Homeowners Can Sue Banks for Fraud Over Broken Loan Modification Promises
By Nick Alden, Esq.
The Second District Court of Appeals in Los Angeles has ruled that banks are “legally bound by their loan modification promises,” and can be sued for fraud when homeowners rely on such promises and are damaged as a result.
Did I already say that it’s about damn time? Well, it totally is.
Claudia Aceves received a foreclosure notice from U.S. Bank, so she filed for bankruptcy protection and the foreclosure was halted. Her plan was to file Chapter 13, which would mean that she could very likely keep her home and under a court approved repayment plan.
Then she got a call from the nice folks at U.S. Bank… and the bank’s representative said… I’m paraphrasing here…
“Oh, Claudia, Claudia, Claudia… this is all just one big misunderstanding. You don’t need to trouble yourself with the whole bankruptcy thing. We’d be happy to help you get your loan reinstated and modified… assuming, of course, you wouldn’t mind just withdrawing your bankruptcy filing.”
So, she did. Read more…
