A class action has been filed by West Virginia homeowners against banking giant Chase Manhattan alleging that the bank has systematically preyed on unsophisticated consumers by enticing them into refinancing their homes with loans that are loaded with fees, have higher interest rates than represented and are not serviced appropriately, costing consumers thousands of dollars and possibly their homes. Brought on behalf of all West Virginia mortgage borrowers whose loans have been serviced by Chase at any time since October 9, 1999, the action seeks compensatory, statutory and punitive damages as well as injunctive and declaratory relief.

This case arises from an alleged practice wherein Chase offers home equity loans to unsophisticated consumers. The loans are purported to be an easy, cost-effective way for homeowners to regain some equity invested in their home and lower their interest rates in the process. However, the action alleges that in reality the loans are designed to clean out the homeowners and ultimately result in the loss of their homes after being bilked of thousands and thousands of dollars.

According to the class, pressure is applied to enter into the mortgage. The closing is often conducted at locations such as fast food restaurants and without the aid of an attorney. Allegedly, if the consumer balks at signing the loan, additional pressure is applied to enter into the loan. The loan itself, which is held out as a means to remove some equity from one's home and lower interest rates, is allegedly structured to strip homeowners of their money through the use of illegal and excessive fees, foreclosure threats, higher than stated interest rates, fees designated as principal and most importantly, improper servicing.

The action describes in detail how Chase allegedly mishandled the named plaintiffs' loan: The action asserts that Chase serviced mortgage loans in such a manner as to intentionally keep the borrowers uninformed. Allegedly, Chase did not send a monthly statement and would not provide a statement or any documentation on the status of the named plaintiffs' loan. Chase, it is alleged, would call or send letters demanding payments without providing any basis for such payments. Apparently, proper monthly payments were not credited to the named plaintiffs' account. If the payments demanded by Chase were not made to Chase's satisfaction, a threat to foreclose was the bank's next step. No other remedies were offered. Funds were only payable by Western Union money order or by checks over the phone, which made accounting by the named plaintiffs that much more difficult. Chase, it is claimed, paid property taxes which the named plaintiffs had already paid and then demanded higher fees as a result. The action further alleges that the interest rates are actually much higher than what was agreed upon.

This action is based on several alleged violations of federal and West Virginia law including predatory lending, illegal debt collecting, unauthorized charges, breach of fiduciary duty, illegal pursuit of forfeiture and breach of duty of good faith and fair dealing.