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Massachusetts Judge Denies Fannie Mae Motion to Dismiss Loan Modification Lawsuit


Fannie Mae argued that it could not be held responsible for the actions of the mortgage company, GMAC, in denying the loan modification. It also argued that even though GMAC could not be included in the lawsuit (because it was in bankruptcy), the mortgage company was necessary to resolving the homeowner’s claims.

Rejecting Fannie Mae’s argument, the judge ruled that the bank’s repeated requests for loan-modification documents that had already been sent, miscalculation of income, and denying the loan modification application based on incorrect facts, were sufficient to raise an issue about whether Fannie Mae violated Massachusetts law.

The takeaway from this case is that even though not every instance of mishandling a loan modification automatically results in a viable legal claim against a bank, a pattern of repeated, unjustified denials, combined with other unfair practices, is sufficient to raise a claim.

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Culik Law is a Massachusetts Attorney / Law Firm. The posts on Culik Law’s blog are not intended as legal advice. If you have questions about your particular situation, CONTACT CULIK LAW for a Free Consultation.