Free Response to Motion - District Court of Colorado - Colorado

Case 1:03-cv-02485-MSK-PAC

Document 345-17

Filed 02/16/2006

Page 1 of 10

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

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Civil Action No. 03-MK-2485
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CAMILLE MELONAKIS-KURZ, individually and on behalf of other similarly situated employees,

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Plaintiff,
v.

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Defendant. ----------.---~~7 fF f'~ ~ --------- --_._--------.----. --.
HEARTLAND HOME FINANCE, INC.,

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iq:

-------------------------------------------------------PURSUANT TO NOTICE, the videotape depos i tion of JEFFREY S. HORTON was taken on behalf of the Defendant at 1900 Grant Street, Suite 800, Denver,
Co lor ado 8 0 2 0 3 ,on De c e mb e r 1, 2 0 0 5 , at 8: 1 2 a. m . be for e

VIDEOTAPE DEPOSITION OF: JEFFREY S. HORTON December 1, 2005

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Stacy L. Armstrong, Certified Shorthand Reporter, Certified Merit Reporter, and Notary Public wi thin

Colorado.
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For the Plaintiff:
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APPEARANCES
JILL M. NOVAK, ESQ. Nichols Kaster & Anderson PLLP

4600 IDS Center
For the Defendant:

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Minneapolis, Minnesota 55402 ELI ZABETH RAYMOND, ESQ. Ice Miller One American Square, Box 82001 Indianapolis, Indiana 46282
Martin Pieczynski Dennis Clayton, Videographer

Also Present:
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Case 1:03-cv-02485-MSK-PAC

Document 345-17

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Jeffrey S. Horton 12/1/2005 Camille Melonakis-Kurz, et aL. v. Heartland Home Finance, Inc.

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1 income, value of the home versus what they owe.

2 Q. And you said that you would present the
3

options, as many as were possible, to the client.

How

4 would you do that?
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MS. NOVAK:
Q.

Obj ection; vague.

6

(BY MS. RAYMOND)

Do you understand my

7 question, Mr. Horton?
8

A.

I think I understand your question.

It's

9 difficult to answer because with each client every

10 situation is different, so there's no -- there i s no set
11 pattern to how I would approach presenting multiple
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options.

I can tell you that personally I would

13 present -- if there were multiple options, I would

14 present them in such a manner that would hopefully lead
15 the client to make the decision that put them in the

16 best possible loan. A lot of times -- A lot of times
17 clients just don't understand, to be honest with you,
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what's best for them.

But the decision was always
If I could

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theirs, and I respected their decision.

20 possibly do the loan that they wanted me to do, then
21 that's what I would attempt to do.
22
Q.

If a customer was confused by the options,

23 would you explain them to them?
24
A.
Q.

Absolutely.
Is it fair to say that you would consult with

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Document 345-17

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Jeffrey S. Horton 12/1/2005 Camille Melonakis-Kurz, et aL. v. Heartland Home Finance, Inc.

1 them regarding the various options?
2

20

MS. NOVAK:

Obj ection; vague as to the word

3 consul t in this context.
4

Q.

(BY MS. RAYMOND)

Do you understand the

5 word consul t, Mr. Horton?
6

A.

I understand the word.

No, I would not say

7 tha t I would consul t with the client.
8

Q.

But you would advise them?

I would -- I would have them rei tera te their 10 goals, and I would go over their options again so that 11 they could determine which possible scenario, if there 12 was more than one, best fit their objectives and goals.
9

A.

13

Q.

You said there was no set pattern for

14 presenting to the client the different options, right?
15 A. (Deponen t nodded head up and down.)

16 Q. Did you ever present the client with a written
17 proposal, a wr i t ten loan proposal?

18 A. Not unless we sent out the entire packet of
19 RES PA documents.
20 21
Q.

And did you ever do tha t?
Yes.
It was the only way that we had of

A.

22 generating the signatures required on those documents to 23 proceed and eventually close the loan.
24
Q.

Wha t kind of information would be in a loan

25 proposal?

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1

A.

The function of the application was to give us

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a lead so that we had a name and number to call.

There

3 would be times when the telemarketer or the individual,

4 if entering the information on line, indicated what they
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were trying to accompl ish.

But the -- the lead that was

6 generated for us was nothing more than a lead, contact
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informa tion.

It was our job to delve into the cl ient ' s

8 si tuation and determine what their goals and needs were.
9

Q.

Correct me if I'm wrong, but did you say that

10 after you got a commi tment then you would turn over the

11 file to the processor for the next step?
12

A.

After we got the commitment from the client,
Once we

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we would generate the RESPAs and mail them out.

14 got the signed documents back, I believe that was the

15 procedure, then we gave the file -- we stacked the file

16 in a folder and gave it to the processor.
17
Q.

Did you ever have a client who hesitated about

18 giving their commitment?
19
A.
Q.

All the time.

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21 22

What would you do in those situations?

A.

Try and overcome whatever objections that they

might have to to doing a particular loan, and if not 23 succes s ful, then it's a turndown; went on to the next

24 lead.
25
Q.

Can you recall a specific example of a

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Jeffrey S. Horton 12/1/2005 Camile Melonakis-Kurz, et aL. v. Heartland Home Finance, Inc.
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1 customer who had obj ections that you helped them

2 overcome or that you explained the situation to?
3

A.

No, I can't recall a specific situation.

4 Those things happen, you know, on a regular basis.
5 6

Q.

What kind of objections would a client have?

A.

More often than not, from when I worked at

7 Heartland, it was, as it is wi th a lot of companies, to

8 be honest, fees.

9 Q. I f a client obj ected to fees, how would you
10 help them overcome that objection?
11
A.

Well, if there were fees that -- that I was

12 allowed to reduce or eliminate, and it was still a

13 beneficial loan for the client as well as for myself and
14 the company, then I would eliminate whatever fees I
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could. If -- If the loan the way, that it was set up, 16 because there wasn i t enough room because of the value of

17 the home versus what they owed, if those fees had
18 already been reduced to the minimum and there was no way

19 the reduce them further, then there wasn't anything that
20 I could do regarding fees.
21
Q.

Can you recall any other obj ections that your

22 clients had other than fees?
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A.
Q.

Not specifically.

Generally can you remember any?
MS. NOVAK:
Obj ection; asked and answered.

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1

Q.

(BY MS. RAYMOND)

You can answer the

2 question.
3

A.

Again, in general terms, I mean, every client

4 is different, so people can object to not saving them
5 enough money, people are going to obj ect to not giving
6 them enough cash, people can obj ect to the length of a
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fixed term versus an adjustable rate.

It's just --

8 There are literally hundreds of different possible
9 scenarios, and there i s no way to try and recall each and

10 everyone of those.
11
Q.

If the client refused the loan, what was the

12 procedure then?
13
A.

It was considered a turndown, and by RESPA law

14 we're required to send out a statement of denial, at
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least at Heartland we were required to.

I don't -- My

16 understanding is that's not truly a requirement of
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RSP -- of RESPA.

The bank itself, if declined by the

18 bank, the bank is required to send out the denial. 19 But -- But we did send out denial, statement of denial 20 forms to clients.
21
Q.

Was the statement of denial something that you

22 wrote?
23
A.

It's one of the documents that's in the

24 computer system software, just click on a button and

25 print it.
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1 Q. Did you ever explain a denial to a customer?
2 A. If the client i s loan was turned down by
3 Heartland, then we would let them know that their loan

4 was declined.
5

Q.

If the loan was declined by Heartland, would

6 you give them examples of where else they could go to

7 get a loan?
8

A.

No, not usually.

I don't recall ever doing

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that.
Q.

I can't imagine that -- I can't imagine that I

10 would.
11

You said earlier that, for the most part of

12 the time that you were at Heartland, if -- if the loan
13 was declined by Heartland that you could go to an

14 outside lender?
15
A.
Q.

Uh-huh.
Would you describe that process for me,

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17 please?
18

A.

Well, we had other -- other sources for
And if it

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funding of loans, so we had outside lenders.

20 didn't fi t the parameters under Heartland's guidelines,

21 we were al lowed to make contacts wi th other lenders,

22 presen t the scenario, and see if it would meet thei r

23 guidelines, and if so, sell the loan through that
24 outside source, which allowed the client still to get
25 their loan done and allowed us as loan officers to still

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I communica tions?
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A.

To determine value on the property, sometimes

3 to determine what locations different appraisers
4 would -- would go to and what their fees were.
5

Q.

Did your clients ever obj ect to an appraisal
I don 't -- I don i t recall specifically, but
If they did object to an appraisal fee, what

6 fee?
7

A.

8 I -- that would not be uncommon.
9

Q.

10 would you do?

Aga in, I don't recall any speci f ic s i tua tions 12 where they did.
11

A.

13

Q.

Mr. Horton, earlier we talked about clients'

14 objections to fees and about how you, if it were

15 possible, based on the situation, might adjust the fees 16 to addres s those obj ections; is tha t right?
17

A.
Q.

Uh-huh, that i s correct.
How would you decide what fees to charge?

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19

A.

There were set fees that we were required to
The only fee, as I

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charge based upon Heartland's fees.

21 recall, that we had any kind of -- I mean personally

22 that we could make decisions on adjusting was the
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origination fee.

Everything else, if any fee needed to

24 be reduced or eliminated or changed in any way, had to 25 have management approval. And I don r t recall -- I don 't
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1 reca I I speci fic si t ua tions where that occurred.
2

Q.

But you had discretion to change the

3 origination fee?
4

A. Q.

Uh-huh.

Yes.

5

What about broker fees, did you have any role

6 in determining what those would be?
7
8

A.
Q.

Can you give me an example of a broker fee?

Sure.
MS. NOVAK:

I f I can jus t get something on the 10 record before my client actually looks at this document.
9

11 I want to renew our request for the production of the
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underlying documents used to make this compilation.

I

13 also want to reserve my right to recall this wi tness 14 should we find out that the data listed in this 15 compilation is unreliable or inaccurate.
16
Q.
(BY MS. RAYMOND)

Mr. Horton, the document

17 that I passed to you is something that Heartland
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developed.

It's a summary of loans that you closed
Looking at the column

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while you were at Heartland.

20 for broker fee, does that help refresh your memory

21 about how you might decide to
22
A.

No, because I don't know what they're using to

23 determine broker fee.
24
Q.

Do you recall charging a broker fee in that

25 specific loan?
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1

MS. NOVAK:

Obj ection; counsel didn't ask a

2 question about a specific loan on here.
3

Q.

(BY MS. RAYMOND)

In the Collins loan, for
I don 't

4 example, where there's an $1800 broker fee.
5

A.

I don't know what that fee is for.

6 know wha t -- I don i t know what is being used to
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determine broker fee.
MS. NOVAK:

On the good faith estimate broker

8 fee could be four or five different charges.
9

I don't want you to guess ei ther,
If I saw the good faith

10 if you don't know.
11

A.

I have no idea.

12 estimate from that specific loan, I could tell you.
13
Q.

(BY MS. RAYMOND)

If you look at the two

14 columns, Mr. Horton, for fees paid and fees
15 backslash loan, do you see those two columns?
16
17

A.
Q.

I do.

How did you decide what percentage of the fee

18 would be charged?
19
A.

I don't understand your question. Whatever

20 the fees total versus the value versus the loan amount
21
is how they determine fees per loan.
It's a

22 compilation.
23
24
Q.

Okay.

A.
Q.

Divide one in to the other.
And the percentages of the loan amount are

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