Legal Question in Consumer Law in Massachusetts

Chase Bank offered us an in-house modification in August of 08. They said we need a "good faith" payment of $7,700. We scraped and made the payment and they approved us and reduced our payment by $1200/month. Before we could make the first payment, they said we were missing paperwork (subordination for our second) and said we had to apply all over again. Our second never heard of this and at our request contacted Chase, who would not give them the time of day. To make a long story short, we reapplied only to have our paperwork lost 7 times. Then the Obama plan came along and they said we had to enter that plan. They gave us trial payments on that plan that were $1200 higher than the in-house approval. We were late on our second payment and were told we had defaulted and not to make anymore payments by a supervisor. Now we are rejected because we didnt finish the payments and the computer says to liquidate the house.

We believe that the original in-house loan rejection constitutes fraud because they ( took our money under false pretenses)never returned our money and it appears that they never intended to approve us only wanted our money. We asked where that money was and would it be returned and we get no response.

Need some direction. My next step is William Galvins office.


Asked on 1/05/10, 3:29 pm

3 Answers from Attorneys
Jonas Jacobson Law Offices of Jonas Jacobson

I wish I could ask you a few questions. It seems like you want to keep the house. But how far underwater you are makes a difference. A short sale can sometimes be a better answer than a lot of payments that you may never really recover.

This situation is unfortunately all too common these days. There are laws here in Massachusetts designed to protect the victims of mortgage fraud scams.

The first thing I would do, were I in your situation, is to take all of my mortgage paperwork, and leave it with an attorney for a few days for an analysis. Because this is not the first credit crisis in history, there are laws that may have been violated at the closing by the lender. If an attorney could find a good case against the lender, you may have more leverage to promote a settlement/modification by the bank. Attorneys, of course, need to charge for a file review (particularly if the loan documents are voluminous).

Just so you have an idea, I would be looking for things like discrepancies in the financing, and the terms quoted for financing, as well as more obvious things, like a pre-payment penalty, an enormous interest rate, or an inability for Chase to prove ownership of the loan. I would also be interested to know whether the loan had closed more than three years ago.

These false modifications are all too common these days. And if you're dealing with it, try and get a signed writing from your lender that the foreclosure is canceled.

I would say that your next step should be to contact an attorney.

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Answered on 1/11/10, 6:44 pm
Joseph Murray Joseph M. Murray, Esq.

Retain an attorney to review this to determine if in fact Chace violated your rights as consumers. Good Luck!

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Answered on 1/11/10, 7:16 pm
Dmitry Lev The Lev Law Firm

The bank is not obligated to modify your loan or to reduce your payments. They have the right to hold you to the original contract and then collect and late/missed payments with late fees, legal fees, and interest. I guess I am unclear why you are seeking for them to return money that you owed them to begin with. That said, bankruptcy laws "override" contract laws and you may be able to obtain some relief through the bankruptcy courts. Feel free to contact me for additional information.

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Answered on 1/12/10, 6:35 am


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