Lawsuit Filed to Shake-Up Loan Modification Limbo

February 25, 2010

We’ve heard it all before. Federal programs, banks and lenders promising to help homeowners facing foreclosure. All too often what we see as a result is a disgrace.  The lenders lead desperate homeowners down a path of hope, only to cold cock them with the reality that, “NO, we won’t give you a loan modification, after all.”  Of course, the denial comes many months after the homeowner has dutifully paid thousands of dollars in reduced monthly payments during a “trial modification.”  The process of trying to get a lender to work with a homeowner has turned into torture for far too many individuals who don’t want to lose their homes.

A glimmer of hope for consumers comes in the form of a couple of class action lawsuits filed by a Boston area law firm.  It may finally shake things up a bit.  Two lawsuits were filed this week in US District Court in Boston, which claim Wells Fargo and Bank of America have not followed federal rules for mortgage loan modifications, leaving some homeowners stuck in foreclosure “limbo.”  Click here to read more about the suits in the Boston Globe.