Skinner v. Cen-Pen Corp.

This usury case involves a creditor’s use of a so-called “wraparound” note to increase its interest rate and loan charges.

On January 4, 1984, Michael W. Skinner and Sharon A. Skinner (the Skinners), whose residence was encumbered by a first deed of trust, talked to Donald R. Carrithers about arranging a loan for them and paid Carrithers Realty Company $750 as a “mortgage fee” to obtain the loan. Donald R. Carrithers apparently arranged to have Cen-Pen Corporation (Cen-Pen) make the loan.

On February 10, 1984, the Skinners signed a $50,000 bearer note, secured by a second deed of trust upon…