Loan Modifications

Loan modifications are changes made to the terms of an existing loan outside the specifications contained in the original loan agreement. In a mortgage situation, loan modifications are typically made to assist... more +
Loan modifications are changes made to the terms of an existing loan outside the specifications contained in the original loan agreement. In a mortgage situation, loan modifications are typically made to assist borrowers in meeting their obligations and avoid foreclosure. Such mortgage loan modifications may include reduction of principal amount or interest rate, lengthening of loan term, and monthly payment caps. less -
News & Analysis as of

How to Aggressively Defend Against Lender Liability Lawsuits

Introduction - Following an economic downturn, lenders are inundated with lender liability suits typically based on purported promises to extend the maturity dates of loans, alter the terms of loan agreements, or to...more

Treasury and HUD Announce Changes to Making Home Affordable Program

On December 4, Treasury and HUD announced changes to Making Home Affordable (MHA) to better assist struggling homeowners. The changes are designed to motivate homeowners in MHA to continue making timely mortgage payments. The...more

UDAAP Council Weekly UDAAP Standards Report - 12/03/14

Every week, courts around the United States issue decisions addressing aspects of civil UDAAP claims. In an effort to illuminate the UDAAP standards, below is a sampling of some of this week’s UDAAP decisions on the...more

California District Court Denies Certification Where Putative Class Members Lack Standing and Plaintiff Fails to Conduct Extensive...

The United States District Court for the Eastern District of California recently denied class certification in a case alleging wrongdoing by a loan servicer in connection with the Home Affordable Modification Program...more

HAMP and Section 75-1.1, Part 2

In yesterday’s post, we discussed when a lender’s failure to comply with guidelines under the federal Home Affordable Mortgage Program (HAMP) might violate N.C. Gen. Stat. § 75-1.1 as well. We analyzed a very recent federal...more

HAMP and Section 75-1.1, Part 1

In a recent article, Matt Sawchak explained per se violations of section 75-1.1. When courts recognize a per se violation of section 75-1.1, they are saying that violating a separate source of law—a separate statute, a...more

Mortgage Modifications: Senior Loans May Become Not So Senior

Sperry Assoc. Fed. Credit Union v. US Bank Nat’l Ass’n (In re White), 514 B.R. 365 (Bankr. E.D.N.Y. 2014) – A junior mortgagee sought to subordinate the senior mortgage loan based on an argument that modification of...more

GAO Recommends Better Data Analysis to Improve TARP Housing Programs

On October 6, the GAO released a report recommending that the Treasury Department improve its analysis of data it collects on HAMP. As of June, Treasury has disbursed only about one-third of the $38.5 billion in TARP funds...more

CFPB Issues First Enforcement Action for Servicing Rules Violations

The Consumer Financial Protection Bureau recently announced a consent order with Flagstar Bank, F.S.B., alleging unfair acts and practices under the Consumer Financial Protection Act (CFPA) and violations of the CFPB's...more

Freddie Mac Updates Single-Family Seller/Servicer Guide

On September 15, Freddie Mac released a bulletin updating portions of Single-Family Seller/Servicer Guide (“Guide”) governing foreclosures and foreclosure alternatives. The updates include changes to the loan modification...more

California Retroactively Extends Mortgage Debt Forgiveness Tax Relief, But Only For 2013

At the end of July, the California state legislature enacted an extension of its modified conformity to federal mortgage debt forgiveness tax relief for 1 year, through 2013. The law allows exclusion of income realized as a...more

Freddie Mac Updates Alternative To Foreclosure Requirements, Other Servicing Policies

On July 15, Freddie Mac issued Bulletin 2014-14, which announced a new automated settlement process for mortgage modification settlements. Effective December 1, 2014, servicers must submit the required settlement data for a...more

New York Adopts Shared Appreciation Mortgage Regulations

On July 9, the New York DFS announced that it finalized a rule that allows for shared appreciation mortgage modifications, which permit banks and mortgage servicers to reduce the amount of principal outstanding on a...more

CFPB issues new “snapshot” report on consumer complaints

The CFPB has issued a report on consumer complaints received from July 21, 2011 through June 30, 2014. According to the CFPB’s “Snapshot,” it handled approximately 395,300 complaints during this period, with its Consumer...more

New York DFS Unveils Shared Appreciation Mortgage Rule

The New York Department of Financial Services (DFS), in accordance with Section 6-F of the New York Banking Law, recently adopted regulations authorizing shared mortgage appreciation modifications in limited...more

Court Confirms Bank Can Be Held Liable for Conduct and Representations Occurring During Loan Modification Process

A California Court of Appeal recently held that a defaulting mortgagee can assert claims for breach of contract, wrongful foreclosure, unfair business practices and negligent misrepresentation against the foreclosing bank...more

Fannie Mae, Freddie Mac Announce Targeted Modification Program

Recently, Fannie Mae (Servicing Guide Announcement SVC-2014-12) and Freddie Mac (Bulletin 2014-11) introduced a temporary modification option targeted to borrowers located in Detroit, Michigan as part of the FHFA-directed...more

Aurora Resolves Mortgage Modification Class-Action Lawsuit for $5.3 Million

A former goliath of the non-prime lending market, Aurora Loan Services, LLC (“ALS”), recently resolved a class-action lawsuit alleging that it fraudulently induced distressed California borrowers to enter into purported...more

Fannie Mae Updates Delinquency Management, Default Prevention Policies

On May 16, Fannie Mae announced through Servicing Guide Announcement SVC-2014-07, that for a borrower who submits a complete Borrower Response Package (BRP) or incomplete documentation 37 days or less prior to a foreclosure...more

U.S. District Court Reaffirms Distressed Debt Funds Not Eligible Assignees under Loan Agreement

A recent decision by the U.S. District Court for the Western District of Washington found that certain distressed debt funds were not “financial institutions” under the definition of “Eligible Assignee” in the applicable loan...more

Texas Supreme Court Allows Capitalization Of Interest, Fees, Escrow Items For Home Equity Loan Modifications

On May 16, The Texas Supreme Court held that the state constitution does not prohibit the restructuring of a home equity loan as long as the original loan met constitutional requirements and terms of the original extension of...more

Fair Servicing: Regulators Watch for Discrimination by Servicers

Federal regulators delivered that message in October 2013, reminding loan servicers that they are subject to fair lending liability and must manage their fair lending risks. The regulators’ message concerning “fair servicing”...more

Borrowers File Petition for Writ of Certiorari Related to Permanent Loan Modification Under HAMP

Citing a circuit split among the Seventh, Ninth and Eleventh circuits and the “great importance” of settling the question, the borrowers filed a petition writ of certiorari in the Supreme Court asking the Court to determine...more

Appellate Court Notes - Week of April 21

SC18877 Concurrence - Sarrazin v. Coastal, Inc. - Foreman for a plumbing contractor sued the company claiming he was entitled to overtime for traveling to job sites all over the state as he had to do so in a company...more

Fannie Mae Updates Modification Policies

On March 28, Fannie Mae issued Servicing Guide Announcement SVC-2014-05, which provides, as recently promised, updated guidance regarding standard and streamlined modification programs. The announcement informs servicers...more

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