HUNTINGTON — A Milton couple is suing Countrywide Home Loans, Inc., for participating in predatory lending practices that caused them harm.
Bank of America, N.A. and the Bank of New York Mellon were also named as defendants in the suit.
In Spring 2005, Countrywide called Rita A. Petty and Edward C. Petty and pressured them to refinance their home, according to a complaint filed Aug. 30 in Cabell Circuit Court.
The Pettys claim thereafter, prior to the loan closing, Countrywide called them and informed them their home had a value of $112,000, and based on Countrywide’s professed expertise and reputation as a large, reputable national lender, they relied on Countrywide’s representation of the value of their home when agreeing to enter the loan.
On June 23, 2005, Countrywide’s closing agent came to the Petty residence to close the loan, which had a principal balance of $105,300, according to the suit, and instructed the Pettys to sign some papers, but provided them with no meaningful explanation of the loan terms.
The Pettys claim in June they learned the market value of their home seven years earlier was approximately $74,100, and that Countrywide had misrepresented the value of the home to them to induce them into a larger loan.
Countrywide sold the loan to the Bank of New York Mellon in September 2005 and Bank of America’s predecessor in interest was made the servicing agent of the holder for the loan, according to the suit.
The Pettys claim in August 2010 they began to struggle with the loan payments and when they were approximately two months behind on their loan, Bank of America called them and informed them they qualified for a loan modification to lower the payments to an affordable level.
During the same call, Bank of America instructed them to not make any further payments on the account until they received the loan modification documents, according to the suit, but in June 2011, Bank of America sent them a letter stating that it had denied them for modification, purportedly for lack of documentation.
The Pettys claim they had repeatedly submitted income and other documentation at Bank of America’s request.
In October 2011, Bank of America advised the Pettys that it was proceeding with foreclosure and that their only option to save their home was to pay a lump sum payment of more than $10,000, according to the suit, and the Pettys had to file bankruptcy as their only option to save their home.
The Pettys claim the defendants falsely represented the market value of their home and caused them hardship.
The defendants’ actions breached their duties of good faith with the Pettys and did so intentionally, wantonly and/or recklessly, according to the suit.
The Pettys are seeking compensatory and punitive damages. They are being represented by Jennifer S. Wagner and Daniel F. Hedges.
The case has been assigned to Circuit Judge David M. Pancake.
Cabell Circuit Court case number: 12-C-564