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Court rules against mortgage lender in loan modification suit Atlanta, GA

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Court rules against mortgage lender in loan modification suit

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Recently, a court of appeals recently issued a landmark court ruling against a mortgage lender, finding that it did not keep its promise to negotiate a mortgage modification with a homeowner before issuing a foreclosure and selling the home at auction. The widely publicized case brought to light on some of the most underhanded tactics employed by lenders in dealing with homeowners, and may lead to the challenge and reversal of thousands of foreclosures in Georgia and throughout the country.

According to the lawsuit, a California woman took out an $845,000 adjustable rate mortgage with Option One Mortgage Corporation, which later assigned the loan to U.S. Bank. Two years later, the interest on the mortgage increased significantly, and the homeowner was no longer able to make her payments.

When the lender filed a notice of default on the home, the homeowner filed for Chapter 13 bankruptcy, which creates an automatic stay on foreclosure proceedings and allows a homeowner to keep their home. The lender fought back, filing a motion to lift the bankruptcy stay in order to see the foreclosure through. Then, the lender contacted the homeowner through her bankruptcy attorney and asked if she would be willing to “explore loss mitigation possibilities”. Seeking a loan modification, the homeowner contacted the lender, who responded that a modification was only possible if she would lift the stay imposed by the Chapter 13 bankruptcy filing.

The homeowner agreed, cancelling her bankruptcy filing altogether, in anticipation of what she believed to be a guaranteed loan modification. However, the lender took advantage of the homeowner’s lack of protection and foreclosed on her house, selling it at auction only a month after the stay was lifted.

After she lost her home, the homeowner filed suit against U.S. Bank. While the trial court found for the lender, an appeals court reversed, finding that the bank had not kept its promise to negotiate a loan modification with the homeowner, and that the subsequent foreclosure was improper and unfair.

Source: Forbes, “Judge Rules Against Bank In Mortgage Modification Suit“, Shah Gilani, 10 February 2011

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They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

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Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

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I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

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