Man sues the First State Bank for illegal servicing practices
Kyla Asbury Sep. 17, 2012, 7:00am
HUNTINGTON – A man is suing the First State Bank for participating in illegal servicing practices that caused him to suffer financial hardship and attempting to foreclose his home.
In December 2008, Charles A. Watson located a house on the same street as his daughter that was for sale and spoke with a loan officer of the First State Bank named Jackie Cantley, according to a complaint filed Aug. 20 in Cabell Circuit Court.
Watson claims at the time he had recently became unemployed and had informed Cantley of that, but the loan application indicated he was employed.
At the time of closing, Watson was directed to sign several documents and was not given an explanation or opportunity to understand the documents, according to the suit, and it was not until later that he discovered the loan was a five-year balloon loan and that the documents did not contain the balloon disclosure required by law.
Watson claims after he learned that the loan contained a balloon, he attempted to refinance with the defendant for a loan without a balloon, but the defendant refused to provide him with a refinance, citing that he was unemployed as the reason.
During the course of collecting on the loan, the defendant has made multiple misrepresentations to Watson regarding the amounts due, according to the suit.
Watson claims the defendant misrepresented that he owed more than $25 for each late payment, when in fact, the contract limits the late fees to $15.
The defendant further assessed late fees to Watson's account for months in which he made payments within the contractual grace period and further collected these excessive late fees on multiple occasions, according to the suit.
Watson claims on several occasions, the defendant added more than $1,000 to his principal balance without informing him.
After Watson noticed that his total principal balance had been increased, he asked a teller of the defendant for an explanation, who simply gave him a list of the times in which the bank had added amounts to his account, according to the suit.
Watson claims the bank now seeks to foreclose on his home.
The defendant failed to provide notices and disclosures to Watson, which are required by law; misrepresented his income on the loan application; refused to later refinance into a non-balloon loan; failed to commercially follow acceptable business practices; and caused him damages as a result of the loan, according to the suit.
Watson is seeking actual damages and civil penalties of $4,600 for each violation of the West Virginia Consumer Credit Protection Act. He is being represented by Jennifer S. Wagner and Jed Nolan.
The case has been assigned to Circuit Judge F. Jane Hustead.
Cabell Circuit Court case number: 12-C-545