There are a number of reasons that people fall into foreclosure, but following the directions given to you by your servicers should never be one of them. However, that’s exactly what happened to Bethanne Wasko.
Bethanne had always made the payments on the adjustable-rate mortgage she had through JP Morgan Chase on her home in Poland, Ohio, until she sought a loan modification and was told by Chase that she would need to stop making payments in order to be eligible. Bethanne did as she was told, but instead of offering her the modification she sought, the bank filed for foreclosure.
“In this case Chase did exactly the opposite of what Congress and The Consumer Finance Protection Bureau directed Loan Servicers to do” said Marc Dann, the Managing Partner of the Dann Law Firm and a former Ohio Attorney General.
The Dann Law Firm successfully defended Bethanne against this action. Both parties agreed that the foreclosure would be dismissed and Bethanne was instructed to submit a loan modification application. Again, Bethanne followed directions. She submitted a complete loss mitigation application on March 26, 2014.
Chase never responded. Instead, Chase refiled for foreclosure on June 5, 2014.
The Dann Law Firm is alleging that Chase is in violation of new Frank-Dodd Wall Street Reform and Consumer Protections Act, the Real Estate Settlement Procedures Act and the Truth in Lending Act and is pursuing one of the first actions in Ohio citing these recent reforms.
Under the new regulations, a servicer cannot file for foreclosure when a modification application has been filed. Furthermore, the servicer is required to promptly review any modification filed 45 days or more before a foreclosure sale and notify the borrower if the application is complete within five days of the filing. Finally, a servicer that has received a loan modification application is required to evaluate the borrower for all mitigation options and provide written notice of which options the borrower may be eligible to receive.
In Bethanne’s case, after filing for foreclosure against her, Chase twice asked for more time to review the loan modification application. Both those extension deadlines have passed. Chase has neither responded to her loan modification request nor dismissed the new foreclosure filing against her.
“For anyone that questioned the necessity for these new, more stringent regulations of the mortgage industry, Bethanne’s case is a prime example of why they are necessary,” said Dann. “We are now looking to the court to uphold these new regulations and protects Bethanne and countless of other homeowners like her.”