Nature of the Case
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Facts
P refinanced the subject property in August 2003, for $40,518; in January 2004, for $63,961; and in May 2005, for $67,348. She also took out four separate loans for $1,500, $3,060, $5,000 and $7,650, respectively, with interest rates ranging from 24.99% to 31.00%. In an effort to consolidate her debt and lower her monthly payments, P completed an online loan application after receiving a 'pop-up' advertisement on her computer. D contacted P. D requested that Title Source, Inc. ('TSI') arrange for an appraisal of the subject property. TSI, an appraisal management company, is a 'sister company' to D as they are owned by the same parent company, Rock Holdings. TSI's appraisal request order included an estimated value for the subject property of $262,500. TSI valued the property at $181,700. In fact, the true fair market value of the subject property was actually $46,000. There were obvious and blatant errors in the appraisal. D presented P with a loan for $112,850, with monthly payments that were higher than what she had expected based upon the initial 'pop up' advertisement. P said she was not interested. D kept calling back. P agreed to the loan on June 6, 2006. The loan originally presented to P was in the amount of $112,850. The loan was an interest-only loan for the first three years and also provided for P to purchase 2.5 'loan discount points' resulting in a variable interest rate of 8.5% and an initial payment of $799 per month. This loan had no balloon payment feature. The loan at issue herein was for the much larger amount of $144,800, and the terms of this loan, the annual interest rate was 9.25% for the first three years and then adjusted every six months thereafter, to a maximum rate of 16.25% and a minimum of 7.75%. P's monthly payment for the first three years was $1,144, excluding taxes and insurance. This loan product was unique because it was a thirty-year loan that was amortized over forty years, resulting in a $107,015.71 balloon payment at the end of the loan period. D did not provide P with a written 'Good Faith Estimate' for this loan. P got the closing documents at her home, and a Notary appeared to do the closing. The Notary was simply there to take signatures on the documents and could not explain anything about any of them to P. P saw documents and didn’t bother to read or understand any of them. Further, on the points issue, it appears that $2100 of the points money was unaccounted for in the closing. h the loan proceeds, P paid off her previous mortgage and consolidated debt; received $40,768.78, with which she purchased a new vehicle (for $28,536.90); retired other existing debt; and made the first two payments on the loan. P began to call to request a refinance in October 2006. P underwent surgery and was out of work. P defaulted. P provided statutory notice of a claim, and D offered no cure and began foreclosure. P sued claiming she was victim of predatory lending. The court found against D. It held the note unenforceable, and a trial on punitive damages yielding a judgment for P in excess of $2.1 million. D appealed.
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