Bryan Andrews, 49, a carpenter, and his Susan, 51, a nurse, previously had a 5.75 percent fixed-rate mortgage.

In 2004, in an attempt to save some money, they took out an option-ARM. You know, the type of loan where you can either pay the regular amount, over the regular amount or … less than the regular amount.

If you pay less than the regular amount, you end up not even covering the interest you owe, so the interest is added to the principal. Meaning, your principal balance goes up, quickly.

The couple says they didn’t want to refinance, because it would have cost them $5,700 extra. So, they sued, saying they had been misled by the loan documents.

In their defense, the couple’s lawyers point to a notation on the loan documents: “WS Cashflow 5-year fixed,” and the line under it said “Note Interest Rate: 1.950%.” This led the couple to think they had a fixed-rate mortgage loan, at the 1.95% rate.

In the bank’s defense, their lawyers point to five or six hundred other parts of the loan documents where it says things like “ADJUSTABLE RATE NOTE”, “Calculation of interest rate changes”, and “ANNUAL PERCENTAGE RATE … 4.047 percent”, that said below that the loan had variable-rate features.

It’s hard to draw conclusions from a simple article, but in this case, I’d say the couple is trying to finagle their way out of the loan, any way they can.

A Fight Over the Fine Print – By Kirstin Downey, The Washington Post

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Updated: 1st Quarter 2018