Legal Question in Credit and Debt Law in Pennsylvania

Hello: My name is Mitch and in 2006 my wife and I obtained a $120,000 mortgage for a new home on an Income just above $25,000 per year. Three months later we got a second mortage from the same local bank for $25,000. We were able to barly make the payment. When the econemy tanked in 2008 we had to sell personal items and miss paying other bills in full to make the payment. By 2009 we were no longer able the make the payments and the bank went into forclosure in mid 2010 and forclosed in April 2011. We filed for chapter 13 bankrupty because of all of the credit cards we borrowed against and past due bills. We moved in with a new friend in a neighboring state. My question is can we sue the savings bank that loaned us the money? Clearly looking back our income was not sufficient to support that mortgage. Does that bank have any responsibilty for our finincial downslide? We are broke, living in someone elses house and our credit is obviously ruined. Thanks Mitch.


Asked on 10/07/11, 3:53 am

1 Answer from Attorneys
Rachel Hunter

Mitch,

Can you sue? It depends. What you told me is not enough information. You agreed to the loan so if there was bad faith on the part of the mortgage company in making the loan, then there was also bad faith at your end if you knew that you could not afford it and took the money anyway.

However, if there was some fraud or deception by the bank, then possibly you can sue them. I would first have your case evaluated by a litigation attorney who specializes in violations of RESPA (real estate settlement procedures) or the Truth-in-Lending Act or similar banking laws to see if a violation occurred.

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Answered on 10/07/11, 6:11 pm


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