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Growing Numbers of Lawsuits Accuse Servicers of Ignoring HAMP Obligations

March 23, 2011

As Norco loan modification lawyers, we spend a lot of time suing loan servicers for failing to live up to their basic contractual obligations under HAMP -- the federal Home Affordable Modification Program. So we were interested to see articles suggesting that homeowners across the nation are pursuing similar lawsuits. MortgageLoan.com reported March 17 that a class-action lawsuit in New Jersey accuses CitiMortgage of reaping the rewards of being part of HAMP while denying permanent loan modifications to people who had met all of the requirements in a temporary trial. This is against HAMP rules. Another lawsuit out of Texas accuses BAC Home Loans Servicing, a division of Bank of America, of intentionally misleading, verbally abusing and delaying requests of borrowers.

The Texas article focuses on plaintiff Donna Batts, who is fighting to hold on to her home in northeast Austin. After months of phone calls that gave her confusing, misleading and contradictory information, she got a temporary loan modification. The very next month, while she thought she was still under consideration for a permanent modification, she got notice that her home was about to be sold at a foreclosure auction. That's when she called a legal aid group and eventually joined the Texas lawsuit. The lawsuit in New Jersey alleges that CitiMortgage is contractually obligated to grant permanent HAMP loan modifications to people who meet the guidelines and make payments on time, since it took TARP money. However, they say, the servicer has improperly denied permanent modifications or drawn out the process longer than the three-month trial period.

This is exactly the kind of lawsuit that our Diamond Bar predatory lending attorneys help clients pursue here in California. In fact, we suspect the Texas article is right that such lawsuits are popping up all over the United States, because the shabby way loan servicers treat borrowers is a national problem. From our clients and the media, we've read over and over again about loan servicers denying loan modifications for no reason or for reasons that aren't true. They're also notorious for the runaround and contradictory instructions Batts described, which we believe is a delaying tactic. There might be some accountability in states with judicial foreclosures, but here in California, independent oversight of banks' actions is only available when borrowers sue.

If you're ready to consider a lawsuit to ensure that your application for a loan mod gets the consideration it deserves, you should call Howard Law PC. We have represented clients looking for a loan modification, since the beginning of the housing crisis -- so we understand the most common delaying tactics from loan servicers and how to fight back. We don't believe it's a coincidence that loan servicers can run other parts of their business competently, yet consistently refuse to give borrowers straight, simple answers, lose paperwork and start foreclosures too early. Our Mission Viejo foreclosure defense lawyers help clients fight back by suing to make sure their applications are seriously considered and, if necessary, stop an immediate foreclosure.

Howard Law offers free, confidential case evaluations, so you can talk to us about your rights and your options at no risk. To set up a meeting, call us toll-free at 1-800-872-5925 or send us an email today