West Virginia Record

Sunday, October 20, 2019

Lawsuit alleging predatory lending practices removed to federal court

Federal Court

By Kyla Asbury | Aug 16, 2019


CHARLESTON — A lawsuit against NewRez LLC alleging predatory lending has been removed to federal court.

In its notice of removal, filed in U.S. District Court for the Southern District of West Virginia, NewRez said several of the defendants are based in other states, including Delaware, New York and California.

NewRez also argued removal is proper because the amount in controversy exceeds the $75,000 threshold for state court.

Thomas L. Root Sr. filed the lawsuit against NewRez, which is doing business as ShellPoint Mortgage Servicing; Bank of America; Countrywide Home Loans; and the Bank of New York Mellon in Kanawha Circuit Court in May, alleging the defendants engaged in predatory lending practices to exploit unsophisticated consumers.

"In this case, Defendants induced Plaintiff Thomas Root into an unwise home loan based on an inflated appraisal," the complaint states. "Plaintiff now brings this suit to save his home and for other appropriate relief."

Root said that in 2005, he was solicited by Countrywide to finance the purchase of a foreclosed property appraised at $71,500. Root said he later discovered the property's value was well below that.

Root entered into the first loan agreement with a principal balance of $56,720 at an interest rate of 10.625 percent payable over 30 years, according to the suit.

Root said he entered into a second loan agreement that same day with Countrywide for a loan with the principal balance of $14,180 at 13.5 percent over 15 years with a balloon payment due at the end of the mortgage loan.

Root said that when he discovered the actual value of the home in May 2019, he suffered annoyance and inconvenience, emotional distress and fear of the loss of his home.

Root said his education and ability to understand financial transactions are limited, and he accused the defendants of misrepresenting the true value of the home, according to the suit.

Root said the mortgage loans were unconscionable conduct and should be unenforceable.

Root is seeking compensatory damages. He is represented by Daniel T. Lattanzi of Pepper & Nason in Charleston.

NewRez is represented by Matthew L. Ward of Dinsmore & Shohl.

U.S. District Court for the Southern District of West Virginia case number: 2:19-cv-00555

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U.S. District Court for the Southern District of West Virginia Charleston Division

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