The Appeals Court of Massachusetts recently issued an opinion in Wells Fargo Bank, N.A. v. Cook, 87 Mass.App.Ct. 382 (2015), evaluating whether the procedural and substantive requirements set out in the United States House and Urban Development (HUD) regulations were satisfied by Wells Fargo in a foreclosure case.
The homeowners in the case had refinanced their property in 2008 with a loan secured by a mortgage. Since the Federal Housing Administration had insured their mortgage, HUD regulations were incorporated into it. The HUD regulation at issue in the case restricted Wells Fargo’s right to accelerate the loan payments and foreclose on the house in the event of a default. Specifically, it provided that Wells Fargo must have a face-to-face interview with the homeowners, or attempt to do so, before three payments due on the mortgage go unpaid.
On August 12, 2008, Wells Fargo held an event at Gillette Stadium, providing hundreds of people with an opportunity to settle their mortgage disputes and negotiate loan modifications in a face-to-face interview. After missing three installments, the homeowners attended the event and met with a representative of Wells Fargo for 15 minutes. The homeowners testified that they attempted to cure the default by bringing a cash payment, but the representative would not accept it. The homeowners were instead told that they would receive a letter regarding the loan modification in the mail, which they did several days later, and they accepted the terms. However, after the homeowners made two payments under the new agreement, Wells Fargo rejected their third payment, declared the loan in default, accelerated the payments, and foreclosed. A lower court granted Wells Fargo’s eviction action in a summary judgment against the homeowners, which they appealed.
On appeal, the court agreed with the homeowners that summary judgment should not have been granted, due to issues of material fact regarding the face-to-face interview. In particular, questions remain as to whether the Wells Fargo representative conducting the interview actually had the authority to propose and accept reasonable payment plans, and whether the meeting involved any personalized consideration of the homeowners, as provided by the HUD Handbook. The case has now been remanded back to the lower court for findings of fact regarding these issues. Should the lower court find that Wells Fargo failed to meet the requirements provided by the HUD regulations, the foreclosure may be rendered void.
A knowledgeable attorney can help protect your interests when obtaining a mortgage, as well as explain your rights under an existing loan agreement when refinancing. The Massachusetts real estate attorneys at Pulgini & Norton offer experienced, client-oriented legal assistance in a variety of matters, including home closings, inspections, title insurance, and others. If you would like to discuss your real estate issue with one of our seasoned attorneys, schedule an initial consultation by calling (781) 843-2200 or contact us online.
More Blog Posts:
Massachusetts Attorney General Obtains Nearly $2 Million Judgment in Alleged Predatory Foreclosure Business Lawsuit, Massachusetts Real Estate Lawyer Blog, published April 15, 2015
Massachusetts Appeals Court Upholds Default Judgment in Real Estate Case, Massachusetts Real Estate Lawyer Blog, published April 8, 2015