Citimortgage is doing business as ABN-AMRO Mortgage Group Inc.
Federal Home Loan Mortgage Corporation and Nationstar Mortgage were also named as defendants in the suit.
In 1989, Ralph Padgett and his wife purchased property where their home was situated for approximately $12,000 on Logan County, according to a complaint filed Nov. 29 in Logan Circuit Court and removed to federal court on March 1.
In 1999, the plaintiffs purchased a manufactured home for $40,000 and had it put on the property, according to the suit.
Padgett claims in 2000, he was solicited to refinance the loan and in 2002, he was solicited again.
ABN AMRO and Community Home Mortgage arranged for an appraisal of the home with an appraiser the lender and broker knew would falsely inflate the value of the plaintiff’s property, according to the suit.
Padgett claims the appraisal was intentionally inflated and stated to be at least $66,500 when it was actually somewhere between $30,000 and $40,000.
The plaintiff closed the loan in June 2002 and did not learn of the inflated value of his home until November, according to the suit.
Padgett claims in August, his loan was transferred from Citimortgage to Nationstar.
The defendants have engaged in a pattern of predatory lending practices to induce homeowners into inflated loans that exceed the value of their property without their knowledge, according to the suit.
Padgett claims the loan contains several substantively unfair terms, including that the loan far exceeds the market value of the home, the defendants have a pattern of intentionally inflating the market value of homes to support predatory loans that exceed the market value of the borrowers’ homes, the loan issued by the defendants left the plaintiff far worse off than he was with his existing financing and put him in jeopardy of losing his home.
The loan issued to the plaintiff was unconscionable and was made and/or was induced by unconscionable conduct and was unenforceable, according to the suit.
Padgett is seeking compensatory damages. He is being represented by Bren J. Pomponio of Mountain State Justice.
Citimortgage is represented by Bryan N. Price and John T. McCartney of Flaherty Sensabaugh Bonasso PLLC.
U.S. District Court for the Southern District of West Virginia case number: 2:17-cv-01421