Simi Valley accepts $60k settlement, dismisses affordable housing lawsuit [Ventura County Star, Calif.]

Nov. 01--A couple has paid $60,000 to Simi Valley to settle a lawsuit that was filed after they purchased one of the city's affordable housing units even though they didn't qualify as low-income buyers.

Defendants Kevin and Kari Bosworth also agreed to find a replacement residence for the city to buy for its affordable housing program. The Bosworths didn't pay anything out of pocket for the replacement property, but their title insurance company did, their attorney said.

The settlement was announced at Monday night's City Council meeting by acting City Attorney Sonia Hehir.

In return for receiving the $60,000, the city dismissed the Ventura County Superior Court lawsuit it had filed in 2009 against the couple and Mortgage Registration Systems Inc. of Simi Valley, which holds the mortgage to the property. The settlement money will pay attorneys' fees the city incurred to litigate the suit.

"This is a great result for the city," said Newport Beach attorney Allison Burns, who represented Simi Valley in the case. "It got what it wanted, which was an affordable housing unit that can be purchased by a low-income buyer." The Bosworths' attorney, Craig Granet, said the settlement was a good one for his clients, too.

"We were able to keep the Bosworths in their home," the Santa Barbara lawyer said. The couple didn't know the residence was an affordable housing unit when they bought it, Granet said.

The Bosworths purchased the condominium on Crowne Oak Lane in 2008 from Rodrigo and Irma De Leon, who were also named as defendants in the lawsuit.

According to the suit, the De Leons, who bought the unit in 2000, sold it to the Bosworths for much more than they were allowed to under the program.

Granet said he believes the unit was sold for about $360,000, nearly double the program's resale ceiling.

The De Leons sold the unit to the Bosworths knowing they didn't qualify as low-income buyers, the suit alleged. Under the affordable housing program, the maximum a four-person household could make annually at the time of the purchase was $68,950. The Bosworths have two children and their income exceeded the limit.

But the De Leons did not tell the Bosworths that the property was an affordable housing unit, Granet said.

"The Bosworths had no idea that this was an affordable housing unit," he said. "The De Leons never disclosed that to them."

The De Leons allegedly violated another affordable housing program covenant by not informing the city about the proposed sale beforehand. The city stated in the lawsuit that it would not have approved the sale had it known.

The De Leons later filed for bankruptcy. Their whereabouts are unknown, Granet said.

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