ConsumerWatch: Homeowners Sue Banks Over Loan Modifications
SAN FRANCISCO (CBS 5) -- There is a new movement to force banks to make good on their promises to help struggling homeowners. Homeowners across California who've been denied permanent loan modifications are now suing banks, claiming the lenders are violating a provision of the Obama administration's Making Home Affordable plan.
San Francisco attorney Whitney Huston has sued Chase on behalf of a Hayward family. After the family successfully completed a three-month trial modification, Chase refused to offer the family a permanent deal to lower their mortgage payments, said Huston.
Huston contends that's a violation of a part of the "Trial Period Plan," or TPP, a signed agreement which is provision of the Home Affordable Mortgage Program (HAMP) - one of the programs that make up Making Home Affordable plan.
"It promised borrowers that if they made their payments on time for three months under this plan, it would provide them with a permanent modification," said Huston.
Chase isn't commenting on the suit, but Huston said the bank has countered her claim by saying the TPP isn't a binding agreement.
Banks benefit by offering the temporary modifications, said Huston. "They get to advertise their compliance with the program and they get to charge additional fees each month that (customers) are in the temporary modification."
Website: makinghomeaffordable.gov
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