WACHOVIA vs POSTI: Judge’s Loan Modification Order Sends Bank Scrambling
“We’ve always viewed it as a government-issued license for the mortgage servicer to steal a few more payments before it takes the home”
Judge’s loan modification order sends bank scrambling
A Palm Beach County judge’s order requiring a bank to modify a homeowner’s mortgage instead of foreclosing has lender lawyers scrambling for a do-over and defense attorneys at attention.
The order, signed by Judge Howard Harrison last month in a Royal Palm Beach foreclosure case, specifies payment amounts, a fixed 3.15 percent interest rate for 40 years, and requires the bank to mitigate damage done to the homeowner’s credit — details foreclosure defense attorneys said they have never before seen in a ruling.
In fact, several said they were surprised and intrigued by the unusual order, which attempts to enforce a trial loan modification the homeowner received in 2009 but which may ultimately overstep the judge’s legal authority.
“It seemed like the bank was trying to get payments out of the homeowner but never really had any intention of modifying the loan,” said attorney Jeff Harrington, who is defending homeowner Paul Posti. “Our argument is, if you look at it closely, it’s a binding contract.”
The bank has asked for a rehearing in a 64-page request that includes the assertion that a trial loan modification is not an enforceable contract.
“We disagree with the ruling in this case for a number of reasons, including that compliance with the decision would require us to violate several federal laws and it imposes a modification with terms that were never agreed to by the Bank,” Wells Fargo said in a statement Wednesday.
Rest from The Palm Beach Post here…
Copies of the order and motion below…