Culik Law Defeats Saxon’s Attempt to Deny MA Homeowner Rights Under HAMP
In a recent decision won by Culik Law, a federal judge in the District of Massachusetts recently denied an attempt by mortgage servicer Saxon Mortgage Services, Inc. to dismiss a homeowner’s lawsuit related to Saxon’s violation of loan modification guidelines under the Home Affordable Modification Program (HAMP).
In this case, the homeowner had a HAMP trial loan modification agreement signed by both himself and a representative of Saxon under which he was promised to be evaluated, and provided, with a permanent loan modification.
Despite the fact that the bank representative’s signature was in writing on the contract, Saxon filed a motion to dismiss the case, claiming that the borrower had no rights under federal and state law.
The court disagreed. Denying the bank’s motion, the judge held that the homeowner had stated claims for violation of the federal Fair Debt Collection Practices Act, for unfair and deceptive business practices under the Massachusetts Consumer Protection Act, Chapter 93A, and for breach of contract.
The judge wrote:
[Saxon] contends that because the [trial loan modification] originated out of the HAMP program, plaintiff cannot vindicate any rights that relate to HAMP. That argument is without merit. [Saxon] does not contend that HAMP or the HAMP guidelines preempt state-law contract actions. Indeed, the Court is aware of no precedent for the proposition that, as a general matter, contract’s relationship to federal law requires the dismissal of any state-law claims that arise under it. The fact that the TPP is a form contract created by the government makes no difference. If the [trial loan modification] is properly construed as a contract between the parties in this case, then plaintiff has standing to bring suit in order to recover for any breach of that contract.
(Emphasis added.) This decision further emphasizes that courts are being skeptical of banks’ routine violations of their obligations to homeowners to evaluate them for loan modifications.
The decision is Stagikas v. Saxon Mortgage Services, Inc.