Resnick Law, P.C.

1 (888) 724-4071

Free Phone Consultation

Call: (248) 642-5400

Menu
  • Home
  • Our Firm
    • Firm Overview
    • Attorneys
      • H. Nathan Resnick
    • Attorney Referrals
    • Views & News
    • Events
    • Careers
    • Close
  • Our Clients
    • Who We Represent
    • Results
    • Testimonials
    • Close
  • Practice Areas
      • Appeals
      • Asset Protection
      • Bankruptcy
        • Chapter 7 Bankruptcy
        • Chapter 9 Bankruptcy
        • Chapter 11 Bankruptcy
        • Chapter 13 Bankruptcy
        • Garnishment
        • Solutions Without Bankruptcy®
      • Business Law
      • Construction Law
      • Contracts
      • Corporate Litigation
      • Creditor Rights
      • Debt Relief Laws
      • Estate Planning
      • Foreclosure
      • Guardianship & Conservatorship
      • Liability of Electronic Communications
      • Property Tax Appeals
      • Real Estate & Zoning
      • Receivership
      • Short Sales
      • Trust & Probate Administration
    • Close
  • FAQ
    • Michigan Bankruptcy Laws
      • Chapter 7 Bankruptcy
      • Chapter 9 Bankruptcy
      • Chapter 13 Bankruptcy
    • Estate & Probate
      • Estate Planning Basics
      • Will and Trusts
      • Death and Taxes
      • Probate Law Questions
      • Other Assets and Tools
      • Changing Your Wills, Estates & Trusts
    • What is a Garnishment?
    • Close
  • Blog
  • Resources
    • Videos
    • Close
  • Contact
    • Close

Deceptive Mortgage Servicers Held to Account

November 2, 2016

resnick_blog-15_id-artA federal judge in New Jersey recently denied a motion seeking to dismiss a homeowner’s breach of contract claim after the mortgage holder failed to grant a mortgage modification despite the homeowner having fulfilled the requirements of a trial modification agreement, according to news reports.

The breach of contract claim was denied after U.S. District Judge Freda Wolfson found the elements of breach of contract were fulfilled by the plaintiff’s successful completion of the trial modification agreement and the defendants’ subsequent refusal to modify terms of the mortgage.

The Nov. 1, 2016 ruling in Block v. Seneca Mortgage Servicing, which was designated for publication, could put the lid on a common practice in the mortgage industry, according to plaintiff’s attorney Joshua Denbeaux: a homeowner complies with the requirements of a trial modification agreement, also known as a trial payment plan, only to see the mortgage company refuse to modify the mortgage terms.

The facts of the case, according to The New Jersey Law Journal, include that the homeowner, who defaulted on a $580,000 loan, was named in a foreclosure action in January 2013. In May 2014, she reached an agreement with Seneca Mortgage Servicing that would lower her monthly payment if she made a deposit and six monthly payments on time.

By all accounts, the homeowner completed her obligations under the agreement by November 2014, but the next month her loan was sold and the servicing of the loan was transferred to another mortgage servicer, Ocwen Loan Servicing.

Ocwen initially refused to provide a modification but said it would reconsider if the homeowner provided proof of compliance with the previous mortgage servicer’s trial modification agreement. However, according to the homeowner, Ocwen failed to credit $32,543 in trial modification payments loan balance, she claims.

Ocwen never followed through and in March 2015 a third servicer took over managing the mortgage. That company, Fay Servicing, refused the homeowner’s request for a loan modification, but provided a new trial modification agreement requiring a down payment and six monthly payments.

Block filed suit against all three servicers as well as the mortgage holder, ARLP Securitization Trust, Series 2015-1 in January of this year. She raised breach of contract claims and also raised claims under the Fair Debt Collection Practices Act, Real Estate Settlement Procedures Act and a New Jersey state law protecting consumers against fraud. The defendants moved to dismiss all four counts.

The motion to dismiss FDCPA claims against Ocwen were granted in part and denied in part, according to court documents: Motions to dismiss RESPA and FDCPA claims against Fay were granted, but the judge denied the motion to dismiss the Consumer Fraud Act claim against Seneca.

In refusing to dismiss the breach of contract claims, the judge found the plaintiff properly alleged a contract between the parties, a breach of the contract, damages flowing from the breach and that the party stating the claim performed its own contractual obligations. She rejected the defendants’ argument that the Seneca trial modification agreement is a valid contract due to lack of proper consideration by the plaintiff.

“There are tens of thousands of people in this situation. The district courts throughout the country have gone in different directions on this issue,” attorneys for the plaintiff told The New Jersey Law Journal. “We laid out all the facts and [Wolfson] had a full record in front of her for the first time anywhere in the country as to what happens with this trial modification nonsense.”

Filed Under: mortgage modification Tagged With: Block v. Seneca Mortgage Servicing, FDCPA, RESPA, U.S. District Judge Freda Wolfson

Have Questions? Need Legal Guidance?

Have your case reviewed by a Resnick Law attorney today!

Get Started Now

Do You Have a Claim?

Call (248) 642-5400

Free Phone Consultations
Same Day Response

Practice Areas

Our Firm Is Your Solution For:

  • Asset Protection
  • Bankruptcy
  • Business Law
  • Testimonials
  • Appeals
  • Chapter 7 Bankruptcy
  • Chapter 9 Bankruptcy
  • Chapter 11 Bankruptcy
  • Chapter 13 Bankruptcy
  • Construction Law
  • Contracts
  • Corporate and Commercial Litigation
  • Creditor Rights
  • Debt Relief Laws
  • Estate Planning
  • Foreclosure
  • Guardianship & Conservatorship
  • Liability of Electronic Communications
  • Property Tax Appeals
  • Real Estate & Zoning
  • Receivership
  • Short Sales
  • Solutions Without Bankruptcy®
  • Trust & Probate Administration

Office Locations

  • Bloomfield Hills – (248) 642-5400
    40900 Woodward Avenue, #111
    Bloomfield Hills, MI 48304

Stay in touch

Sign up to get interesting news and updates delivered to your inbox.

Our firm’s practice areas include:

  • Appeals
  • Asset Protection
  • Bankruptcy
  • Business Law
  • Chapter 7 Bankruptcy
  • Chapter 9 Bankruptcy
  • Chapter 13 Bankruptcy
  • Construction Law
  • Contracts
  • Corporate & Commercial Litigation
  • Creditor Rights
  • Debt Relief Laws
  • Estate Planning
  • Foreclosure
  • Guardianship & Conservatorship
  • Liability of Electronics
  • Property Tax Appeals

 

  • Real Estate & Zoning
  • Receivership
  • Short Sales
  • Solutions Without Bankruptcy®
  • Trust & Probate Administration

 

Martindale-Hubbell
dbusiness
Resnick Law Peer Review Rated

Recent Posts

  • Struggling With Tax Debt in Michigan? Your Guide to the IRS Fresh Start Program
  • Successfully Addressing Diversity in a Post-Pandemic Workplace
  • ESG Disclosure Simplification Act Passed by House
  • Business Debt and Partnerships: What You Need to Know to Protect Yourself
  • Mergers and Acquisitions During the COVID-19 Pandemic

Office Locations

  • Bloomfield Hills – (248) 642-5400
    40900 Woodward Avenue, #111
    Bloomfield Hills, MI 48304

Connect With Us

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

Get Help Now

Contact Us

Copyright © 2023 Resnick Law, P.C. All rights reserved · Disclaimer · Privacy Policy

Attorneys at Resnick Law, P.C. serve clients in Bloomfield Hills, Metro Detroit, the Tri-County Area and throughout southeast Michigan, including: Oakland County, Wayne County, Macomb County, Livingston County, Genesee County, Washtenaw County, Lapeer County, St. Clair County, Birmingham, Rochester Hills, Rochester, West Bloomfield, Bloomfield Township, Novi, Royal Oak, St. Clair Shores, Grosse Pointe, Walled Lake, Ferndale, Berkley, Sterling Heights, Clarkston, Farmington Hills, Ann Arbor, Howell, Brighton, Mount Clemens, Flint, Grand Blanc, Livonia, Dearborn, Troy, Plymouth, Pontiac, Northville, Southfield, Warren and Utica.

All materials and content in this Blog are provided for informational purposes only. Information contained in this Blog does not create an attorney-client relationship with Resnick Law, P.C. and any recipient of this Blog. The contents of this Blog, in whole and in part, are not to be construed as a legal opinion or legal advice. All materials and content in this Blog are provided for informational purposes only. Persons viewing information contained in this Blog should not act upon such information without first seeking appropriate and specific legal or professional consultation. Please contact an attorney at our office to obtain legal advice specific to your needs.

Viewing of this website does not create an attorney/client relationship with Resnick Law, P.C. All materials and content on this website are provided for informational purposes only. These informational materials are not intended to constitute legal advice and should not be construed as such, because each person’s legal matters are unique and results will vary. The contents of this website do not reflect current legal developments, verdicts, settlements or specific client endorsements. Persons viewing information contained in this website should not act upon such information without first seeking appropriate and specific legal or professional advice. Please contact an attorney at our office to obtain legal advice specific to your needs.