Judge's ruling favors bank

Suit over Provident loan fees dismissed

September 23, 2006|By Laura Smitherman | Laura Smitherman,Sun reporter

In one of the first defeats for the Peter G. Angelos law firm, which has launched a legal battle against what it contends are predatory lending practices, Provident Bankshares Corp. won dismissal of a lawsuit alleging it illegally charged a fee for pre-paying a mortgage.

Baltimore City Circuit Judge Martin P. Welch granted a summary judgment this week in favor of Provident, essentially throwing out the remaining claims against it, said Brian L. Moffet, a lawyer for the Baltimore bank.

The judge noted in his ruling that Provident had disclosed the fee to the borrower, who signed a waiver of closing costs provided that the loan is maintained for three years. Provident assessed the closing costs of about $680 when the borrower refinanced after two years.

M. Albert Figinski, an attorney with the Angelos firm, said it would "most certainly" appeal. The plaintiff's lawyers contend that the fee was a prepayment penalty that is illegal in Maryland, and that several hundred borrowers could have been affected.

The summary judgment was made before the judge considered whether to classify the lawsuit as a class action. "Judge Welch's decision on the undisputed facts confirms that Provident's lending practice conformed to Maryland law," Moffet said.

"If plaintiff elects to appeal, we are confident Provident will prevail," Moffet said.

The Angelos firm, best known for its huge class action lawsuits against tobacco and asbestos companies, has filed several class action suits against banks and mortgage companies alleging they charged excessive or illegal fees. While cases are still pending, some have been partially or fully dismissed.

John A. Pica Jr., lead attorney on the cases, could not be reached to comment yesterday.

Earlier this year, the firm voluntarily dismissed its suit against Greentree Mortgage Corp. in Owings Mills.

U.S. District Judge J. Frederick Motz in August dismissed another case filed in Baltimore against Irwin Union Bank and Trust Co., based in Columbus, Ind., and ordered the parties to arbitration. A lawyer for Irwin Bank, J. Preston Turner, said that his client was in compliance with federal law and that Motz rejected the plaintiffs' claim that Maryland law applied.

"We are pleased with this ruling and expect a favorable outcome to this claim," Turner said.

In a case against Baltimore's Admiral Mortgage Inc., Welch ruled this month that the company didn't violate Maryland's Consumer Protection Act. But he also rejected a motion to dismiss a claim that it exceeded a legal limit on lender fees, such as origination and documentation costs.

Martin B. Ellis, a lawyer for Admiral, said the company had discovered the overcharges after the lawsuit was filed and refunded any excess fees accrued to borrowers.

Ellis said the judge found those refunds to be "untimely" and that the parties will probably try to work out a settlement.


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