A Mountain Home Loan Center lawsuit has been filed against the mountain home loans in Colorado. In this case, a group of mountain home owners went on a vacation, but soon returned to find that their homes were in disrepair. The homeowners were able to get their mountain home loans refinanced, but at very high interest rates. They filed a lawsuit against the company and received a $500,000 judgment. This could be the first judgment of its kind in Colorado.
Mountain Home Loan Center Lawsuit
The reason that this lawsuit has been filed against the Mountain Home Loans is due to negligent lending practices. The company did not make clear guidelines on the standard of living that would be considered for the borrower to use for the purpose of financing the mountain home loans.
The lender made the mistake of not requiring the borrower to clearly state in the application for the loan what their income level was. Without the income level specified in the loan agreement, the bank cannot give any consideration to the borrower’s ability to pay off the mountain home loan.
The company did not warn the borrowers that they would be required to pay a significant portion of the loan if they defaulted on the loan.
It did allow the banks to charge outrageous interest rates without regard to the real value of the property. The Mountain Home Loans placed advertising in local publications and on websites that offered loans at attractive terms. The advertisements were not truthful in telling the potential customers that the loan was a great deal for them only if they had good credit.
As the result of the lawsuit, several investigations have been conducted to determine who is responsible for the fraud.
The lawyers are currently investigating whether or not the company complied with the Fair Debt Collection Practices Act. The Fair Debt Collection Practices Act is the federal law that makes it possible for consumers to pursue the collection of bad debts. If a consumer has been defrauded of money under the FDCPA, he may sue the lender for compensatory and punitive damages. The mountain home company may be ordered to pay back all debts including legal fees. However, in order for this to occur, the company must show that the plaintiff knew the contents of the agreement prior to signing it.
There are two additional lawsuits in progress against the company.
One suit is being pursued by a group of retirees who purchased a parcel of property from the mountain resort for an amount less than what the loan documents stated. Instead of being held liable for the entire balance, they are seeking compensation for the actual purchase price. In addition to compensating for the purchase price, the group is also seeking compensatory and punitive damages.
The mountain center lawsuit may affect many other businesses. For example, many ski stores, inns, hotels and condos use mountain home loans to finance their operations. Although there is no guarantee that the lawsuit will prevent the lending institutions from doing business, the effects could be felt for years to come. Other businesses such as real estate agents, travel agencies and others that cater to the mountain tourism industry could also find themselves financially isolated and unable to function. Lawsuits such as this one could have a significant impact on the way in which mountain property is utilized in the future. Therefore, it may be time to speak with an attorney today regarding the lawsuit and its potential effects.
