Stewart et al v. Countywide Home Loans et al
U.S. District Court for West Virginia, transferred from the Circuit Court of Cabell County, West Virginia
Filed September 17, 2007
Download the full complaint (PDF)
Allegations: In the spring of 2006, Jesse and Salina Stewart contacted a mortgage broker as they looked to buy a new home. Mr. Stewart is a construction worker with a 10th grade education who is "unsophisticated in financial matters." The couple's income was roughly $2,300 a month. They told the broker they could afford payments of up to $1,000 a month, because they also had credit card bills and car notes.
The broker got back to them and reported he could get them a loan with Countrywide, but their payments would be $1,300 a month. They insisted $1,000 was all they could afford. The broker told them that if they signed the papers and paid $1,300 a month for three months, he would get them a lower rate with payments under $1,000.
The broker inflated the couple's income on their loan application and had them sign several blank forms without explaining what they were signing. Then, at the closing in October 2006, the Stewarts were rushed through signing and not given enough time to read the documents.
They ended up with two "extremely oppressive and unwise high interest loans":
- an "exploding adjustable rate" first mortgage that started at 10.13% and could only go higher.
- a "piggyback" second mortgage with a 12.1% interest rate and "an extremely exploitive balloon payment at the end."
The lawsuit claims Countrywide made the loans without determining whether the Stewarts could afford them.
