Kimberly Thomas says she couldn't believe it when it came time to sign for the $505,000 house she had agreed to buy in Burtonsville.
The interest rate on the Wells Fargo mortgage was 10.65 percent, not the 7.13 percent she says she agreed to. It was a risky adjustable rate, not the fixed rate that had been on a previous document she had seen. And instead of the interest-only loan she expected, the mortgage required immediate principal payments.
The surprises boosted her monthly payment from an expected $3,000 to $4,667, leaving little left from her salary for gas, food and the rest.
"The mortgage amount was so ridiculous that I thought it was a mistake," she said. "I was depending on Wells Fargo to do the right thing. I make about $5,000 a month" after taxes. "My mortgage amount can't be what I make," she remembers thinking. "That would be wrong."
A Montgomery County jury thought it was wrong, too.
Last week it awarded Thomas damages of $1.25 million, agreeing with her contentions that Wells Fargo changed mortgage documents at the last minute, altered her declared income and stuck her with an obligation that she didn't qualify for and that the bank should have known she couldn't meet.
Blogs and traditional media have been full of talk about "predatory borrowers" who lie about their income, gleefully default on mortgages, live rent-free while lenders try to foreclose and presumably get belly laughs from being portrayed as victims.
The case of Thomas v. Wells Fargo is an antidote to all that. In this instance - assuredly it stands for others - convincing evidence and a jury of six said that the bank, not Kimberly Thomas, is to blame for making her life hell, jeopardizing her top security clearance, wrecking her credit record and costing her tens of thousands in lawyer fees.
It erodes the oft-repeated defense that banks would never knowingly make a bad loan.
Wells Fargo says it did nothing wrong.
"We believe the jury's decision in this case was a reaction to the negative attention the mortgage industry has received," spokeswoman Teri Schrettenbrunner said. "This decision runs counter to how we do business."
The credit record of Kimberly Thomas, 41, was fine before she met Wells Fargo. She worked as a federal contractor on sensitive security matters and made $88,000 a year.
In June 2006 she decided to separate from her husband, Gary Thomas, now 51, and move out of their Silver Spring house. The three-bedroom, two-story home she agreed to buy in Burtonsville was a stretch, but she thought the 7.13 percent rate and $3,000-a-month payment Wells Fargo showed her was doable even though it represented a huge portion of her income.
Soon, however, she began to have second thoughts. In mid-July Gary had a minor stroke. Kimberly renewed her commitment to him and decided not to move out. The couple is still together.
But her Wells Fargo loan agent, she said in an interview, said she couldn't cancel the deal without lots of litigation.
In court testimony, Wells Fargo denied telling Thomas she was locked in.
At least she could handle the payments, she figured. She could resell the house. But when she came to the closing table at the end of July 2006, all her assumptions got trashed.
Staring at her were mortgage documents with drastically different terms from the ones she said she expected. Neither her real estate agent nor the Wells Fargo loan agent made it to the closing, both sides agreed in court. It was 6 p.m. She couldn't get them on the phone. She didn't have a lawyer.
Don't worry, said the title company guy overseeing the settlement. If Thomas hadn't signed a "truth in lending" disclosure with these new terms, she remembers him saying, then she wasn't bound by the contract. Wells Fargo could amend it later.
That made sense. She hadn't agreed to this. And why would Wells Fargo issue a mortgage she couldn't afford? Banks were in business to get paid back.
"She honestly believed there was a mistake in the terms that could be fixed after the fact," said Brian M. Maul, her Frederick-based lawyer.
She signed dozens of documents that day, including many she didn't read carefully. One, if she had only known it, was a truth-in-lending consent with the higher mortgage terms, according to documentary evidence.
In court, Wells Fargo said that Thomas had repeatedly been told about changes in her loan terms in previous weeks - in a fax, in the mail and on the phone. She denies that. Even so, her signature on the closing documents showed she approved, Wells Fargo argued.
Both sides agree that she immediately and repeatedly contacted the bank to correct the problem, belying any notion that she intended to default all along or was on a joy ride.
But what she and many others didn't understand was that Wells Fargo and other companies weren't especially worried about whether the loans would be repaid.