Elk Grove Vice Mayor Ly Sued by Credit Union For Loan Default, Credit Card Debt

October 21, 2016 |  

According to public documents on file at the Sacramento Superior Court, Elk Grove Mayoral candidate and Vice Mayor Steve Ly and his wife were sued by a Sacramento-area credit union for a home loan default and unpaid credit card debt.

In a suit filed on behalf of the Sacramento Credit Union, Ly and his wife Cua Kicuab Lo-Ly were sued by the Sacramento Credit Union. The suit, Case Number 34-2009-00054013 was filed on July 24, 2009.

The suit, which was handled by The Law Offices of John D. Creedon, was for breach of written contract, equity loan and breach of contract, Visa card.

The complaint says “on or about 12/04, defendants entered into a [sic] equity loan with plaintiff…Defendants [Mr. & Mrs. Ly] allege that the security for said loan was sold in a short sale, thus the security is valueless to Plaintiff, a sold-out junior lienholder that therefore sues directly on the note.”

The complaint further states that “on or about 2/15/08, Defendant(s) breached the term of the aforementioned written loan agreement by failing to pay Plaintiff those payments due on or after that date.” The complaint says that the Ly’s damaged the Plaintiff “in the aggregate principal sum of $52,284.15 along with interest at the contract rate of 6.99% equaling a daily interest in the sum of $10.01 from 2/5/08, the date of Defendants’ last payment, through the date of entry of judgment.”

Additionally, the complaint said the Defendants breached a contract on a Visa revolving line of credit that was entered into on 3/2/04. “As a result of the Defendants refusal to cure the breach, Plaintiff has been damaged in the aggregate principal sum of $8,143.32 along with interest at the contract rate of 10.99% equaling a daily interest rate of $2.45 from 10/1/08 through the date of entry of judgment.” 

Regarding the credit card default, the suit says “On 11/14/08, Defendant(s) breached the terms of the aforementioned written loan agreement by failing to pay to Plaintiff those payments due on or after that date. 

The document accompanying the lawsuit includes an account computer screenshot that shows a home equity loan for 6105 Tom Way, Elk Grove, Calif. 95758 (pictured above, see Zillow information here; scroll to price/tax history to see property transaction history). Other information displayed in the screen shot included the following fields and entries respectively:

• Account Status – Charge Off
• Collateral Type – Home equity 
• Collateral Description – 2nd Deed of Trust
• Days Deliq – 301
• Credit Score – 686
• Bankruptcy Score – 0482
• Notes field – "MEMBER EXPELLED CHARGED OFF HOME EQUITY LO”

Typically in California, when a house is sold as a foreclosure or on a short sale, which is the indication of how the property on Tom Way in exhibits for Sacramento Credit Union’s complaint was disposed of, junior lien holders have no recourse. 

Through several subsequent filings, the matter was resolved a little more than two years ago on May 15, 2014, and the case was closed.  Terms of the resolution were not included in the court documents. 

See court documents here.