In 2012, under the Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), the Seventh Circuit Court of Appeals ruled that despite having signed a loan modification agreement and entered into a trial period, the homeowner could maintain a private cause of action against the lender or servicer under certain circumstance. The court held that borrowers who have entered into a trial period plan under HAMP can seek relieve when those servicer fail to abide by the terms of the trial period payment plan.
Under HAMP, the borrowers are provided with a trial period, requiring them to make payments for usually three months, and thereafter, the final modification agreement is supposedly mailed to the homeowner borrower. However, in cases, the bank does not follow through with the final HAMP modification and fails to offer it to the borrower. Or may fail to adhere to the same promised payments as set forth in the trial period.
In Wigod, the homeowner Wigod, was given a trial period payment plan and advised that upon completion of the trial period, the bank would offer a permanent modification after all the payments were made. The borrower made the payments and the bank reneged on its offer and declined a final modification. The borrower sued alleging breach of contract, promissory estoppel, consumer fraud and fraudulent misrepresentation.
The Seventh Circuit on appeal found that the lender misled the homeowner into believing that it would offer her a permanent modification.
Following Wigod, courts across the nation have been diligently reviewing their trial period plans to avoid being sued. The homeowners should have in fact signed the trial period plan and received it back fully signed by the lender.
Ensure that your loan modification is carefully processed, eligibility determined, and diligently approved by the lender by hiring the Law Office of Jacqueline A. Salcines, PA to enforce and negotiate it for you. We are always on top of all court rulings for homeowners and here to protect your best interests.
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