Homeowner Lyo brought a breach of contract proceeding against Bank of America. Lyo had attempted to obtain a mortgage loan modification from Bank of America. She had contacted Bank of America. Bank of America sent her an application for a loan modification. Thereafter Bank of America accepted and mailed Lyo an agreement for a trial modification mortgage plan.
Payments Made Under Trial Mortgage Modification
Lyo made all necessary payments under the trial program. She continued to make payments which were accepted by Bank of America even after the trial program finished. However, Bank of America never sent her a permanent mortgage loan modification. Bank of America notified Lyo she did not meet the eligibility requirements for a modified loan. They claimed this was due to the present value of her home.
23 Payments Accepted, 24th Payment Rejected
Bank of America had accepted payments from Lyo for 23 consecutive months after she had agreed to the trial period mortgage modification plan. Bank of America rejected her 24th payment. Supreme Court Justice Judith McMahon sitting in the Supreme Court Part in Richmond County ruled Lyo’s temporary mortgage modification plan could be considered an enforceable agreement. This agreement granted Lyo a loan modification as described within the terms of the agreement. She found the language in the temporary mortgage modification plan unequivocally provided, if Lyo complied with all the conditions, Bank of America was obligated to grant her a permanent loan modification. Bank of America’s application to dismiss Lyo’s breach of contract lawsuit against it was therefore denied.
Conclusion
Numerous homeowners come to my office each and every month with a story of woe concerning temporary mortgage modifications. The story goes as follows, the bank offered them a temporary mortgage modification and they accepted it. They thereafter made payments for a period of time, usually six months, under the temporary mortgage modification plan. Thereafter the bank comes up with some type of reason to turn them down for a permanent loan modification. Sometimes the reasons are very spurious. Homeowners who fulfill their obligations under temporary mortgage modification plans should always be given a permanent mortgage modification under the same terms!
