West Virginia Homeowner Facing Foreclosure In Lawsuit Involving Mortgage Refinance Dispute

In Vienna, West Virginia, the Sunday Gazette-Mail reports on another story of a homeowner who appears to have been screwed over in a mortgage refinance of the family home.

• For seven years, 78-year-old Jerry Davis made payments on a $36,700 mortgage he and his late wife took out on their home, on land that was part of his parents’ farm. Then in November 2004, he said, he received a monthly bill for $38,000. Pay this month, it said, or face further action. His mortgage contains a “balloon” clause. That means the mortgage-holder can send the borrower a lump-sum bill for the entire remaining debt, after the borrower pays for years. Balloons are illegal under state law, but federal law, which allows them, supercedes state law.

[...]

• “Usually, these lenders tell people orally that they can refinance, but they don’t write it into the contract. This time, they did. So Select Portfolio, representing Bank of America, was refusing to honor the contract,” said [attorney] Dan Hedges, who represents Davis. He has filed suit on Davis’ behalf.

Hedges is with the non-profit law firm Mountain State Justice. The financial companies mentioned in this story are Select Portfolio Services (formerly known as Fairbanks Capital Corporation), Bank of America, and EquiCredit. For more, see Their stories: ‘I was sick at my stomach’.

For related West Virginia stories from the Sunday Gazette-Mail, see:

• Fayette widow: ‘I got tricked’,
• ‘I just have to trust in the Lord’.

Go here for more posts on homeowners who have refinanced into bad mortgage loans and are now using the Federal TILA to try and undo the bad loans. undo mortgage loans TILA alpha