Bank's Loan Closing Without Attorney Supervision Bars Any Relief Against Borrower
On May 6, 2010, the South Carolina Court of Appeals issued a ruling affirming a harsh result against Wachovia for its failure to have loan closing documents reviewed, and the closing supervised by, an independent attorney. In Wachovia v. Coffey , borrower Dr. Coffey took out a $125,000 home equity line of credit with Wachovia. Wachovia closed the loan directly without the involvement of counsel. Dr. Coffey’s wife was unaware of the closing. Dr. Coffey signed a mortgage document purporting to secure the line of credit with their home, despite the fact that Mrs. Coffey was the sole owner on the title. Wachovia wired the loan proceeds for the purchase of a thirty-six-foot boat. Dr. Coffey paid monthly payments for the boat for the rest of his life, and Mrs. Coffey continued those payments temporarily after his death. Mrs. Coffey believed the loan was secured by the boat, not the home. After Dr. Coffey passed away, Mrs. Coffey sold the boat, with the help of a boat broker. Dur