Quote:
Originally Posted by Rick Lee
Again, I'm missing the part about what a bank did wrong wrt the TIL. If the start rate was 1.95%, that means it was some kind of Option ARM or MTA and there would definitely be a lot of paperwork explaining the terms for adjustment. Plenty of people misunderstand the differences between start rates, note rates, fully amortized rates, etc. It doesn't mean the bank lied or changed the terms just because a loan officer told you something and your payment coupon says something else. Somewhere in between, the borrower more than likely skipped over a lot of stuff in the paperwork. Those disclosures are so commonplace now that most of them have bar codes on them. I doubt a bank left themselves open to interpretation by a borrower or judge.
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From the article:
"n their 2005 lawsuit, the couple said the loan's interest rate had more than doubled by their second monthly payment from the 1.95 percent rate they thought was locked in for five years. The interest rate rose well above the 5.75 percent fixed-rate loan they had refinanced to pay their children's college tuition. The Andrews filed the case seeking class action status; and in early 2007, U.S. District Judge Lynn Adelman ruled that the bank had violated the Truth in Lending Act, or TILA, and that thousands of other Chevy Chase borrowers could join them as plaintiffs."
Apparently it was supposed to have a fixed rate for a period of 5 years (Common I believe - my dad had one but got out of it as planned) but the rate still went up before the end of that 5 years. Since the judge has ruled on it - I think we can consider that it happened (proven guilty).
Also, I'm not saying they weren't dumb I'm just saying it is possible to be both dumb and right.