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RCS's Post-Trial Motions Denied in Hammer v. Residential Credit Solutions, Inc.


In our previous blog, we reported that national mortgage loan servicer Residential Credit Solutions (RCS) was ordered to pay punitive damages totaling $1.6 million in a case brought by Alena Hammer, an Illinois resident who endured unnecessary and harassing foreclosure actions over a period of three-and-a-half years. Last week, on December 3, 2015, RCS’s post-trial motions for judgment came before the United States District Court’s Eastern Division. In a memorandum opinion and order penned by District Judge Thomas M. Durkin, he explains why RCS’s motions as a matter of law, a new trial, and remittitur have been denied.

As a reminder, the facts of the case are as follows:

  • 63-year-old Alena Hammer began having mortgage troubles in 2009. Her mortgage servicer, AmTrust Bank, initiated foreclosure proceedings, but they were stayed after the FDIC took over as receiver for AmTrust. The FDIC then worked with Hammer to avoid foreclosure by restructuring her payments. What they did not initially tell her was that they had charged her more than $2,300 in fees, which added to the loan’s principal balance and subsequently increased her monthly payments.
  • After making her first two payments, Hammer was notified that the loan was being transferred to RCS. She soon after made a Loan Modification Agreement with the FDIC, which decreased the amount owed by the FDIC’s added fees. However, RCS did not recognize the agreement as valid, informing Hammer that she would need to sign yet another agreement with them. She refused and continued mailing her payments to RCS on time and in full based on the agreement she had made with the FDIC. RCS returned each check uncashed, demanding that she pay an additional $300+ more per month based on the terms of her original AmTrust loan. They then initiated foreclosure proceedings.
  • After retaining the services of attorneys at Atlas Consumer Law, who were successful in getting the motion dismissed, Hammer and RCS still could not reach a resolution. She then filed a lawsuit against the collector.

Durkin decided that none of the arguments advanced by RCS were sufficient to support reducing the amount of compensation they owe Hammer, nor to support tossing out the verdict. Although Hammer never physically signed the loan modification made with the FDIC, Durkin agreed that repeated communications between the two parties was enough to acknowledge the agreement’s validity. According to Durkin, RCS’s arguments to the contrary, “overlook the nature of contracts and the governing principles of contract law.” He also chastised RCS for deliberately misstating the reasons for Hammer’s lawsuit against them, saying that RCS chose to employ a tactical decision to stand on technicalities related to the formation of the contract rather than acknowledge evidence of the loan modification agreement made before they purchased Hammer’s debt from the FDIC.

This is a significant victory not just for Ms. Hammer and Atlas Consumer Law, but for all people who pay a mortgage. This decision shows that mortgage servicers who engage in shady and unethical practices will be held accountable for their misdeeds.

View the Complete Court Order

If you are facing wrongful foreclosure actions, contact a Chicago foreclosure defense attorney at Atlas Consumer Law to consult with our attorneys.