Marion and Vivian Johnson (plaintiffs) estimated that their house was worth $260,000. The couple had a bad credit history that made it impossible for them to refinance their mortgage. Jason Washington (defendant) gave the Johnsons a written proposal for a multifaceted alternative to refinancing. The Johnsons accepted Washington's offer without reading the proposal. As described in the proposal, the transaction required the Johnsons to deed the house to Washington, in return for Washington's payment of $212,800, most of which went toward lifting the Johnson's existing mortgage, with the balance going directly to them. Washington financed his purchase with mortgage-secured loans, and asked the Johnsons to make 12 monthly payments to help him pay off the mortgages. In return, Washington permitted the Johnsons to remain in the house for as long as they wanted, and gave them a 13-month option to repurchase the house. The Johnsons stopped making payments after a few months. Later, the couple sued Washington for misrepresenting the transaction and violating various state and federal mortgage laws. The federal district court granted summary judgment for Washington, and the Johnsons appealed to the Fourth Circuit Court of Appeals.