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Foreclosure of the Month

FORT WORTH (CN) - The owner of a senior citizens athletic club claims Compass Bank overcharged him for interest on a loan, and knew it, then "bullied" him into signing altered loan documents in the bank's favor while he was suffering from cancer chemotherapy.

Robert Sullins and his business Phytness Systems say the bank plans to foreclose on the Maverick Athletic Club, and had the brass to tell Sullins that he's too old to run a business.

In 2008, Sullins says, Compass agreed to lower the interest rate on his loan to 5 percent. But according to the bank's own research department, it overcharged him $4,326.69 in the following year. Sullins says the bank then continued allocating his payments incorrectly.

"In 2009, at the time the Bank admitted it was overcharging plaintiffs, Sullins was battling non-Hodgkins lymphoma, and was undergoing chemotherapy," according to the complaint in Tarrant County Court.

"The Bank began to demand that Mr. Sullins execute a new document, the 'Change in Terms Agreement.' Mr. Sullins, suffering from the side effects of chemotherapy, repeatedly asked that the bankers, Courtney Garner and Brian Happel, explain why he had to sign such document, and was told that it simply corrected the amount owed, to reflect the correct interest rate and principal balance. Mr. Sullins asked if that was the only change, and if so, why he had to sign anything, but the bankers, Ms. Garner and Mr. Happel, insisted it must be done."

In reality, Sullins says, the new loan documents extended the maturity date by a month. Sullins says he signed the documents only after being "bullied" by the bankers.

"Mr. Happel was well aware of Mr. Sullins' condition, as his own father was in treatment with Mr. Sullins at the same cancer center," according to the complaint.

At the end of 2010, Sullins says, he contacted the bank to seek a loan extension, but did not hear back and began paying only interest on the loan.

Sullins says that he finally met this year with a bank representative, Mike Lewis, who claimed that Sullins already had had four loan modifications.

Sullins told him that that was incorrect, to which he says Lewis replied: "At your age, why do you want to keep doing this?"

Lewis told Sullins that he would have to get an appraisal and pay for it, which Sullins waited for "in order to begin seriously marketing the property," he says.

Sullins says Compass then told him that he was in default, demanded proof of tax payments, threatened to accelerate the loan, and said it would pay for an appraisal but would not provide it to him.

"At this point Mr. Lewis stated, 'You have two months to sell this property,'" Sullins says.

The complaint adds: "This is a property appraised at $1.1 million in 2002 and on which the current principal balance in under $575,000."

The bank posted the property for foreclosure sale on April 5 and has refused to communicate with Sullins or provide a payoff, even though Sullins and Phytness Systems have offered to "continue paying all interest under the note and loan documents as well as monthly amount of principal," the complaint states.

Sullins adds: "Maverick Athletic Club has been an Arlington landmark for a generation; a list of the consequences to the community and the employees and members of the Maverick, if this foreclosure proceeds, includes fifteen employees being put out of work, 1,200 senior citizens losing their fitness and social facility, and other intangible effects that cannot be quantified or remedied monetarily."

Sullins seeks a restraining order and injunction to postpone the foreclosure sale.

He is represented by Stefanie Klein with Hill Gilstrap of Arlington, Texas.

The only defendant in the complaint is Compass Bank - not its employees.

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