Home owner sues Wells Fargo claiming FHA loan was too costly
A woman has filed suit against the bank that issued her a loan, which required her to come up with a substantial down payment and which forced her to pay mortgage insurance of nearly $200 per month.
Christy L. Buchanan alleges she bought a home at 2432 Timber Ridge Rd. in Edwardsville for $350,000 on Nov. 6, 2010. Buchanan, who already had one mortgage, financed her home through Wells Fargo Bank.
Because of Buchanan’s financial situation, Wells Fargo offered her only an FHA loan, according to the complaint filed Dec. 31 in Madison County Circuit Court. However, the maximum amount Buchanan was allowed to borrow under FHA regulations was $282,000, the suit states.
“In reliance upon the false information of loan availability to the plaintiff, she was required to raise over $70,000 in cash for the down payment. With the full knowledge of the defendant through its local staff, the plaintiff cashed in her 401(k) plan at her employer which then had a balance in excess of $79,957,” the complaint says. “The plaintiff had a penalty of 10% in cashing these funds.”
Libor scandal: RBS executives under pressure to resign
The pressure comes as RBS is closing in on a settlement with US and UK regulators that is likely to see the state-backed bank fined at least £300m.
John Hourican, head of RBS’s investment bank, and Peter Nielson, head of markets, are understood to be “under pressure” to step down.
Sources suggested Mr Hourican and Mr Nielson were “stunned” and “let down” by the developments, described by one insider as “political convenience for the relentless baying of blood from regulators”.
The two bankers have together earned in excess of £30m in the past four years and were yesterday working as usual in RBS’s London offices. Neither had been asked to offer their resignation.
Episode: The Untouchables Preview
Are the CEOs of mega-banks too big to jail? Though fraudulent practices at banks contributed to America’sfinancial meltdown, to date no Wall Street titan has been convicted of a crime connected to the crisis. FRONTLINE investigates why Wall Street’s leaders have escaped prosecution.
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Is subprime lending back?
Mortgages resembling the kind of subprime loans that were blamed for the foreclosure crisis are creeping back into the market, leaving some experts and regulators alarmed. The loans give a relatively new twist to seller financing, putting homeownership within reach of borrowers who can’t qualify for a conventional mortgage.