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Can I Sue For Denial Of HAMP Loan Modification?

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  • William Matz | | 05 Sep 2012, 02:54 PM Agree 0
    As a 30-yr CA atty, I concur with the comments above. Wigod was a huge borrower victory. Before, more state and Federal court decisions held that borrowers had no private right of action, as they were not designated as third party beneficiaries of HAMP. But the Wigod court noted that if borrowers could not enforce HAMP, no one would. [Certainly, the lack of effective government enforcement has been all too obvious.]

    In two potentially more far-reaching cases, an OR appeals court and the WA Supreme Court have recently held that MERS mortgages cannot utilize non-judicial foreclosure (trustee sale) unless they record all transfers. If this becomes a trend in other states, borrowers will gain massive negotiating leverage due to the well-documented lack of ownership papers for the securitized mortgages. Maybe "show me the note" will finally become a reality, instead of the myth that has misled so many borrowers and attorneys.

    It is important to remember that evenif borrowers do have a right to sue after Wigod et al, borrowers must still pass a NPV test to get a mod. A legitimate negative NPV remains valid grounds for denial of a mod, such as is often the case when a borrower has lost his job.
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