MEMORANDUM OPINION AND ORDER
Pending before the court is the plaintiffs' First Request for Default Judgment [Docket 47]. For the following reasons, the Request is GRANTED.
This case was brought by two women claiming they were defrauded into signing a promissory note, for no consideration, in a home-refinancing transaction. The clerk has entered a default against the only remaining defendants. The only remaining issue is whether default judgment is now appropriate.
In September 2006, plaintiff Deborah Viera fell behind on her mortgage payments. Viera's sister, an employee of defendant Chehaiber & Sons Corporation ("Chehaiber & Sons"), referred Viera to defendant Jay Chehaiber ("Chehaiber"), the company's owner. Viera contends Chehaiber "convinced" her to refinance her mortgage through a "sham sale" to her mother, plaintiff Rose Marie Perez. (Compl. ¶ 14.)
Under this "sham sale," Viera transferred the title of the property to her mother, but retained possession and agreed to continue paying the mortgage. Viera asserts she was ignorant of the refinancing process, and that she relied on Chehaiber to act as an intermediary. "[F]acing the potential loss of her home," she "had to trust [Chehaiber] and follow their instructions through the refinance process." (Compl. ¶ 15.)
In October 2006, Viera and Perez went through with the refinancing. Viera's existing mortgage in the amount of $409,018.90 was paid off. The sale price of the property was recorded at $540,000.00. National City Mortgage Company financed two new loans on the property: a first mortgage for $432,000.00 and a second mortgage for $108,000.00.
The plaintiffs allege that, at the closing, Chehaiber "slipped a $126,500.00 unsecured promissory note from [Viera] to Amity Enterprise Inc. into the loan documents" (the "note"). (Compl. ¶ 17.) Trusting Chehaiber, Viera signed the note at the loan signing, without being given any consideration. According to Viera, Amity Enterprises is "a dba registered by Defendant Chehaiber." (Id.) She asserts that Chehaiber "then used the [note] to make a demand on escrow for $117,250.67, the difference between the payoff of the previous mortgage and the total of the new loans, that [Viera] would have received." (Id.) Eastland Escrow then paid Chehaiber $117, 250.67. Chehaiber signed documents on behalf of Amity Enterprises and submitted them to Eastland.
The plaintiffs maintain that they were never given copies of the loan documents, a rescission notice, or a truth-in-lending statement. They also allege that the loan documents state Viera's address as a post office box in Chino Hills, CA, which is the same address given for Amity Enterprises. Thus, they contend, "[u]sing a PO Box under [Chehaiber's] control as [Viera's] address prevented [Viera] from receiving any documents that would reveal [Chehaiber's] fraud." (Compl. ¶ 18.)
Furthermore, the plaintiffs contend that they only received copies of the loan documents after the closing, when Viera began working for Chehaiber and she discovered them at work. According to the plaintiffs, "Chehaiber promised to pay all the money back, and said he would ...