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US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

foreclosure defense lawyerJustice Robert Torres, sitting in Supreme Court in Bronx County, recently ruled US Bank and Wells Fargo were barred from collecting any interest, unpaid late fees or attorney’s fees until a homeowner was given an appropriate review and determination of his mortgage modification application. A foreclosure action was brought against a homeowner named Rodriguez in Bronx County.

Rodriguez brought an application to find that US Bank and the loan servicer on this mortgage, Wells Fargo Bank, had violated their duties and obligations under the HAMP guidelines to negotiate in good faith at a foreclosure settlement conference. Rodriguez took the position Wells Fargo mishandled and misapplied the HAMP guideline with regard to his application for a mortgage modification. He further argued both US Bank and the loan servicer, Wells Fargo, had failed to act in good faith as required by financial institutions under the HAMP program.

Court Rules Against the Banks

Justice Torres found that Rodriguez had provided sufficient documentation to his allegations concerning the violation of the good faith requirement by the financial institutions at the settlement conference. His decision stated in this foreclosure proceeding, the financial institutions did not follow HAMP guidelines such as violating section 3408(f) regarding the duty to proceed in good faith. The Court took into consideration the presentation by Rodriguez’s representative that Wells Fargo did not explain why they refused to evaluate him under Tier 1 and Tier 2 programs. Under the HAMP guidelines a loan servicer must evaluate the homeowner pursuant to these guidelines. Judge Torres’ ruling stated Wells Fargo had not complied with the current HAMP directive and failed to work towards a loan modification in good faith.

Conclusion

Financial institutions must cooperate and work with homeowners and evaluate mortgage modification applications pursuant to the HAMP guidelines.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure attorney representing homeowners in foreclosure lawsuits. His office seeks to keep their clients in their homes by helping them obtain mortgage modifications and by challenging the foreclosure lawsuits brought by financial institutions, and countersuing them for violating federal and state laws.

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