Denied Loan Modification: Sue Your Lender or File Bankruptcy?

Bank Settles Countrywide Mortgage Lawsuit

Bank of America agreed to modify loans of homeowners facing foreclosure in 11 states in back in 2008. What does this mean for you? It could mean EVERYTHING if history repeats itself, and it does! If you are stuck in a bad loan, been denied a loan modification or have an upside down mortgage you need to read this entire article. Additionally, if you are facing foreclosure and feel your mortgage company has wrongfully denied you your piece of the government’s Making Affordable Mortgage Program (HAMP), or breeched a loan modification agreement you might want to consider suing your lender like many have. Also, if your loan has been sold around the country and transferred with MERS then your lender might have a difficult producing the note.

Needless to say, there are tens of thousands of consumers who made scheduled trial mod payments for months on time only to find themselves denied a permanent modification and a foreclosure sale date hanging over their head. These people need to step up and take action. Even if they already lost their home to foreclosure they may be able to either get their home back or seek monetary damages.

Back in 2008 Bank of America was facing a lawsuit over deceptive mortgage practices from Countrywide Financial Corp and agreed to modify tens of thousands of loans to keep people in 11 states from losing their homes. The initial pressure was administered by the Illinois Attorney General and followed up by several others.

Borrowers stuck with Countrywide Financial mortgages that they can't afford saw their interest rates reduced and principal balances cut.  Even people who couldn’t afford to keep their homes with such changes were able to get help moving to a new home. Back then, Illinois Attorney General Lisa Madigan said, "This is going to provide a tremendous amount of relief,” and officials from California negotiated the same settlement as well. Nine other states also joined the settlement, and other states could sign on as well, said Deborah Hagan, chief of Madigan's Consumer Protection Division. If all 50 states were to join, the settlement could have provided $8.7 billion in relief to over 400,000 borrowers, Hagan said.

In California alone, the settlement offered $3.5 billion in relief. For Illinois, that would translate to $190 million. "Countrywide's lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn't understand and ultimately couldn't afford," California Attorney General Jerry Brown Jr. said.

The other states joining the settlement were Arizona, Connecticut, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington. Who all suffered badly in the mortgage mess!

In hopes the settlement could serve as a model for steps that other lenders could take to make up for misleading mortgage practices it really didn’t. Major Banks like Bank of America, One West, Chase and Wells Fargo picked up troubled mortgages offered by Countrywide Financial, Indy Mac, WAMU and Wachovia/World savings for pennies on the dollar. There’s an old saying… “You got to pay to play”! In matter of fact, they’re suing each as well.

So What Does This Mean To You?

If you feel you’ve been getting the run-around or have become a victim of “loan mod hell” then don’t let them take your home without a fight. Many have gone up against the banks and reached non-disclosed settlements ending up in principal reductions and monetary settlements. While the attorneys at the Law Offices of Zhou & Chini can’t make any guarantees (attorneys can’t make guarantees), they can say this. The banks do NOT appear to be operating in their client’s best interest, and more so, seem to be up to their same old tricks. Cheating and lying to their customers! If you are stuck in a sticky situation and fear the thought of losing your home, you might have a good cause of action against your lender. Call the attorneys at Zhou & Chini today at (800) 972-9600 to schedule a free consultation or visit us at zhouchinilaw.com.