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Case Law Update: RESPA Claim Dismissal Denied


foreclosure signIn a new case, a plaintiff alleged that two defendants violated regulations set forth by the Real Estate Settlement Procedures Act.

The lawsuit involves a plaintiff who from 2005 onward lived in a New Jersey residence. In 2012, the plaintiff was allegedly unable to make mortgage payments, defaulting in March of that year. The defendant offered a loan modification with the stipulation that the plaintiff must make the initial payment or sign the offer by a specific date.

The plaintiff declined to agree to the agreement because the amount requested was beyond the plaintiff’s ability to pay. Later in the year, the plaintiff requested a loan modification, providing information to the defendant including a Uniform Borrower Assistance Form. In January of 2015, the plaintiff was informed that the home was scheduled for a sale. The plaintiff claimed that the defendant did not reject or deny the loan modification request and they were reviewing the request despite the pending sale.

A law firm informed the plaintiff on February 13, 2015 that the home was scheduled for sale on February 27, 2015. Prior to the date, the plaintiff provided further information regarding the loan modification and a day before the schedule sale, the law firm informed the plaintiff that it would be postponed until March 27, 2015. Again, the plaintiff provided a Uniform Borrower Assistance Form, and on April 3, 2015, the plaintiff’s loan modification request was denied.

The plaintiff alleges violations of RESPA, stating that the defendant’s actions culminated in the sale of the residence despite prohibited foreclosure and / or sale, and that the failure to pursue loss mitigation options was prohibited against the sale and / or foreclosure under 12 C.F.R. 1024.41(g), 12 U.S.C. § 2605(f).

Earlier this year, the court declined the request for dismissal of the plaintiff’s RESPA claim.

Our Chicago foreclosure attorneys at Atlas Consumer Law understand RESPA and what protections consumers have. To learn if you have a potential lawsuit, we encourage you to contact our team today.