Homeowners Make Progress Toward Loan Modification

Last year, more than 40 class actions were filed by homeowners against Bank of America, N.A. and its subsidiary, BAC Home Loans Servicing, LP (“BAC”), because these companies were improperly administering the federal Home Affordable Loan Modification Program (“HAMP”).  These homeowners tried to participate in HAMP to modify their home mortgage loans and avoid foreclosure on their homes.  BAC entered into an agreement with each plaintiff for a temporary trial modification of that plaintiff’s note and mortgage.  If the borrowers complied with the terms of the agreement, including making timely reduced mortgage payments, the servicer was required to offer the borrower a permanent modification at the end of the trial period.  The plaintiffs allege that although they fully complied with the terms of the agreements, the defendants failed to do what they were obliged to do; either  grant the borrowers a permanent modification or  provide the borrowers with a written response  to the borrowers’ applications. 

Last month, Judge Rya W. Zobel of the United States District Court for the District of Massachusetts provided some good news for these homeowners. The court refused to dismiss plaintiffs’ claims for breach of contract, breach of the duty of good faith and fair dealing, promissory estoppel, and violations of the California, Illinois, Arizona, Maryland, New Jersey, Pennsylvania, Wisconsin, and Oregon consumer protection laws.  As a result of this ruling, the plaintiffs have jumped a significant hurdle in their fight to obtain permanent loan modifications. 

Abbey Spanier is involved in this case and will provide updates as the case progresses. If you believe you have been improperly denied a home loan modification, please tell us your story.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.