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Homeowner sues lender, alleges it uses HAMP to lure customers

Why Realtors should know these lawsuits

In today’s economy, real estate professionals are being asked for help and guidance by struggling homeowners and agents should be aware of the changing scenery (and dangers), and know options for consumers in trouble. A Realtor’s value really shines through when they help a consumer when it isn’t about a commission. Consumers don’t forget that- can you say referral?

The old bait and switch

Homeowner Mary Gaudin of San Francisco has filed a lawsuit seeking class action status against Saxon Mortgage, a servicing division of Morgan Stanley. The suit claims that Saxon uses the Home Affordable Modification Program (HAMP) to lure customers into making “trial” payments on loans it doesn’t intend to permanently modify.

Gaudin has filed her allegations of the bait and switch in a Northern District of California federal court claiming Saxon has a pattern of misconduct by collecting trial payments, delaying the loan mod process and denying the application for “false reasons.”

A “bizarre pattern” by the lender

Gaudin alleges Saxon sent her a written agreement promising a permanent HAMP loan mod after her three trial payments were made (thus proving she could handle the new loan), urged her to continue making the trial payments after the first three, then in a letter, they denied her loan modification claiming she had not made the three payments while in the same letter showing a payment history documenting those very payments.

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Gaudin’s lawyer claims a “bizarre pattern of inaccurate and irresponsible behavior” by Saxon (Morgan Stanley). The suit alleges breach of contract, recission, for alleged violations of California’s Rosenthal Fair Debt Collection Practices Act and for alleged violations of California’s Unfair Competition Law.

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30 Comments

30 Comments

  1. Alessandro Machi

    April 10, 2011 at 1:31 am

    HAMP bait and switchers were also practicing parallel foreclosure. I believe the use of taxpayer funds to lure taxpayers into the accelerated loss of their home could be a Federal Hobbs act violation, the extortion clause. Intimidating citizens under the color of right.

    Well, using taxpayers funds to ACCELERATE the loss of ones home, AND to damage one’s credit ranking, and doing it under the color of right, sure seems like a federal hobbs act violation that should reach the white house and wall street.

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