Last Updated Apr 26, 2011 9:14 PM EDT
Update #2: Today, Arizona filed suit alleging Bank of America engaged in Loan Modification Fraud.
Loan modification hell: Judging by the number of people who are contacting me, the problem is getting worse - not better.
Starting Sunday, I will be attending the Five Star Conference, in Dallas, sitting on a panel moderated by FOX News' Chris Wallace. This is a conference for lenders who service loans that are in default and the vendors that feed into that conference.
How many folks is that exactly? Try 5,000+. Yup: 5,000 lenders, servicers, and folks like Robert Klein, of Safeguard Properties, whose company does 1 million inspections of homes whose owners have either defaulted on their loans or have been foreclosed on by their lender. (I had a truly eye-opening conversation with Klein earlier this week. Bottom line: He thinks the foreclosures have devastated every corner of America and the foreclosure situation is getting worse.)
Loan Modification Hell LawsuitsMeanwhile, I was sent this early in the morning. If you are filing a similar suit, please post a link to it here to help those who are considering the same action.
SECOND DISTRICT COURT, STATE OF UTAH
IN AND FOR THE COUNTY OF WEBER
JEFFREY L. SHURTLIFF, Complaint
Civil No. WELLS FARGO BANK NA 100906927CN
FREDDIE MAC CORPORATION
Defendants. Judge : Jones
Comes now Jeffrey L. Shurtliff, complaining of the
defendants, and alleges as follows:
1. Plaintiff entered into an agreement with the Wells Fargo
to service his mortgage on his house, located at 4180W.
2475S. Ogden, Utah, on April of 2008. The loan is a Freddie Mac
2. Plaintiff notified the defendants of possible future default
of loan payments to the defendants, on October 28,
2009. Plaintiff was current with the mortgage at the
time of notifying the defendant of possible future default. The
plaintiff requested; via a telephone conversation with a
representative at Wells Fargo, entrance into the Making
Your Home Affordable Program.
3. Plaintiff was told he qualified and received the paperwork
for the Making Home Affordable Program and submitted it. The
plaintiff was put on three trial payments of $1068.40. These trail
payments were to be for December 09 , January 2010 and February
4. Plaintiff made all of the required payments pursuant to
the program, on time.
5. At the end of the final month of February, the
Plaintiff began to call Wells Fargo, inquiring about when the
Modification would be completed. The defendant's representative
told the plaintiff that more time was needed to complete the
process. The Plaintiff was instructed to keep on making the
6. On or about March 24th , 2010, the plaintiff received a
telephone call from Jeri a representative from Wells Fargo. She told
him the "Loan Modification was moving forward and that the
income looked good and no further documentation was required."
She also told the plaintiff to continue with the trial
period payment of $1068.40 for the month of April 2010.
The plaintiff heard nothing and called back at the end of April.
The plaintiff was told that he was still being considered for the
Making Home Affordable modification ; "that all was left was a
drive by appraisal." Phone calls in May were made by the
plaintiff to Wells Fargo, with representatives telling him he was
still being considered for Making Home Affordable Modification.
7. On May 30, 2010 , Wells Fargo sent a letter of Default to the
Plaintiff, stating foreclosure proceedings would start on June 29,
2010. The plaintiff was told via telephone to disregard letter.
8. On June 3, 2010 , the plaintiff received a letter from the
Wells Fargo stating the plaintiff had been turned down
for the Making Home Affordable modification loan. The plaintiff
called Wells Fargo and asked when he was turned down, because
he had talked with a representative on June 4, 2010, who had told
him "all was well;" and the representative said the plaintiff was
turned down April 21, 2010.
9. During all of the phone calls made by the Plaintiff ,
representatives were asked by the plaintiff, about foreclosure and
the delinquent amount left over by enrolling into the program.
Each time the plaintiff was assured of no foreclosure and the
amount that was delinquent, would be put on the back of the loan.
10. The plaintiff complains, the defendants intentionally made
the Making Home Affordable process go on excessively; to inflate
the delinquent balance and then foreclose on the plaintiff's house to enrich themselves. The defendants knew that the Plaintiff did
not have the $12,000 plus dollars to keep the original loan. The
Plaintiff complains the defendants have used predatory and
misleading loan practices, to rid itself of the bad loan it made with
the plaintiff and foreclose on his house.
11. The Plaintiff complains the Defendants have unjustly
enriched themselves, by creating a "balloon" payment with all late
charges and interest charges, that became due upon turn down of
the modification. The plaintiff complains this was not disclosed to
him when entering the program.
12. The Plaintiff complains he has been misled and entrapped;
by the Defendants Wells Fargo and Freddie Mac, by
the deceptive and predatory Loan Modification Process. The
Defendants had no intention of approving a loan for the plaintiff,
even though the plaintiff was current with the modified payment.
The Plaintiff complains he was current on the loan with Wells
Fargo and that Wells Fargo knew that and kept the plaintiff in the
"hamster wheel process", for over six months, to inflate the
delinquent balance. The defendants knew the Plaintiff did not
have the past due amount available to redeem his home and
continued to put the plaintiff off, in an effort to make the
delinquent amount excessive; until it was impossible for the
plaintiff to come up with the balloon payment needed, to keep the
13. The plaintiff complains the defendants representatives
knowingly misled the plaintiff at the beginning of the process into
thinking he was approved as long as he made the payments
on time and sent the required documents in. The plaintiff did
everything he was told to do, but did not receive the modification
Loan. The plaintiff sent six payments, on time to the defendants.
14. The plaintiff complains he was entrapped ,by the false
advertising on the HAMP solicitation. Plaintiff' s exhibit A.
The plaintiff complains the Statement of eligibility on the
solicitation and on the Defendants websites are fraudulent and
Predatory and misleading. The plaintiff complains the Statement
"Helping you Stay in Your Home" put him into a sense of security;
that the defendants knew was false; is false advertising and
IN SUMMARY WITH MOTIONS
The plaintiff requested a Home Affordable Modification
Loan, from the defendant. The plaintiff was told he was qualified
by telephone on October 28, 2009. The plaintiff was current with
his payments at the time of request. The plaintiff was told as long
as he complied with making on time payments and submitting
required paperwork, that modification would become permanent in
30 to 90 days. (Referencing Freddie Mac solicitation, plaintiff's
Exhibit A.) The plaintiff made all payments on time pursuant to
the agreement, sent to him and dated October 28,2009. Plaintiff's
Exhibit B. The plaintiff was disapproved and then notified of
disapproval 42 days, after the fact. The plaintiff was told by
representatives of the defendants, that he was still being considered
for the Making Home Affordable loan, 40 days after he was turned
down. The defendants through it's representatives continued to
mislead the plaintiff ; that he was still being considered for the
Making Home Affordable Modification and that he was not going
to be foreclosed on. The defendants had the foreclosure planned in
advance of the disapproval for the Making Home Affordable
Modification. The defendants fraudulently reassured the plaintiff
he was not going to be foreclosed on and the delinquent amount
accrued, because of the trial program; would go on the back of the
loan, upon permanent Modification. The defendants have used
misleading and predatory tactics in it's dealings with the Plaintiff.
The defendants did not inform the plaintiff of disposition of the
Making Home Affordable Modification, within a reasonable time
frame. The defendants have fraudulently misled the plaintiff.
The defendants have created a "breach" of the verbal contract
made with the plaintiff on 28 ,October 2009. The Plaintiff in
"good faith", contacted the Defendants and fulfilled his part of the
agreement. The defendants have damaged the plaintiff's credit
rating, disrupted his life and have caused stress and anxiety to
come upon the plaintiff. The plaintiff has had to seek medical
attention for the stress. The defendants have used the making
Home Affordable Program to unjustly enrich themselves from the
plaintiff . The defendants have committed fraud on the plaintiff.
Defendants are helping the plaintiff out of his home, instead of
helping him stay in his home. Due to the defendants actions of
foreclosure, the plaintiff will never be able to buy a house , on
credit, in his lifetime. The defendant knew it made a bad loan to the
plaintiff in 2008. The loan was a no document loan.
Now the plaintiff is using the law to foreclose on the Plaintiff's
property, using the delinquent balance of $20,000.00, that has
inflated, since the Default Notice was sent to the plaintiff.
1. The plaintiff moves the court for an injunction against the
defendants, to cease the foreclosure process, on his home.
2. The plaintiff moves the court to order the defendants to
resume accepting the $1068.40 that was set as monthly payment by
the defendants on October 28, 2009, and honor the contract.
3. The plaintiff moves the court for the Discovery Process,
pursuant to rule 26. The plaintiff contends he brings just cause to
this court, for suit against the defendants. The defendants are
abusing a Federal program; designed to help people, for their own
gain. The plaintiff contends the Discovery Process will show the
court, a pattern of abuse of this program by the defendants.
4. The plaintiff moves the court to order the defendants to
supply the plaintiff with the original note of assignment and
current note of assignment documents on the property located at
4180W. 2475S. Ogden, Utah.
5. The Plaintiff moves the court for a punitive damage
judgment of Four Hundred Fifty Thousand Dollars,
($450,000),and or any other relief set by the Court, to be paid to
the plaintiff, by the defendants. The plaintiff has been held hostage by the defendants for almost a year. The process that was
supposed to last only 3 months, has caused the plaintiff stress and
anxiety. The defendants have caused depression to come upon the
Plaintiff. It has negatively affected the performance of the
plaintiff's business, which is the plaintiff's support for money to
pay his bills. The plaintiff is a mobile electronic servicer and the
work is very high tech. It requires much concentration and focus to
accomplish the work and it takes a cheerful person to win the jobs
from the public. The defendants have made the plaintiff feel
insecure and uncomfortable in his home, by sending agents to
observe and take pictures of the plaintiff's property. The
defendants foreclosure action has caused embarrassment to the
plaintiff. It has caused persons to call the plaintiff, at all hours
from all over the country to "short sale" his house.
6. The plaintiff moves the court to order the defendant to
delete the damaging foreclosure process from the plaintiff's credit
7. The plaintiff moves the court for the defendant to pay the
plaintiff's court costs.
Dated this _______ day of __________, 2010.
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.