June 30 2008
Susan and Bryan Andrews of Wisconsin have filed a lawsuit seeking class action status that accuses their bank, the Chevy Chase Bank of hiding the true terms of their mortgage loan. The couple says their loan's interest rate more than doubled by the second month--a rate they thought they had locked in for five years.
In 2007, District Judge Lynn Adelman ruled that the bank had violated the Truth in Lending Act (TILA), and stated that other borrowers could join the lawsuit.
This opened the door to borrowers being able to force the bank to cancel their loans, and lawyers say massive class action suits could result.
TILA is designed to protect consumers against lending fraud, by requiring clear disclosure of loan terms and costs. Violation of TILA lets consumers terminate a loan and initiate return of all interest and fees.
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