Homeowners With Wells Fargo Mortgages Can Sue Wells Fargo If They Were Denied Permanent Loan Modifications
Wells Fargo must face lawsuits by homeowners with Wells Fargo mortgages who claim the largest Wells Fargo refused to offer them permanent mortgage modifications for which they had qualified.
The 9th U.S. Circuit Court of Appeals said Wells Fargo was required under the federal Home Affordable Modification Program to offer homeowners with Wells Fargo mortgages loan modifications who demonstrated their eligibility during a trial period.
As a result, the Appellate Court reversed the dismissals by a San Francisco federal judge of two lawsuits seeking class-action status.
A federal appeals court in Chicago also reached a similar conclusion last year.
Wells Fargo said it had $352 million of loans under HAMP in a trial modification period as of June 30.
Consequently, Wells Fargo tried to spin as Wells Fargo does by saying:
The Obama Administration unveiled in 2009 as a way to keep people in their homes. HAMP pays mortgage lenders and servicers to rewrite loan terms for borrowers who cannot afford their payments.
The program has also spawned other litigation. The 9th Circuit judges also noted it “seems to have created more litigation than it has happy homeowners.”
A Massachusetts lawsuit accused Bank of America of offering employees financial incentives to stall HAMP applications. The lawsuit alleged foreclosures or in-house loan modifications were more profitable for BofA.
The Massachusetts judge is also is considering making that case a class action.
Phillip Corvello claimed he complied with a written trial period plan for a HAMP modification.
The court said that to rule in the bank’s favor would render the benefits for borrowers illusory.