Greenbrier circuit judge files predatory lending lawsuit over house in Hilton Head

CHARLESTON - A Greenbrier County circuit judge and his wife are suing Aurora Commercial Corp. for allegedly engaging in predatory lending practices.

Aurora Commercial Corp. is formerly known as Aurora Loan Services Inc. Nationstar Mortgage LLC was also named as a defendant in the suit.

On Aug. 12, 2005, Greenbrier Circuit Judge James J. Rowe and his wife, Sharon H. Rowe, purchased real property in Hilton Head Island, S.C., according to a complaint filed Aug. 1 in the U.S. District Court for the Southern District of West Virginia at Charleston.

The Rowes claim to finance the purchase, they entered into an adjustable rate note with TM Capital Inc. in which TM would lend the sum of $626,250 toward the purchase of the home.

On July 15, 2012, Aurora transferred the Rowes' mortgage loan and right to collect payments to Nationstar, according to the suit.

The Rowes claim on March 25, Nationstar sent correspondence to the Rowes' informing them of a rate change in accordance with the terms of their adjustable rate note from 4.625 percent to 6.625 percent.

On May 15, the Rowes sent a letter to Nationstar expressing concerns regarding its calculations of interest since 2010 and requested an audit and recalculation of the correct interest rate, according to the suit.

The Rowes claim on June 17, Nationstar sent correspondence to the plaintiffs, which served as a formal notice of default.

On June 24, after sending the Rowes a formal notice of default, Nationstar sent correspondence to the Rowes explaining their methodology for calculating interest rates on the Rowes' adjustable rate note and denying the request for audit, recalculation and/or revision of the adjustable rate note, according to the suit.

The Rowes claim the Truth in Lending Act requires lenders who regularly extend consumer credit for which a finance charge is imposed to disclose certain key loan terms.

As a result of the defendants' failure to provide accurate disclosures of material terms and conditions of the adjustable rate note, the Rowes have a continuing right to rescind the mortgage loan because the defendants failed to clearly, accurately and conspicuously disclose the amount financed; failed to clearly, accurately and conspicuously disclose the finance charge; failed to clearly, accurately and conspicuously disclose the annual percentage rate; failed to clearly, accurately and conspicuously disclose the method of determining the finance charge and/or index, according to the suit.

The Rowes claim under TILA, a consumer is entitled to rescind a mortgage loan and on May 15, the Rowes directly rescinded their mortgage loan.

The defendants breached the terms of the Deed of Trust and Adjustable Rate Note by enforcing the terms that were not bargained for and/or agreed upon by the plaintiffs and which are otherwise unlawful, according to the suit.

L. Lee Javins II, one of the Rowes' attorneys, said he and the Rowes tried repeatedly to bring the issue at hand to Nationstar's attention, but received no response.

"We tried repeatedly to reach out to them for weeks, but couldn't get a response," Javins said. "Nationstar has tried to enforce terms and conditions that the Rowes did not agreed to and this was the only thing left to do to preserve their rights."

Javins said he attempted to contact Nationstar for weeks, copying the company in e-mails and letters and attempting to reach out to it with phone calls, but no response was ever received.

The Rowes are seeking for the court for a permanent injunction enjoining and restraining defendants from seeking any remedies allowed on the Deed of Trust against the real estate insofar as it relates to unlawful terms and conditions contained in the Adjustable Rate Note on the real estate. They are being represented by Javins, Guy R. Bucci and Mark A. Barney of Bucci Bailey & Javins LC.

Rowe ran for state Supreme Court in 2004 and last year. He has been a circuit judge since Gov. Gaston Caperton appointed him in 1997. He was elected to serve an unexpired term in 1998 and re-elected in 2000 and 2008. Before that, Rowe served four terms in the House of Delegates, acting as Judiciary Committee chairman and House Majority Leader.

U.S. District Court for the Southern District of West Virginia at Charleston case number: 5:13-cv-21369