An an astounding decision today out of California, the 9th Circuit Court of Appeals ruled in favor of the Defendant/Borrowers and against Wells Fargo, finding and ruling that the homeowner who was approved for a trial period modification could sue the lender when a final modification was denied. For years now, borrowers, and the attorneys who represent them, have been dumbfounded when their clients were offered a trial period, that went on and on and on, without end. Only to then receive a denial after payments were made timely under the trial period.
When lenders were questioned, the answer was almost always, the borrower did not remit the final package back on time. Therefore, it was denied. Not until the executive offices of the lender or other complaint procedures were explored, did the banks react and give the final modification. “I can vouch for this in my own experience. With modifications we have obtained on behalf of my clients, only to then have the lender change their mind”Jacqueline A. Salcines, Esq.
Now, after this case, styled Corvello v. Wells Fargo and Lucia v. Wells Fargo, the 9th Circuit Court of Appeals rules that borrowers who find themselves in this position, comply with all bank requirements, are offered a trial period and then denied, have standing to fight back and sue the bank. The court is just not going to put up with this nonsense.
In Corvello and Lucia cases, the homeowners were approved for the HAMP modification. After the trial period, the lender, Wells Fargo, denied the modification citing that the final mod was not sent back to them on time.
With these pivotal cases, precedent is now set for the banks to be more honest and fair in dealing with homeowners and their attorneys when it comes to loan modifications under HAMP.
In my office, we always qualify the borrower before hand. We know whether they will qualify for HAMP and what they will most likely be given under the program. We submit all documents on time and follow up timely with the lender to make sure the modification request is moving along to be approved. Often times, the lender will remit documents directly to the borrower and omit the attorney from the equation. Why this is done, is unclear. But now, more than ever, under these two cases, as long as the borrower signs all docs and sends them back on time, they can not be denied under HAMP