Bank Can Be Sued in HAMP Dispute
HOMEOWNERS MAY SUE BANKS UNDER HAMP WHEN BANK DENIES PERMANENT LOAN MODIFICATION AFTER HOMEOWNER COMPLIES WITH THE TRIAL PERIOD PLAN
The 4th District Court of Appeal said reversed in part. The Appellate court reversed and allowed her to go forward to sue JPMorgan Chase Bank for (1) fraud; (2) negligent misrepresentation; (3) breach of written contract; (4) promissory estoppel; and unfair competition. Under the United States Dept. of Treasury, HAMP Supplemental Directive 09-01, if a lender approves a TPP, the borrower complies with all of the terms of the TPP, and all of the borrower’s representations remain true and correct, the lender must offer a permanent loan modification.
As a party to a TPP, a borrower may sue the lender or loan servicer for its breach. Here Chase approved West for a TPP, which West dutifully complied with. Consequently, Chase was required to offer West a permanent loan modification under HAMP and its failure to do so constituted a breach of their written contract. Accordingly, West properly pleaded a breach of written contract claim, and the trial court erred in dismissing her claim without leave to amend. (West v. JPMorgan Chase Bank N.A., California Courts of Appeal, 4th District, No. G046516, March 18, 2013; 2012 DJDAR 3471.