Homeowners are taking legal action against banks for not honoring their end of the deal in trial mortgage modifications. Some of the homeowners claim the trial modifications led to their homes being foreclosed by the banks.
Attorney Shennan Alexandra Kavanagh told the Associated Press that the homes of several of the plaintiffs were foreclosed after their payments were reverted to their original sums. The homeowners, who took part in trial mortgage modifications under the government’s Home Affordable Modification Program, said they were unable to pay the original sum.
The lawsuits accuse the major banks of breach of contract under the HAMP. The suits claim the banks agreed to make trial modifications permanent when they entered into the HAMP program as part of the bank bailout, the AP report said.
Under the HAMP, the banks were encouraged to provide trial mortgage modifications said Laurie Maggiano, policy director at the Treasury Department’s Homeownership Preservation Office. The banks were under no obligation to make trial modifications permanent, Maggiano said. In June, however, new regulations stopped loan servicers from offering the trials based on stated income.
Attorney Kavanagh believes there are tens of thousands of borrowers in Massachusetts who are affected and who could be covered by the lawsuits if the legal action is elevated to class action status. Kavanagh noted that one of the complaints against Bank of America Corp. (NYSE:BAC) was consolidated with other lawsuits in five other states.
Meanwhile, the Housing and Economic Rights Advocates legal services group sued JPMorgan & Chase Co. (NYSE:JPM) over claims that the bank profited from collecting fees during trial morgage modifications that eventually ended in foreclosures, the AP report said. Attorney James C. Sturdevant, who is assisting in the lawsuit said: the banks are “participating in the crisis they had helped to foment by refusing to honor loan modifications they had already agreed to.”
© 2010 Micmn.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.
Why are the CEO’s of the Banks not being charged with Criminal fraud ? If it was one of us regular people, we would be sitting in Jail until trial .