SOMERSET, KY (WAVE) – For a Kentucky couple, the purchase of a lifetime left them with a broken home and broken dreams. They claim their bank pressured them to go through with a loan for a house that wasn't finished. When things went south with the builder, the couple says the bank hung them out to dry. So they turned to the WAVE 3 Troubleshooter and now the federal government has launched its own investigation.
Kelli and Jason Spencer's world has been turned upside down.
"This home is like buying a brand new car with an engine that's got 300,000 miles on it," Jason said.
I spoke to the Spencer's while standing inside a dining room turned into a bedroom for their daughter. The couple did that, they said, because other sections of the house were in such bad shape.
"We took a loan out for $150,000 for this home," Kelli said choking back tears, "and my daughter should have never had to have a dining room for a bedroom."
The couple said it's heartbreaking reminder of all that went wrong with the Somerset, Kentucky home they bought three years ago.
"It needs a new roof, there's holes in the floors, the home is falling apart," Kelli said.
On the day of closing in 2008 the Spencer's said their new home was a mess and they documented the problems in a home video. According to complaints filed in Pulaski County Court and the Kentucky Department of Housing, the Spencer's claim the builder, Gregg Gleason, installed a used HVAC system and duct work, used windows, and mismatched roof shingles.
The Spencer's also said they also discovered what looked to be used cabinets, foot prints in the floor finish, unmatched wood on the stairs, cracks in the kitchen tile and holes in the walls. So they say they asked their loan officer, Nancy Bell of First Southern National Bank in Monticello, Kentucky, to put the deal on hold.
"And said hey we need to change the date on this, the house is no where even close to being complete." Jason said he told Bell. "And she's like no, no, no we'll go ahead and do it since I've already done all the paperwork we've already got everyone going to be there. You know we're going to go ahead and do the closing today."
The couple said Bell told them she would make sure the builder resolved the issues. Still uneasy, the Spencer's said they voiced concerns again when they arrived at the closing. This time the Spencer's said they asked Bell to put part of the loan in escrow as insurance to force Gleason to fix things.
"If they would have listened to my pleas on that day of closing," Jason said, "I guarantee we wouldn't be standing here."
But the Spencer's claim Bell said "no."
"And her statement was that's unnecessary," Kelli said.
Stewart Pope, an attorney with Legal Aid of Louisville not associated with the Spencer's case, said putting money in escrow is not only necessary in a situation like this. He said it is common practice.
"I would think it's strange not to escrow money for completion of the loan," Pope said.
The Spencer's said they went through with the sale based on Bell's reassurances. They said she told them to make a punch list of everything that needed to be finished or fixed. But the Spencer's said Gleason did virtually none of that work.
The Spencer's sued Gleason, but just before the case went to court the builder filed for bankruptcy which protects him from a court judgment. Having spent more than $30,000 in mortgage payments and needing to come up with another $50,000 to fix everything that was wrong, the Spencer's realized they were out of options and Spencer's gave up.
"So after we spent all of this money and took out a loan and tried to make a home out of this, we eventually just crumbled under the stress and financial burden of this home," Kelli said.
It forced the family to file for bankruptcy and caused, what Kelli described as, "financial devastation for our family."
The Spencer's walked away from the home and First Southern National Bank foreclosed, then sued Kelli's mom, who co-signed on the loan, for $30,000, which is the guaranteed portion of the loan. Distraught, the Spencer's called the WAVE 3 Troubleshooter Department and we took their case to the Office of the Comptroller of the Currency, which is the federal agency in charge of supervising banks.
The OCC agreed to open its own investigation, and Pope believes the Spencer's might have a case, especially in regards to their claim that Bell refused to put money into escrow.
"The bank really didn't totally have clean hands since they refused to do that," Pope said.
There are also questions about whether the loan itself is valid. The Spencer's appraisal was based on a completed home, a condition that appears not to have been met.
"And we're just left with nothing," Kelli said.
Nothing except the uphill battle of starting over.
"We will recover as a family," the mother of three said. "But financially, I don't know."
Bell declined comment, referring us to the bank's attorney, Stephanie McGehee-Shacklette, who did not return multiple calls for comment. We weren't able to track down Gleason, the builder. We went to the address listed on his bankruptcy filing but the home had been sold and Gleason was gone.
No comments:
Post a Comment