Wrongful Foreclosure Lawsuit to Proceed Against Astoria Bank
The homeowner claimed that the company who owned and serviced his mortgage, Astoria Bank, committed fraud and violated the Massachusetts Consumer Protection Act by promising to review him for a loan modification, but then foreclosed instead.
Astoria Bank filed a motion to dismiss the case, arguing that despite its written assurance to the homeowner that “no foreclosure sale will be conducted and you will not lose your home,” it was allowed to foreclose anyway. Astoria Bank also argued that the homeowner’s lawsuit was preempted by federal law.
Rejecting these arguments, the judge held that there is “a plausible claim that Astoria Bank had a present intention, at the time it sent the letter, to foreclose during the evaluation period.” The judge also held that federal law did not preempt the lawsuit because the homeowner’s claims were related to the duty not to misrepresent material facts.
The homeowner’s lawsuit against Astoria Bank is now permitted to proceed toward trial.
Here is a link to the court’s decision: Monks v. Astoria Bank
During the loan modification process, banks and mortgage services often send confusing and even conflicting notices. And homeowners who rely on these notices frequently suffer harm such as a denied loan modifications or foreclosure. When this happens, the homeowner may have a claim under laws like the Massachusetts Consumer Protection Act.
Culik Law is a Massachusetts consumer protection law firm. We have handled many lawsuits against major banks, lenders, and mortgage servicers related to unfair practices and predatory lending. If you have had a problem with your mortgage company, contact us to see if we can help.