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Bank Still Faces Suit Over Unaffordable Loan

(CN) - A Spanish-speaking couple who signed a refinancing contract written in English after a six-hour, high-pressure pitch from a Countrywide mortgage broker will get a second shot to prove that they were duped, the 9th Circuit ruled.

Southern California residents Victor and Belen Balderas said they immediately had second thoughts after buckling under the broker's relentless tactics.

Countrywide's agent camped out at the Balderas house for six hours one evening in 2006, badgering them to sign an agreement written in English, which neither of them can read, according to the complaint.

They also alleged that the document overestimated their annual income by about $40,000, and that they were not given proper notice of their right to cancel the deal. When the Balderases tried to back out a few days later, Countrywide allegedly lied and said it was too late.

U.S. District Judge Michael Anello in San Diego dismissed the couple's complaint, which alleged several violations of the Truth in Lending Act (TILA), but the 9th Circuit reversed on Thursday from Pasadena.

The Balderases had shown enough evidence of wrongdoing to survive outright dismissal, the three-judge panel found.

"As we've said before, 'so long as the plaintiff alleges facts to support a theory that is not facially implausible, the court's skepticism is best reserved for later stages of the proceedings when the plaintiff case can be rejected on evidentiary grounds,'" Chief Judge Alex Kozinski wrote for the court. "Here, the Balderases clearly alleged in their complaint that they were never given a notice of right to cancel that complied with TILA. If they can prove up this allegation at trial, they'll win."

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