Berkeley Springs man sues Chase, others for violations of the Truth in Lending Act, fraud

CHARLESTON -- A Berkeley Springs man is suing JPMorgan Chase Bank, Chase Home Finance, Birchenough Mortgage Services and Erie Insurance Property & Casualty Co. for violations of the Truth in Lending Act and fraud.

Dean Smith Sr. purchased his home and three adjoining lots in 1994 for approximately $45,000, according to a complaint filed March 18 in Kanawha Circuit Court.

Smith lived in the house with his wife until her death in 2006, and claims bills for hospital and funeral expenses began piling up shortly after.

In early 2007 Smith contacted his local bank to obtain a loan to assist with the bills and was referred to Birchenough Mortgage Services, according to the suit.

Smith claims a Birchenough agent said he qualified for a $100,000 loan and instructed him to take the full amount out. He claims offered the agent copies of his social security and pension information, which indicated he had an income of approximately $850 per month.

Smith claims the agent refused to look at the statements and stated she had all the information she needed, so he instructed the agent that he wished to secure the loan by the lot and home where he resided and not by the other three lots, to which the agent agreed.

On July 5, 2007, Smith attended the closing and claims the defendants offered no disclosure prior to the closing, according to the suit. Smith claims the initial payments were $796.44, which was nearly his total monthly income. He claims he was not provided with copies of closing papers at the closing, but was instructed to come pick them up in a few days.

In March 2009 Smith began to fall behind in payments and requested a loan modification from Chase Home Finance, but was denied. In August 2009 he was informed the defendant was going to foreclose his home and the three other lots he owned.

Smith claims he then discovered the defendants incorrectly stated his income was $2,800, instead of $850 and that the loan was secured by all four of the lots he owned, instead of the single lot he had requested.

Smith is seeking actual damages and civil penalties of $4,400 for each violation. He is being represented by Jennifer S. Wagner and Daniel F. Hedges.

The case has been assigned to Circuit Judge Charles King.

Kanawha Circuit Court case number: 10-C-528