A homeowner by the name of Lucic brought an application before Supreme Court Justice Peter Moulton who sits in New York County. The motion in the foreclosure case was to stop the mortgage payments from accruing in the foreclosure lawsuit that had been brought against him concerning his condominium apartment. Justice Moulton took the position the 6.5% interest rate on the mortgage held by Bank of America was a bit high taking into consideration the current interest rate payments.
HAMP Application
Bank of America opposed the motion. They claimed they had reviewed the HAMP application submitted by Lucic and they denied it pursuant to the Freddie Mac HAMP guidelines. Justice Peter Moulton found the argument submitted by Mr. Lucic, that Bank of America violated New York Civil Practice Law section 3408. The bank had failed to timely and properly process his mortgage application for a loan modification. They also continually made demands for the same documents which had previously been submitted to the financial institution. The court took the position Bank of America had engaged in a “two year run around”. The court took into consideration Lucic had diligently and faithfully provided Bank of America with the information they requested on many occasions. The court therefore took action and tolled (stopped) interest from accruing on this foreclosure from April 1, 2010 through April 30, 2012.
Conclusion
Each and every week homeowners come into my office and they tell me the same thing. They submitted a mortgage modification application and the bank they were dealing with continually asked they resubmit the same information over and over again. Sometimes these submissions took place over a period of years. The reason why the mortgage modification process doesn’t work is the banks have refused to properly fund this program. By under staffing the program, and not setting up internal guidelines, they have frustrated individuals who apply for mortgage modifications. For the large majority of home owners seeking help, HAMP instead of helping them, frustrates them.
