For the many homeowners that have had to deal with foreclosure, or are currently dealing with foreclosure, there is a universal frustration in working with the mortgage servicers. Countless individuals express frustration at sending documents that are allegedly never received. Others are shocked by an extension of a trial modification, only to never be converted to a permanent modification – even after complete payments – without an explanation. Fortunately, there are laws that homeowners can use to hold mortgage servicers accountable for the actions (and inaction).
This case comes out of United States District Court, Northern District of Texas. The homeowners bought the house in 2003 and, at some point, fell behind. They filed for chapter 13 bankruptcy in 2010. During their bankruptcy case, the homeowners sent in a loan modification application to the then-servicer, Bank of America, on or about January 2014. The homeowners stated that about five weeks went by with no response from the servicer, so they sent a second loan modification application. After another month without a response, they sent a third loan modification application, followed by a fourth application around November 2014. The homeowners alleged that they didn’t receive a response from Bank of America concerning any one of the four loan modification applications sent in.
After that, the homeowners alleged that their loan, without notification, was transferred to another servicer, Rushmore. They then sent a fifth and sixth loan modification application to Rushmore in 2015, never receiving a response. The homeowners then received a Notice of Sale of their house, with a sale scheduled for November 3, 2015. The homeowners then sued the two servicers in state court (which was then transferred to federal court), alleging violations of a number of laws concerning mortgage servicing and noticing.
Bank of America responded with a motion to dismiss the case, alleging that the homeowners have failed to adequately plead their case. In their papers, Bank of America alleges that the homeowners didn’t include sufficient facts, such as the dates when they sent in the modification applications, how they were submitted, and what information they included. The court found that the homeowners pleading (that they sent in modification applications) was sufficient, at least this early in the case. The court also found that Bank of America failed to properly notify the homeowners of a change in mortgage servicer (to Rushmore). (For some reason, Bank of America sent the Notice of Mortgage Service Change to an address that was never reported to Bank of America by the homeowners.)
These homeowners experienced what many homeowners have experienced in trying to obtain a modification – non-responsiveness, allegations of non-receipt of documents, change of servicers in the middle of a case with no notification. Remember that there are laws to protect the homeowner against these kinds of abuses. Bryant v. Bank of America, 15-CV-3818-JJB (N. D. Texas, June 2016).