In 2013, George Ralph Elliott applied to refinance his Ohio home ahead of a separation from his fourth wife, claiming both his monthly rental income and the spousal support he would soon receive. He didn’t know it at the time, but Elliott’s application would later test a relatively obscure banking law — the CFPB’s Ability To Repay rule — and strike fear into the hearts of mortgage industry executives across the country. 

The two-story farmhouse in a rural corner of Milford Center, Ohio, was one of at least two homes that Elliott, who had been a real estate agent for 30 years, owned with his wife, Golan, who was also a Realtor.

First Federal Community Bank of Bucyrus’ loan committee initially rejected the application. But the soon-to-be ex-wife met with bank executives to assure them she would pay the support — which would provide $2,200 a month to Elliott. The in-person meeting worked, and the bank approved the loan. But the couple didn’t separate as planned.

Golan paid the spousal support for just three months before stopping. Elliott decided not to adhere to the separation agreement, instead seeking more alimony from the divorce court.

Then Elliott lost his job, and bills from the divorce proceedings began to pile up. The divorce judgment, which was far less favorable to Elliott than the separation agreement, ordered him to pay Golan a substantial amount. The divorce court also ordered Golan to pay Elliott just $250 per month in spousal support for three years. By early 2017, Elliott defaulted on his mortgage. 

Elliott went on the offensive. That same year, he sued his lender for violating the Truth in Lending Act.