- Case No. 18-10559
- Adv. No. 18-1039
ISSUES: (A) Was the information the debtor supplied to lender about having a roommate materially false? If so, (2) did the debtor intend to deceive lender and (3) did lender reasonably rely on the false statements?
RULING: (A) The debtor’s withholding from the lender that she did not have a roommate and paid more than half of her net monthly income in rent was a materially false statement because of the impact it had on assets available to pay the loan she sought. (B) The debtor had motive to misrepresent her financial condition and this, coupled with her implausible trial testimony, supports a finding that the debtor recklessly disregarded the truth and intended to deceive the lender. (C) Because minimal investigation by the lender would have revealed the falsity of the debtor’s representations, lender failed to carry its burden to show it reasonably relied on the debtor’s misrepresentation.