Defendants' common course of wrongful conduct as described herein.. Adequacy of Representation: Plaintiffs will fairly and adequately represent and protect the interests of the Class members. Plaintiffs have retained counsel with substantial experience in litigating complex cases. Plaintiffs and their counsel are committed to vigorously prosecuting this action on behalf of the Class members. Neither Plaintiffs nor their counsel have any interests adverse to those of the Class members.

8 . Superiority: A class action is superior to other available means for the fair and efficient adjudication of this controversy. Individual joinder of all members of the Class is impractical. Questions of law and fact common to the Class predominate over any questions affecting only individual members of the Class. A class action treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of effort and expense that numerous individual actions would engender, thereby providing a means for relief that is most efficient and economical for the parties and the judicial system. It would be virtually impossible for the Class members to redress the wrongs done to them on an individual basis given the cost of bringing this litigation. For many, if not most, class members, a class action is the only feasible mechanism that allows therein an opportunity for legal redress and justice. VI. DEFENDANTS' DECEPTIVE LENDING SCHEME. Over the past decade, ARGENT and its sister company Ameriquest Mortgage Company, have been two of the largest, if not the largest, subprime lenders in the nation. With the nation's recent economic crisis and the implosion of the subprime market, subprime lenders have been widely faulted for destabilizing the financial sector by generating bad loans that were sold on the secondary market. While much of the focus has been on how these "toxic assets" have harmed banks and investors, these loans have also been devastating to borrowers. In making these "toxic" loans, ARGENT engaged in widespread abuses and deceptive practices in its dealings with borrowers.. In an effort to maximize profits, ARGENT developed a deceptive scheme to mass produce loans. ARGENT viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard for borrowers' long-term ability to afford them and to sustain ownership of their property.. ARGENT implemented this deceptive scheme through misleading marketing practices by advertising that it was one of the nation's largest lenders and could be trusted by consumers. ARGENT used this misleading advertising campaign to sell risky, unaffordable and unsustainable loans to consumers, the terms and dangers of which the consumers did not understand.

9 . ARGENT engaged in a pattern and practice of making adjustable rate loans without giving adequate regard and due care as to whether the borrowers could make the monthly payments if and when the interest rate increases. By reviewing the loan applications, qualifying the buyers, and then making the loans, ARGENT caused the borrowers to believe, and they reasonably believed, that they could afford to repay the loan and make the monthly payments. ARGENT'S conduct was deceptive, misleading and unfair because these borrowers in fact were not able, and could not reasonably be expected, to make the monthly payments at the increased interest rates.. ARGENT also engaged in a pattern and practice of making negative amortization loans, commonly referred to as NegAm loans, a particularly insidious type of loan scheme. With NegAm loans, the monthly payment does not cover the amount due for interest. The unpaid accrued interest is capitalized monthly into the outstanding balance, increasing the principal with each passing month. The borrowers' debt increases steadily and significantly over time. The result is that borrowers are trapped into loans that they cannot repay. Further, this increased debt substantially increases the loan-to-value ratio and reduces equity in the property. Borrowers are therefore unable to refinance the loan. NegAm loans, therefore, create a high and unacceptable risk that the borrower will lose their home, unable to repay the loan or refinance it. ARGENT failed to adequately disclose the risks and dangers of these loans to borrowers. 0. Furthermore, Defendants routinely and systematically violated the Truth in Lending Act ("TILA" U.S.C. 0, et seq.) and Federal Reserve Regulation Z ( C.F.R.., et seq.) which implements it. Such violations include, without limitation: a. Disclosures did not provide a separate written itemization of the amount financed that included good faith estimates of settlement costs, the amount of any proceeds distributed directly to the consumer, any amounts paid to other persons by Defendants on the consumer's behalf, the identity of other persons paid by Defendants on the consumer's behalf, and/or the prepaid finance charge. ( C.F.R..(c)(l).) b. Disclosures were based on estimates, but the disclosure statement did not state clearly that they were estimates ( C.F.R..(c)()(i).), and estimates were not based upon the best information reasonably available at the time of the disclosure. ( C.F.R..(c)()(i).).

10 c. The disclosed finance charges and other disclosures affected by the disclosed finance charge (including the amount financed and the annual percentage rate) were inaccurate. ( C.F.R. d. The annual percentage rate on loans were subject to increase after consummation and Defendants did not provide the booklet titled "Consumer Handbook on Adjustable Rate Mortgages" published by the Board and the Federal Home Loan Bank Board, or a suitable substitute. ( C.F.R..(b)(l).) e. Following an adjustment to the interest rate, Defendants failed to make new disclosures to the borrower, which set forth, at least, but no more than, calendar days before payment at a new level is due, current and prior interest rates; the index values upon which the current and prior interest rates are based; the extent to which Defendants has foregone any increase in the interest rate; the contractual effects of the adjustment, including the payment due after the adjustment is made, and a statement of the loan balance; the payment that would be required to fully amortize the loan at the new interest rate over the remainder of the loan term. ( C.F.R..(c).) f. Defendants failed to deliver notices of the right to rescind to each consumer entitled to rescind. ( C.F.R..(b)(l).). This pattern and practice of unlawful, unfair, and deceptive conduct of Defendants described herein occurred with the knowledge, approval and ratification of their officers, directors, executives and/or managers and DOES -0.. Borrowers have been devastated by Defendants' lending schemes. Borrowers have lost cash payments they made to purchase homes and the money spent on closing costs, which often was all or most of their savings. They and their families have to endure severe financial and emotional stress as they sought to make monthly payments on loans that were not affordable to begin with, and particularly after Defendants increased the amount of the monthly payments. In many cases, borrowers have lost their homes. Their families have been forced to move and to cope with harsh impacts to work, school, and relationships. Borrowers in default have had their credit ruined. And many of those that have lost their homes, have later been turned away from even renting a place to live because of their ruined credit,

11 Defendants' deceptive lending scheme has caused financial and personal devastation for families on a massive scale in this State. 8 VII. DEFENDANTS' WRONGFUL FORECLOSURES. The California legislature recently enacted Civil Code section.. The purpose of this law was to reduce foreclosures and to give borrowers access to informational resources and an opportunity to negotiate modifications of their loans. It establishes a process that requires the trustees and beneficiaries on loans in default to assess the financial situation of the borrower and to discuss options to avoid foreclosure. The statute further establishes waiting periods and requires declarations be made with any Notices of Default or Notice of Sale. '. Section. became operative on September, 08. The law contained a special provision for circumstances where the Notice of Default was recorded prior to the date the statute took effect. Section.(c) provides; If a mortgagee, trustee, beneficiary, or authorized agent had already filed the notice of default prior to the enactment of this section and did not subsequently file a notice of rescission, then the mortgagee, trustee, beneficiary, or authorized agent shall, as part of the notice of sale filed pursuant to Section f, include a declaration that either: () States that the borrower was contacted to assess the borrower's financial situation and to explore options for the borrower to avoid foreclosure. () Lists the efforts made, if any, to contact the borrower in the event no contact was made.. Demonstrating an appalling disregard for the law, Defendants routinely and systematically caused to be prepared and recorded declarations, under penalty of perjury, that contained false statements. These false statements were made knowingly or with reckless disregard of their truth or falsity. These false declarations were recorded with the Notices of Sale to expedite foreclosures of borrowers' homes and as a showing of compliance with Section... As a consequence of the recordation of these Notices of Sale under false pretenses and in violation of Section., borrowers have had their homes foreclosed upon. Defendants' pattern and practice of this unlawful, unfair, and deceptive conduct in connection with the false declarations occurred with the knowledge, approval and ratification of their officers, directors, executives and/or managers and DOES -0.

12 . The unlawful foreclosure of a person's property is egregious under any circumstances. But it is particularly so for these borrowers. The federal government has recently approved more than $00 billion dollars in response to the current financial crisis facing the nation under the program titled X Troubled Assets Relief Program ("TARP"). Government officials have indicated that a significant portion of these TARP funds are to be used to help families avoid losing their homes in foreclosure. New programs have been announced, and more are likely to follow, that are designed to offer relief to homeowners that are in default on their mortgages by modifying and restructuring their loans. The wrongful foreclosures by Defendants, described herein, have prevented these homeowners from participating in these new and future programs. 8. What makes Defendants conduct even more reprehensible is the fact that Defendant CITIGROUP, the parent company of Defendants CRL and CR TITLE, has obtained a massive bailout from the federal government consisting of $ billion under TARP and an agreement by the government to protect $0 billion of loans and securities on CITIGROUP'S books against losses. Thus, while these Defendants are obtaining unprecedented and massive relief through the funds of the taxpayers, including the borrowers, Defendants have established a system that involves the recordation of fraudulent documents in order to expedite the foreclosures of borrowers' homes, thereby depriving them of relief that otherwise would be available to them. VIII. DEFENDANT'S DECEPTIVE LOAN TO PLAINTIFFS AND THE WRONGFUL FORECLOSURE PROCEEDINGS. On December, 0, Defendant ARGENT made a loan to Plaintiffs Carlen Gregorio and Gertrudes Gregorio. The loan was made as part of its deceptive lending scheme described herein above. Defendants' committed unlawful, unfair and deceptive acts described herein above in connection with this loan to induce these Plaintiffs to agree to it. The loan was used to purchase the property located at Spring Creek Way, Elk Grove, California. Plaintiffs paid more than $,000 towards the purchase of the property. 0. Defendant ARGENT violated the Truth in Lending Act in connection with the loan. Such violations include, without limitation:

13 a. Defendant ARGENT failed to provide the required disclosures in connection with the annual percentage rate, the finance charge, the amount financed, the total payments, and the payment schedule in that it failed to clearly state that these items were only estimates. In fact, there was no statement anywhere on the disclosure statement informing the borrower that the disclosed amounts were merely estimates. ( C.F.R..(c)()(i).) b. The disclosure did not provide a separate written itemization of the amount financed that included good faith estimates of settlement costs. ( C.F.R..(c)(l).) c. The disclosure did not provide a separate written itemization of the amount financed that included the amount of any proceeds distributed directly to the consumer, any amounts paid to other persons by Defendant ARGENT on the consumer's behalf, the identity of other persons paid by Defendant ARGENT on the consumer's behalf, and the prepaid finance charge. ( C.F.R..(c)(l).) d. The annual percentage rate was subject to increase after consummation and Defendant ARGENT did not provide the booklet titled "Consumer Handbook on Adjustable Rate Mortgages" published by the Board and the Federal Home Loan Bank Board, or a suitable substitute. ( C.F.R..(b)(l).) e. Defendant ARGENT made an adjustment to the interest rate in a variable-rate transaction and did not make new disclosures to the consumer. ( C.F.R..(c).) f. At least, but no more than, calendar days before a payment at a new level was due, Defendant ARGENT did not disclose the current and prior interest rates, disclose the index values upon which the current and prior interest rates were based, the extent to which Defendant ARGENT has foregone any increase in the interest rate, the contractual effects of the adjustment, including the payment due after the adjustment is made, and a statement of the loan balance, the contractual effects of the adjustment, including the payment that would be required to fully amortize the loan at the new interest rate over the remainder of the loan term. ( C.F.R..(c).) g. Defendant ARGENT did not deliver two copies of the notice of the right to rescind to each consumer entitled to rescind. In fact, Defendant ARGENT did not deliver any notice of the right to rescind. ( C.F.R..(b)(l).)

14 . As the interest'rates were raised and monthly payments were increased, it became more and more difficult for the Gregorios to make the payments. Eventually they fell behind on the payments and Defendants began foreclosure proceedings by recording a Notice of Default against the property on July,08.. On November, 08, Defendants recorded a Notice of Trustee's Sale, a copy of which is attached hereto as Exhibit "A". The Notice of Sale contained the Declaration of Debbie Lee which, according to the Declaration itself, was given: "Pursuant to California Civil Code Section.(c) as a prerequisite to the filing of a Notice of Sale under California Civil Code Section f'. A copy of the Declaration is attached separately as Exhibit "B".. Ms. Lee, under penalty of perjury, declared that: "Citi Residential Lending Inc. has contacted the borrower to assess the borrower's financial situation and to explore options for the borrower to avoid foreclosure." Ms. Lee's statement was false. In fact, Defendant CRL did not contact Plaintiffs prior to filing the Notice of Sale.. Furthermore, Ms. Lee did not have personal knowledge of facts that pertained to this alleged contact of the Plaintiffs and she made the false statement with reckless disregard for its truth or falsity.. The Notice of Trustee's Sale scheduled the foreclosure sale for November, 08 at :0 a.m. in Sacramento, California. On November, 08, Plaintiffs' attorney wrote Defendants CRL, CR TITLE, and ARGENT, informing them that the Declaration of Debbie Lee was false and requesting that they cancel the foreclosure and rescind the Notice of Sale. Yet Defendants refused and failed to stop the foreclosure. FIRST CAUSE OF ACTION (Fraudulent Concealment - Civil Code 0, On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants). Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.. Defendants suppressed and concealed the following material facts:

15 a. that Defendant ARGENT sold risky, unaffordable and unsustainable loans to Plaintiffs and Class A Members, the terms and dangers of which Plaintiffs and Class A Members did not understand; b. that Defendant ARGENT sold adjustable rate loans without giving adequate regard and due care as to whether Plaintiffs and Class A Members could make the monthly payments if and when the interest rate increased; c. that Defendant ARGENT sold loans that created a high and unacceptable risk that Plaintiffs and Class A Members would lose their homes, unable to repay the loan or refinance it. Defendant ARGENT did such things routinely and systematically, as a pattern and practice; d. that Defendant ARGENT devised and maintained a deceptive lending scheme that involved unlawful, unfair and fraudulent activities, as described herein. 8. Defendants knew these facts and knew that Plaintiffs and Class A Members were unaware of these facts. Defendants also knew that Plaintiffs and Class A Members could not reasonably discover these facts given the complexity of the loan transaction and because they did not have access to Defendant ARGENT'S internal information as to how it marketed, processed and sold loans. Defendants therefore had a duty to disclose these facts to Plaintiffs and Class A Members.. Yet Defendants intentionally concealed and suppressed these facts to induce Plaintiffs and Class A Members to agree to the loans. Plaintiffs and Class A Members were unaware of these facts and would not have obtained the loans had they knew of the concealed and suppressed facts. 0. As a direct and proximate result of this concealment and suppression by Defendants, Plaintiffs and Class A Members suffered damages in an amount to be proven at trial.. In their concealment and suppression of these facts, Defendants, and each of them, acted with oppression, fraud, and/or malice, thereby entitling Plaintiffs and Class A Members to recover exemplary and punitive damages in an amount to be proven at trial.

16 SECOND CAUSE OF ACTION (Conspiracy to Defraud On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants). Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.. Plaintiffs and Class A Members are informed and believe and thereon allege that Defendants, and 8 and deceptive lending scheme, as set forth herein.. Plaintiffs and Class A Members are informed and believe and thereon allege that Defendants, and each of them, knowingly and intentionally conspired and agreed among themselves to commit the wrongful and fraudulent acts described herein above with the intent to defraud Plaintiffs and Class A Members.. Plaintiffs and Class A Members are informed and believe and thereon allege that Defendants, and each of them, formed and operated the conspiracy with each of the other Defendants to commit these wrongful and fraudulent acts, and that the acts were committed in furtherance of the conspiracy.. Plaintiffs and Class A Members are informed and believe and thereon allege that Defendants, and each of them, in committing the wrongful acts described herein, acted in concert with each other and together, and each conspired with, aided and abetted the others to further the objectives of the conspiracy.. As a direct and proximate result of this conspiracy of Defendants, Plaintiffs and Class A Members have suffered damages in an amount to be proven at trial. 8. In this conspiracy to defraud Plaintiffs and Class A Members, Defendants, and each of them, acted with oppression, fraud, and/or malice, thereby entitling Plaintiffs and Class A Members to recover exemplary and punitive damages in an amount to be proven at trial.

17 8 THIRD CAUSE OF ACTION (Violation of Bus. & Prof. Code 0, et seq - Deceptive Lending Practices On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants). Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative. 0. Commencing prior to December, 0, but continuing on that date and continuing thereafter, Defendants have engaged in unfair competition as that term is defined in Business and Professions Code section 0, which includes any "unlawful, unfair or fraudulent business act or practice".. Plaintiffs and Class A Members have suffered injury in fact and have lost money or property as a result of Defendants' unfair competition. Plaintiffs pursue this claim on behalf of Class A Members and meets the standing requirements of Business and Professions Code section and complies with section 8 of the Code of Civil Procedure,. Defendants have engaged in an unlawful, unfair or fraudulent business acts or practices by, inter alia, the following: a. selling risky, unaffordable and unsustainable loans to Plaintiffs and Class A Members, the terms and dangers of which Plaintiffs and Class A Members did not understand; b. selling adjustable rate loans without giving adequate regard and due care as to whether Plaintiffs and Class A Members could make the monthly payments if and when the interest rate increased; c. selling loans that created a high and unacceptable risk that the Plaintiffs and Class A Members would lose their homes, unable to repay the loan or refinance it; d. fraudulently concealing and suppressing material facts from Plaintiffs and Class A with the intent to induce them to obtain loans, as described above; e. devising and maintaining a deceptive lending scheme as described herein.

18 . Plaintiffs acting on behalf of themselves and Class A Members seek to restore to any person in interest any money or property, real or personal, which may have been acquired by means of Defendants' unfair competition and further seeks restitution to effect complete justice. FOURTH CAUSE OF ACTION (Violation of Bus. & Prof. Code 0, et seq - Truth in Lending Act Violations On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants). Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative. r\s:. Commencing prior to December, 0, but continuing on that date and continuing thereafter, Defendants have engaged in unfair competition as that term is defined in Business and Professions Code section 0, which includes any "unlawful, unfair or fraudulent business act or practice".. Plaintiffs and Class A Members have suffered injury in fact and have lost money or property as a result of Defendants' unfair competition. Plaintiffs pursue this claim on behalf of Class A Members and meets the standing requirements of Business and Professions Code section and complies with section 8 of the Code of Civil Procedure,. Defendants have engaged in unlawful, unfair or fraudulent business acts or practices by violating the Truth in Lending Act as described herein. This cause of action is based solely upon Defendants' Truth in Lending Act violations. 8. Plaintiffs acting on behalf of themselves and Class A Members seek to restore to any person in interest any money or property, real or personal, which may have been acquired by means of Defendants' unfair competition and further seeks restitution to effect complete justice.. Plaintiffs and Class A Members are also entitled to statutory damages, actual damages, costs, and attorneys' fees. III

19 8 should be given back to Plaintiffs and Class A Members. Defendants must make restitution of all amounts and property so improperly and unjustly obtained according to proof, plus interest at the maximum legal rate. FIFTH CAUSE OF ACTION (Unjust Enrichment On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants) 0. Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.. Defendants have been unjustly enriched because they gained and retained money in an inequitable manner by its deceptive lending scheme and the unlawful, unfair and fraudulent conduct described herein at the expense of Plaintiffs and Class A Members and thus must restore such money. Defendants may not retain the money and property acquired from its improper conduct and that money instead SIXTH CAUSE OF ACTION (Negligence On Behalf of Plaintiffs Gregorios and Class A Members Against All Defendants). Plaintiffs and Class A Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.. As described herein, Defendants were negligent and failed to use reasonable care in selling loans to Plaintiffs and Class A Members. As a direct and proximate result, Plaintiffs and Class A Members suffered damages in an amount to be proven at trial. SEVENTH CAUSE OF ACTION (Wrongful Foreclosure On Behalf of Plaintiffs Gregorios and Class B and Class C Members Against All Defendants). Plaintiffs and Class B and Class C Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.

20 . As described herein, Defendants caused to be prepared and recorded a Notice of Trustee's Sale containing a false declaration against Plaintiffs' property.. Defendants also routinely and systematically caused to be prepared and recorded Notices of Trustee's Sale containing false declarations against the property of Class B and Class C members. These declarations, made under penalty of perjury, declared that: "Citi Residential Lending Inc. has contacted the borrower to assess the borrower's financial situation and to explore options for the borrower to avoid foreclosure." These declarations were false. In fact, Defendant CRL did not contact Class B and Class C members prior to filing the Notice of Sale.. Furthermore, employees, agents and representatives of Defendants that prepared these declarations did not have personal knowledge of facts that pertained to this alleged contact of the Plaintiffs and Class B and Class C Members, and they made these false statements with reckless disregard for its truth or falsity. These false declarations were prepared in a manner, and in accord with systems and procedures, that were known, approved and ratified by Defendants. 8. Plaintiffs have been informed that on November, 08 at :0 a.m. in Sacramento, California that Defendants sold, or caused to be sold, Plaintiffs property located Spring Creek Way, Elk Grove, California at a trustee's sale pursuant to the fraudulent Notice of Trustee's Sale.. Furthermore, Defendants routinely and systematically caused to be sold the properties of Class C members pursuant to these fraudulent Notices of Trustee's Sale. 80. Defendants caused the property of Plaintiffs and Class C members to be sold under false pretenses and in violation of California Civil Code.(c). 8. These Notices of Trustee's Sale, and all further proceedings taken thereon, are therefore null and void and of no force and effect. 8. Prior to the sale of Plaintiffs' property, Plaintiff's counsel notified Defendants in writing and with repeated phone calls that the Notice of Trustee's Sale contained a false declaration. Yet Defendants

21 8 ignored these efforts on the part of Plaintiffs to stop the wrongful foreclosure and proceeded with the sale, thus demonstrating their reckless indifference and wanton disregard for the rights of Plaintiffs. 8. Defendants have caused Plaintiffs and Class C Members to lose their homes and property, have been forced to relocate, and suffered the distress and disruption their families, and have been deprived of the opportunity to participate in newly developed government programs designed to save their homes. 8. As a direct and proximate of Defendants' wrongful foreclosure, Plaintiffs and Class C Members have suffered damages in an amount to be proven at trial. 8. Plaintiffs and Class B and Class C Members are entitled to an order rendering the Notice of Trustee's Sale null and void and to attorneys' fees. 8. Plaintiffs and Class C Members are entitled to an order setting aside the trustee's sale. 8. Defendants, and each of them, have acted with oppression, fraud, and/or malice in connection with the false declarations and wrongful foreclosures, thereby entitling Plaintiffs and Class B and Class C Members to recover exemplary and punitive damages in an amount to be proven at trial. EIGHTH CAUSE OF ACTION (Cancellation of Written Instruments On Behalf of Plaintiffs Gregorios and Class B and Class C Members Against All Defendants). Plaintiffs and Class B and Class C Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative. 8. Defendants have prepared and caused to be recorded Notices of Trustee's Sales that contain a false declaration and violate California Civil Code.(c) against the properties of Plantiffs and Class B and Class C Members. 0. Trustees conducting the trustee's sales, on behalf of and for the benefit of Defendants, in the course of the wrongful foreclosures of the properties of Plaintiffs' and Class C Members', as described

22 herein, have signed and delivered to Defendants deeds that purportedly conveyed the real property to 8 Defendants.. These Notices of Trustee's Sale and Trustee Sale Deeds are null and void and of no force and effect.. Accordingly, Plaintiffs and Class B and Class C Members are entitled to cancellation of these Notices of Trustee's Sale, and to damages incurred due to the Defendants wrongful acts described herein.. Plaintiffs and Class C Members are entitled to cancellation of these Trustee Sale Deeds, and to damages incurred due to the Defendants wrongful acts described herein. NINTH CAUSE OF ACTION (Violation of Bus. & Prof. Code 0, et seq - Wrongful Foreclosures On Behalf of Plaintiffs Gregorios and Class B and Class C Members Against All Defendants). Plaintiffs and Class B and Class C Members reallege each of the foregoing paragraphs as though fully set forth herein and, to the extent necessary, plead this cause of action in the alternative.. Commencing on or after September, 08, but continuing on that date and continuing thereafter, / Defendants have engaged in unfair competition as that term is defined in Business and Professions Code section 0, which includes any "unlawful, unfair or fraudulent business act or practice".. Plaintiffs and Class B and Class C Members have suffered injury in fact and have lost money or property as a result of Defendants' unfair competition. Plaintiffs pursue this claim on behalf of Class B and Class C Members and meet the standing requirements of Business and Professions Code section and comply with section 8 of the Code of Civil Procedure.. As described herein above, Defendants engaged in unlawful, unfair or fraudulent business acts or practices by causing to be prepared and recorded Notices of Trustee's Sales against the property of Plaintiffs and Class B and Class C Members that contain false declarations and in violation of California

23 8 Civil Code section.(c), and by wrongfully foreclosing on the property of Plaintiffs and Class B Members. 8. Plaintiffs acting on behalf of themselves and Class B and Class C Members, seek to restore to any person in interest any money or property, real or personal, which may have been acquired by means of Defendants' unfair competition and further seeks restitution to effect complete justice. PRAYER FOR RELIEF WHEREFORE, Plaintiffs and Class A, Class B and Class C Members pray for judgment as follows: As to the FIRST and SECOND CAUSES OF ACTION Against All Defendants, jointly and severally:. For general damages, according to proof;. For special damages, according to proof;. For exemplary and punitive damages, according to proof. As to the THIRD and NINTH CAUSES OF ACTION Against All Defendants, jointly and severally:. For restitution;. For disgorgement of profits and sums wrongfully obtained;. For an injunction ordering Defendants to cease and desist from engaging in the unfair, unlawful, and/or fraudulent practices alleged in the Complaint. For other appropriate equitable relief. As to the FOURTH CA USE OF ACTION Against All Defendants, jointly and severally:. For restitution;. For disgorgement of profits and sums wrongfully obtained;. For injunctive and other appropriate equitable relief;. For actual damages;. For statutory damages and penalties;. For attorneys' fees. As to the FIFTH and SIXTH CA USES OF ACTION Against All Defendants, jointly and severally:. For general damages, according to proof;. For special damages, according to proof.

24 As to the SEVENTH and EIGHTH CA USES OF ACTION Against All Defendants, jointly and severally: 8. For general damages, according to proof;. For special damages, according to proof;. For an order setting aside the trustee sales;. For an order cancelling the trustee sale deeds;. For injunctive and other appropriate equitable relief. As to the All Causes of Action Against All Defendants, jointly and severally:. For an Order certifying this action as a class action and appointing counsel for Plaintiffs as counsel for the classes, and that notice to the classes be paid by Defendants;. For attorneys' fees pursuant to Code of Civil Procedure., or pursuant to the common fund theory.. For costs of suit herein.. For pre- and post-judgment interest rate at the maximum legal rate.. For such other and further relief as this Court may deem just and proper. DEMAND FOR JURY TRIAL Plaintiffs hereby demand a jury trial on all causes of action and claims with respect to which they have a right to jury trial. Cracolice & Associates lamps R. Cracolice Attorney for Plaintiffs Gregorios, on behalf of themselves and all others similarly situated Date: