• DYE CULIK PC | Consumer Protection Division

Lawsuit Over Attempted Foreclosure by Bank of New York, Consumer Protection Act Violations, Should N


The homeowner filed suit against the investor who claimed to own her mortgage, Bank of New York Mellon. As part of the lawsuit, she also sued the mortgage servicer. The lawsuit alleged that that Bank of New York did not own her mortgage, and that the servicer was liable for both fraud and violation of the Massachusetts Consumer Protection Act, called Chapter 93A.

Bank of New York and the servicer filed a motion to dismiss the case, arguing that there had been no wrongdoing.

The judge denied the bank’s motion in its entirety. He held that, assuming the homeowner’s allegations to be true, the bank did not hold both the mortgage and note. Under Massachusetts law, a bank must hold both the mortgage and the promissory note before it is allowed to schedule a foreclosure.

He also held that the allegations that mortgage servicer misrepresented whether it participated in the Home Affordable Modification Program, and that there was an investor restriction prohibiting loan modifications, met the standard for fraud and violation of Chapter 93A.

The Home Affordable Modification Program, called HAMP, is the federal loan modification program created after the recent economic collapse.

The consumer’s lawsuit is now allowed to proceed to trial.

#loanmodification #Chapter93A #mortgage #HAMP #foreclosure #consumer