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Family Sues Bank For Alleged Loan Modification Snub

SAN FERNANDO (CBS) — A Pacoima family is fighting to save their home with a lawsuit filed by Neighborhood Legal services.

The Velasco family said despite making a loan modification agreement with JP Morgan Chase to save their home — which they've owned for over 12 years — the bank plans to auction off the property.

As KNX 1070's John Brooks reports, the family is taking the bank to court to fight what they say are unjust mortgage lending practices.


"They are a graphic example of the bank's systematic refusal to modify, and the banks are not complying with the Home Affordable Modification Program," said lawyer Yvonne Jimenez.

Typically, banks take up to an average of about 300 days after sending a foreclosure notice before it can sell a home in an auction. During that time, most borrowers stop making mortgage payments.

However, the Velasco family said they remain current on their payments.

A class-action lawsuit that accuses Bank of America of reneging on promises to help borrowers modify their mortgage loans under the same federal program is already in the courts.

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