An Oakland, Calif., couple refinanced a $200,000 junior lien they already had with National City Bank. The new $250,000 loan was based on stated-income, as was the original note. But even though the couple committed mortgage fraud on the second transaction, a bankruptcy judge refused to have National City's loan excepted from discharge because the bank had failed to prove it reasonably relied on the fraudulent statement of income, a summary prepared by Weiner Brodsky Sidman Kider PC said.
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