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Were you denied a HAMP mortgage refi loan by Bank of America?

The housing bubble caused an enormous ripple affect across the country, and some people are still feeling the effects. In an effort to fight back against big banks, some Americans have taken to their cases to the judicial system. Despite initial failures in lower courts, some consumers are seeing positive success when they refuse to back down, taking their cases to higher courts.

Take Montana residents Abraham and Betty Morrow, for example. In 2009, a seemingly standard conversation between Mr. Morrow and a representative at Bank of America initiated a series of events, which ultimately led to the foreclosure of the couple's home. After five years of fighting, including visits to their district and state supreme courts, the Morrows have become examples for successful litigation against intentionally wrongful loan servicing behavior in big banks.

Background

The Morrows, South Carolina business owners, moved to Montana in 2003, where they built their dream home in the foothills of the Big Belt Mountains. In 2009, the couple was forced to go back to South Carolina after the person who purchased their businesses began defaulting on payments. According to Morrow, the value of their businesses was reduced from $1 million to $150,000. Because the couple owned the building in which the businesses were located, walking away wasn't an options, so they spent most of their time living in an RV while they ran their businesses and looked for someone else to purchase them. Their possessions remained in their Montana home.

In 2012, the couple returned to their Montana home full-time.

Bank of America's Entry onto the Scene

The Morrows' initial mortgage was with Quicken Loans, but the loan was sold to Countrywide Home Loans Servicing somewhere down the line. Bank of America later acquired Countrywide in a merger, which is how the couple ended up as Bank of America customers. This is also the reason all three banks were named in the couple's lawsuit.

The Premise & Timeline

It all started when the Morrows were hoping to reduce their $2,301 monthly mortgage payments. The conversations with Bank of America began in May 2009. At this point, the couple says they had never missed a payment or been late.

In October 2009, the couple was told they should intentionally miss a payment if they wanted to become eligible for a loan modification.

On December 8, 2009. Mr. Morrow made a call to Bank of America, where he spoke with a representative named Brian who told him that he would be eligible for a permanent loan modification if the couple successfully made their reduced trial payments of $1,240 for three or four months. As it turns out, "Brian" is actually Sunil Kumar of Hyderabad, India. According to the Kumar, using American names is common practice. Although this was just the tip of the iceberg in terms of the bank's deception, Bank of America would later try to use Mr. Morrow's "inaccurate" records in their defense, stating he had spoken with Kumar, not "Brian."

Just two months after making their first trial payment, the couple began receiving notices of default. Upon calling the bank, the couple says they were informed to ignore the letters and continue making their reduced payments. The pattern continued, and the couple continued to receive default notices, invitations to participate in the loan modification in which they were already enrolled, and instructions to ignore the warnings.

The Courts

In October 2010, the Morrows began an official complaint process with the Office of the Comptroller of the Currency. In March 2011, the couple was advised their loan modification had been denied because their primary residence is South Carolina, not the Montana home in question. This information had never been disclosed to the couple previously.

On May 6, 2011, the couple filed their suit in the Lewis and Clark County District Court in Helena. On April 3, 2013, just before the case was set to go to trial, a judge granted summary judgment to the bank, citing that an oral agreement was not enforceable because the modification agreement needed to be in writing. The judge also said the bank was not negligent, because it did not owe them a legal duty, as it was not their financial advisor.

On May 7, 2014, the Montana Supreme Court overturned the district court's decision, citing the bank's obligation to process the couple's application promptly and provide its consumers with accurate information. The high court overturned the ruling regarding oral versus written agreements, citing that written contracts are intended to prevent fraud, not be used as a defense against alleged commitment of fraud. The high court also reversed the earlier ruling in regard to the couple's claims of violation against the Montana Consumer Protection Act, citing the couple's application for Home Affordable Modification Act (HAMP) took 7 months longer than the standard processing time should take.

The Numbers

The Montana Legal Services Association filed a brief in support of the couple upon their appeal to the high court, stating they represented numerous clients who had experienced the same wrongful acts when it came to servicing their loans.

MLSA noted 168 calls between June 1, 2012 and the time the brief was filed regarding loan servicing and foreclosure, 52 of which were complaints about Bank of America, and eight of which were reportedly told by the bank's representatives to miss a payment or stop paying all together. Many also reported being forced to apply for modifications multiple times as a result of the bank's misplacement of their applications.

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