Three suits accuse company of predatory lending

By Cara Bailey | Jan 12, 2007

CHARLESTON - Three suits have been filed against Homecomings Financial Network, claiming the company partook in "predatory lending."

The suits, all filed by attorney Daniel F. Hedges, claim the company took advantage of three Kanawha County couples though the practice of "predatory lending."

According to the complaint, a mortgage broker, out-of-county appraisers and a national lender act together to "solicit unsophisticated borrowers with equity in their homes and persuade them into unwise high-interest mortgage loans with excessive fees and charges."

The broker, appraiser or lender, persuade people to enter a loan, which ultimately prevents people from selling their home.

Rexyall Wade and Deanna Wade of Cross Lanes filed a case against Homecomings Financial Network, Residential Funding Corporation and JP Morgan Chase Bank. The couple purchased a home for $55,000.

Community Mortgage Group began arranging a refinancing of plaintiff's loan with Decision One, a lender that originates and pools loans for target lenders.

An appraisal was requested and conducted in January 2004. The home was appraised for $82,500, the exact amount at which defendants were making a loan to plaintiffs. This appraisal amount was false, they claim. The actual market value of the home was $60,000.

The closing agents falsely represented that the place of settlement was 916 5th Avenue in Huntington.

"The loan closing was hurried, without sufficient explanation of the documents," the suit states.

The loan included the net amount paid on behalf of the debtor, plus additional charges permitted by the chapter. The defendants cannot include in the principal loan finance charges including mortgage broker processing fee, underwriting fee, and courier fee. The charges fall with the definition of "loan finance charge" which are "charges … imposed directly or indirectly by the lender as an incident to the extension of credit."

"The originators intentionally relied on an appraiser to misrepresent the market value of the Plaintiff's property for the purpose of inducing the Plaintiff into the contract," the suit states.

David A Millhouse and Lisa M. Millhouse filed a suit against Homecomings Financial Network, Inc.; Creve Coeur Mortgage Associated, Inc.; Samuel L. White, P.C. and Sarah A. Crichigno and Lucille A. Forsch, doing business as L.A. Forsch & Co.

The Millhouses bought a house in August 2001. In January 2003, they solicited a loan agent. The home was appraised in excess of $125,000, while market value was between $60-70,000.
The defendants pursued foreclosure upon the family home.

Thomas C. Rayburn and Deborah Lynn Rayburn of Charleston filed a suit against Homecomings Financial Network, Inc.; Decision One Mortgage Company, LLC; Matthew D. Morris and Affiliated Appraisal Services, LLC.

The Rayburns purchased a manufactured home in 1995 and had it placed on Deborah Lynn Rayburn's land. They solicited a loan around November 2001, and appraisal was conducted in January 2004.

"An appraiser known for inflated appraisals was selected to do an appraisal of the Plaintiff's home," the suit states.

The home was appraised for $69,000, while the market value was $41,400.

The suits filed ask for actual damages, a civil penalty of $4,000, the loan agreement declared void, court fees and punitive damages.

Kanawha Circuit Court case numbers 07-C-37, 07-C-38 and 07-C-39

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