Had enough with being qualified for a loan modification and getting denied based on what appeared to be incompetence by the lender employees? Some Florida Courts have had enough of lenders failing to honor Loan Modification Agreement documents and they are enforcing them against the banks. Recently my law firm won a foreclosure trial for a borrower because Wells Fargo had failed to honor a contract (the loan modification agreement) with the borrower.
Similar reports of purposeful and contrived modification rejection are surfacing nationwide and are the subject of a federal lawsuit (see link below for allegations against Bank of America).
For our win, in 2011, after the borrower was granted a “trial modification”, the lender sent a Loan Modification Agreement to the borrower along with a Federal Express envelope to return it to the lender once it was executed. The borrower signed it, had it notarized and returned the document to the lender, and started making the required payments under the permanent loan modification.
After one month the lender sent to the borrower another identical Loan Modification Agreement package. Puzzled, the borrower signed the documents, got them notarized and sent them back to the bank using their supplied Federal Express envelope. In the meantime the borrower has made its monthly payments and the lender has accepted them.
Now in its 3rd month, the lender sends to the borrower yet a third package of documents, with no special explanation as to why. The documents are identical except for the address, which is changed to correct an apparent error in the street name (Glenn vs Glend) which apparently was on the previous documents, and by adding a “continuous marriage affidavit” document to be signed by the borrower. The street name was a mere “scrivenors’ error” was not material to enforcement of the documents, since the correct legal description and references to the underlying mortgage being modified was correctly stated on the documents, thus making the document legally sufficient. The Continuous Marriage Affidavit (stating that the borrower has been continuously married since a stated date) was a problem however, since the borrower has never been married and therefore could not sign it truthfully.
After unsuccessfully trying to make contact with the lender by telephone and email and letter to get an explanation about the Continuous Marriage Affidavit, the borrower gave up and did not sign the third package and did not send it back to the lender. She continued to make her payments. One month later the lender rejected the borrower’s payment and continued to prosecute the foreclosure action that it had failed to dismiss pursuant to the terms of the Loan Modification Agreement paperwork .
For the next year the borrower tried to reach the lender and was continuously told that there was no modification.
At trial on the foreclosure complaint, after hearing testimony from the borrower that the lender determined as “truthful and accurate” and that their bank witness had “nothing more to add”, the court ruled that the lender had offered to the borrower a loan modification and that the borrower had signed it, that the lender had received both the signed Loan Modification and the payments without objection, and that the lender wrongfully rejected the payment and wrongfully pursued the foreclosure action thereafter.
Additionally, ruling “in equity”, the court ordered that all of the payments rejected (all of the payments after and including the rejected payment that would not be accepted by the lender) as to the interest amounts, had to be added to the back of the loan and that there would be no interest lump sum payment to “reinstate” the Loan Modification Agreement. This was a perfectly logical solution and true justice for the parties – but it shows the senseless actions by the lenders and their willful attempts to deny loan modifications for their borrowers. See Here Lies Bank of America, Ex-Employees Allege | Fox Business
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© 2013 Richard P Zaretsky, Esq. and A. Max Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
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