Over the years, we’ve seen many homeowners who were offered a “Trial Period Plan” (TPP) by their bank, then made all the payments required under the plan, only to be rejected for the permanent loan modification promised them under the TPP. Along with variety of other defenses, we have used this species of fraud effectively to fight back against foreclosure-driven banks, convincing them to grant homeowners mortgage relief, keeping families in their homes. In fact, this type of fraud is a form of a “false HAMP denial,” an issue dealt with in last week’s article titled, “Have You Been Blitzed?”
Although the TPP scheme has been regularly used by a number of the Wall Street Banks, the Nation’s largest loan servicer, Bank of America, appears to be the first to be caught with its fingers in the cookie jar, and may be on the verge of paying a very dear price for its transgressions. BOA is now the target defendant in a Massachusetts class action lawsuit filed by residents of seven or eight states victimized by the TPP scheme. The lawsuit has already survived BOA’s effort to have it dismissed, and is scheduled for hearing on whether it can proceed forward as a class action. Because the facts are specifically defined and the legal issues narrowly drawn, our prediction is that the case will be class-certified.
We have a number of clients, including Joan, with unresolved foreclosure cases who are TPP scheme victims. Joan entered into a TPP with BOA in 2010. The TPP was very specific in its terms, stating:
“If I am in compliance with this Trial Period Plan, then the Servicer (BOA) will provide me with a Home Affordable Modification Agreement.”
In other words, the TPP expressly stated that BOA was required to offer Joan a permanent loan modification with much better loan terms than she had previously if she made the required trial period payment of $460 per month for three months. However, like so many others before her, her bank refused to give Joan the permanent loan modification after she completed her end of the bargain.
Should the Massachusetts lawsuit be allowed to move forward as a class action, we will be talking with Joan and our other TPP victims as to whether they want to follow a similar path. In any event, every homeowner with ongoing mortgage issues who, like Joan and the Massachusetts class action plaintiffs, were promised permanent mortgage relief upon making payments under a temporary plan, only to be denied that relief after making the payments, should be aware of his or her important rights against the bank. Those rights may include forcing the bank to live up to its promise, as well as receiving damages, paid in the form of an even better deal than was originally offered. Are you a victim of the TPP scheme?