Links
Lawsuit highlights troubles with governments loan-modification program
A crop of federal lawsuits are moving forward alleging Bank of America was unfair to homeowners who sought assistance through the government's main loan modification program.
In a little-noticed decision earlier this month, a federal judicial panel rolled together several class action lawsuits from U.S. district courts across the country and assigned them to a federal judge in Massachusetts, who will decide whether to dismiss the suits, or allow them to proceed.
The decisions she makes could affect more than 100,000 homeowners, and further highlights questions about the performance of the government's Making Home Affordable program, also called HAMP.
Under the program, banks and other companies that service mortgages are paid by the government for each loan they modify. Homeowners are generally placed in trial periods meant to last three months–but which often drag on much longer. During the trial period, homeowners pay the reduced amount they would be paying with a permanent modification. The trial is a chance for homeowners, many of whom are suffering serious financial hardship, to show they can afford to keep their homes under modified terms.