Loan modification requirements are two-way streets

In an unpublished opinion dated November 15, 2012 in Bonsu v Ocwen Loan Servicing, LLC, the Michigan Court of Appeals affirmed the Wayne Circuit Court’s order granting summary disposition in favor of the mortgagee.

Bonsu initiated this lawsuit after Ocwen foreclosed on his home. Bonsu alleged, among other things, that defendant breached a contract with him, made fraudulent misrepresentations to him, violated the Mortgage Brokers, Lenders and Servicer Licensing Act, MCL 445.1651 et seq., and failed to comply with statutory foreclosure requirements. The trial court, however, agreed with Ocwen that Ocwen did not breach its contract with Bonsu when Ocwen foreclosed Bonsu’s home based on admission Bonsu made during discovery and the evidence that it was Bonsu that failed to comply with the contract’s terms.

Bonsu claims that he entered into a Trial Period Plan (TPP) with Ocwen that Ocwen breached by foreclosing on the home. However, Ocwen established that Bonsu failed to satisfy the terms of the TPP by failing to get the co-borrower to sign an agreement, make all payments, or provide all documents requested. Ocwen extended the compliance time and Bonsu again failed to comply with the terms.

Bonsu also argued that Ocwen violated the federal Home Affordable Modification Program (HAMP). The Court reminded Bonsu that HAMP does not create a private right of action to enforce its regulations before concluding that even if it did, Bonsu was not eligible because he failed to satisfy the terms of the temporary agreement.

The court also dismissed Bonsu’s fraud claim and Mortgage Brokers, Lenders, and Servicers Licensing Act violation claim because Bonsu failed to plead them with particularity.

Finally, Bonsu contended Ocwen violated the now-repealed MCL 600.3205a by failing to provide notice of his right to request a meeting to discuss a loan modification. However, the notice of the foreclosure was sent in February 2009—four months before the July 5, 2009 effective date for MCL 600.3205a. Because the statute was not in effect at the time of the foreclosure notice, Ocwen was not required to comply with it.

Attorneys at the Gallagher Law Firm frequently represent parties with foreclosure disputes. Contact us today.

Categories: Case Summaries