First Horizon Faces Scrutiny in NY Loan Case

First Horizon Home Loan Corp., a subsidiary of the nationally chartered bank, First Tennessee National Corp., has offered to absorb loan payments and reimburse a Rensselaer County homeowner who alleges the bank illegally threatened to foreclose on his home.The move comes after Attorney General Eliot Spitzer filed a lawsuit earlier this week on behalf of the consumer, Richard Hall, of Greenbush, N.Y. The bank admits a discrepancy in amortization resulted in the customer continuing to make payments via automated debit after the 25-year loan should have been retired. The consumer overpaid by $9,461. "It's great, but I think it's unfortunate that it had to get to this point," said Donna Heinrichs, the consumer's attorney. "In my opinion, the bank was using foreclosure as a way to attain more money than was rightfully owed," she said. The lawsuit is a direct challenge by the attorney general to the Office of the Comptroller of the Currency, which maintains that it has the sole right to regulate nationally chartered banks. As of MortgageWire's deadline, the case was still pending with the attorney general's office and no settlement had been reached between the two parties.