WEST VIRGINIA RECORD

CHARLESTON -- A St. Albans couple is suing Wells Fargo after they claim it engaged in predatory lending practices.

Lesa A. Murphy and Kevin W. Murphy was paying on a mortgage they had obtained with the West Virginia Housing Development Fund for $159,080 with a fixed interest rate of 5.24 percent and were not looking to refinance, according to a complaint filed May 14 in Kanawha Circuit Court.

In January 2008, the Murphys claim they were solicited by the defendant, who encouraged them to consolidate more than $24,000 of previously unsecured debt into a home-secured refinancing and promised them that they would have one low monthly payment and a fixed-rate mortgage.

The Murphys claim the new loan contained an interest rate of 9.5 percent, which was higher than the misrepresented "low, fixed rate," and nearly two times their previous mortgage rate; an adjustable rate that could go as high as 15.5 percent; a payment higher than expected that put the couple up against their ability to pay; a loan amount that far exceeded the actual market value of the home; and a 40-year term instead of the 30-year term that was promised, which will yield approximately $200,000 more in total interest costs.

The couple struggled to make the regular mortgage payment on their low incomes and had to use credit cards in order to make the mortgage payments, according to the suit.

In late 2009, the Murphys claim they began to fall behind on payments because their job hours were decreased.

The Murphys claim the defendant misrepresented the terms of the loan, represented that it would consolidate all of their bills into one low monthly payment, secured an inflated valuation and failed to provide explanation regarding loan terms.

The Murphys are seeking actual damages and civil penalties. They are being represented by Sara Bird.

The case has been assigned to Circuit Judge Louis Bloom.

Kanawha Circuit Court case number: 10-C-882