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Can I Sue My Mortgage Lender or Servicer For Not Offering Me a Permanent Modification?

Posted on Apr 5, 2012 in Foreclosure - Saving Your Home, Illinois, Legal, Mortgage Foreclosure Defense, Mortgage Modifications, Wisconsin

Well, to start, anyone can sue anyone.  That doesn’t mean you’ll win or collect.  But a new case from the 7th Circuit Court of Appeals (covering Wisconsin, Indiana and Illiinois) suggests that you may be able to.

In this case, coming from the Northern District of Illinois, Ms. Wigod was working with her servicer, Wells Fargo Home Mortgage, and had entered into a Trial Period under the government’s Home Affordable Modification Program.

As anyone who has entered one of these trial periods knows, the process is frustrating and often offers false hope.

Sometimes, homeowners fail to make payments during the trial period.  Other times they fail to get the signed documents back by a set time.  In other cases, homeowners make the payments AND send in the documents, but the servicers make math errors, miss or misprocess payments, or extend the trial payments at the end of the 3 months.

In Ms. Wigod’s case, Wells Fargo submitted a letter to her after her trial period was done informing her that regretfully they could not offer her a permanent modification due to investor guidelines.  This appeared to contradict what the HAMP trial offer letter stated, so she sued Wells Fargo. She sued in District Court to try to create a big class action lawsuit against everyone who faced similar problems with Wells Fargo or Wachovia.

Two years after her suit, the Seventh Circuit Court of Appeals allowed part of her case to continue.  So she’ll be back in trial court to try to establish her own individual lawsuit, but also the class action.  Based on this, we predict more people will try to raise identical claims in both state and federal courts in Wisconsin, Illinois and Wisconsin.

While she hasn’t been awarded anything yet, Ms. Wigod was able to confirm from the court what most of us knew deep down to be true already:  As part of these programs, the servicers and lenders made promises to homeowners.  If they fail to live up to those promises, the homeowners can sue and seek their damages.  If you feel you were in a similar situation and want to speak with an attorney from our offices in Illinois or Wisconsin, please contact us today.

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