What to do if our lender misinformed us regarding a mortgage modification program?

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What to do if our lender misinformed us regarding a mortgage modification program?

We applied for HAMP mortgage assistance with our home lender. They sent us the forms to fill which we did. After they received them, they told us that we were in the 3-month trial period and accordingly gave us a new reduced payment. We paid our new our payment it on time in January and February, but then they sent us the new forms to fill out (identical to the last ones) and said that we were in the forbearance program. When we called to confirmed all of this, we were told that they do not participate in HAMP.  We told them that an employee with them told us otherwise, plus they sent us HAMP forms previously (all have makinghomesaffordable.gov on them). They couldn’t answer why they sentus HAMP forms if they don’t participate (or why they even have those forms in the first place). We want to take them to small claims for the amount we paid them during those 2 months (approximately $3600); we were going to start the short sale process which we postponed it because our lender told us we qualify for HAMP. Do you think we have a chance in small claims court?  Are there other legal options to pursue? Should we speak to a real estate attorney? In Queens, NY.

Asked on February 21, 2011 under Real Estate Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

In theory, you could sue them in court, including in small claims court, for any losses you incurred or costs you paid owing to bank negligence (e.g. giving you misinformation). In practice, it may be difficult in a case like this to show that you suffered a "loss." By your own admission, it was a reduced payment. It was also something you chose to participate in--e.g. when told you were a HAMP program, you signed up for it, made the monthly payments, etc. If you were being given reduced payments (less than you were making previously) and you voluntarily chose to participate in the program, where exactly was the loss or injury; you seem to have been in better shape for those 3 months than you had been, and it seems as if you would have continued in the HAMP program if you could have. Without a loss, there is nothing to sue for.


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