Another win for the little guy!!
Maybe the average guy is finally getting a break. Or maybe the courts have just decided that there must be some limits on the incredible greed and lust for money by the big banks.
In any case, following a decision from the Ninth Circuit Court of Appeals, the rules as well as the mood for these banks appear to have changed.
In the companion cases of Corvello v. Wells Fargo Bank NA, 11-16234 and Lucia v. Wells Fargo Bank NA, 11-16242, U.S. Court of Appeals for the Ninth Circuit, the court effectively put an end to the cute games the banks like to play.
At issue in these cases were the terms and conditions of a Trial Period Plan extended by Wells Fargo pursuant to the Home Affordable Modification Program.
If you will recall this is was program enacted by the government in 2009 to help people that were underwater on their mortgages, keep their homes. The idea was to modify the mortgages. This was part of the troubled TARP program and of course, the banks received a financial incentive, courtesy of the U.S. taxpayers for making such modifications.
The modification incentive, and the benefits of receiving loan payments instead of having to foreclose however, were simply not good enough for Wells Fargo. They had to play games with the process.
The loan modification required an application process on the part of the homeowner after which, if they qualified, they were offered a mortgage modification if they complied with a trial payment plan.
The homeowners in both of the case completed the application process and were offered a modification. They had to participate in a trial payment program to establish that they could indeed make the payments provided in the modified mortgage.
Wells Fargo though tried to throw a curve into the mix. They insisted on keeping everything in their favor. How? By specifying that they were not under any obligation to modify the mortgage until the agreement was not only signed by the homeowner (which it was) but also signed by Wells Fargo and a signed copy sent to the homeowner.
Get the picture? All Wells Fargo had to do was to “forget” or “overlook” sending a signed copy to the homeowner and they were technically off the hook.
Thankfully the court cut through that silliness. With a sharply worded opinion the court let Wells Fargo know in no uncertain terms that once the homeowner made the payments that Wells Fargo specified, and signed the agreement, there was a deal, whether Wells Fargo ever got around to signing it or not.
Maybe not on the level of the Boston Tea Party, but still a pretty good outcome for homeowners!!
If you’re interested in reading the cases, or have any questions, shoot us an email – firstname.lastname@example.org