Mortgage meltdown: Here come the judgments
Tuesday August 21, 6:11 am ET
By Les Christie, CNNMoney.com staff writer
Earlier this year, a Wisconsin couple won a judgment against Chevy Chase Bank that said the bank deceived them over the terms of their mortgage.
The judge ordered Chevy Chase to rescind the loan and certified the lawsuit as class-action, which could potentially release thousands of other borrowers who felt misled.
According to their attorney, Bryan and Susan Andrews believed they were getting a loan with a fixed 1.95 percent annual interest rate for the first five years. What they got was an option adjustable-rate mortgage (ARM); the 1.95 percent rate only applied for the first month and rose every month afterwards.
“The second month, the interest rate was about 5 percent,” said their attorney Kevin Demet. “After a year it was about 7 percent and now it’s in the 8s.”