Banks Failing To Honor Agreed-Upon Home Loan Modifications

Home Loan Modifications

Enumclaw resident Adella King was worried she was going to lose everything recently. King said she'd owned her home for 20 years, and it was foreclosed on after the bank denied she was permitted a modification.

According to King, Bank of America approved her for a loan modification in 2013 to reduce her monthly payment after her husband died. However, King said, BoA said her mortgage loan to Green Tree Loan Servicing.

King said Green Tree told her they got all the documents, but there was no mention of an approved loan modification.
Although King and Green Tree were in negotiations, she came home only to discover a note on the front door saying it was being foreclosed on. She said they never told her the home was in foreclosure of that the loan was in default. King said she was paying, and then they sold her house at an auction.

And, her situation isn’t unheard of.

Last year, Green Tree, currently known as Ditech, was investigated by federal investigators on complaints that they failed to honor the agreements of loan modifications between a consumer and the prior loan company.

While Green Tree did not admit to doing anything wrong, they were ordered to pay $63 million in fines.

Despite this settlement, King said she hired a lawyer to have her case heard in court.

Ha Dao, King’s attorney, said she’s known of similar cases filed in Washington state. She said these folks have not benefited from Green Tree’s promises of change it agreed to with the federal investigators.

Dao said federal regulators know it’s happening, trying to do something about it and people are still struggling. She said, in January 2013, BoA sold about 650,000 home loan servicing rights to Green Tree. Dao feels that are many homeowners who are dealing with the same problem as King, but no money to hire an attorney to fight the problem.

The lawsuit has named both Bank of America and Green Tree as defendants.

While Green Tree wouldn’t make a comment about the litigation, BoA spokesperson Rick Simon said King had no loan modification in place before her loan was sold to Green Tree. He said the modification was canceled before the transfer took place, but declined to say why the modification was canceled, citing “privacy concerns.

Green Tree notes King is now $55,000 behind in her mortgage payments.

King is still living in the home while the case is being heard in a Seattle federal court.

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