A recent decision issued by the Third District Court of Appeal is one that all homeowners should be aware of. Lentz v. Community Bank of Florida, Inc. sets the precedent for loan modification enforcement in cases to come, something which truly serves in the best interest of all parties involved.
In 2011, after the homeowners defaulted on the loan they had with Community Bank of Florida, Inc., the underwent mediation to work out a loan modification agreement. The terms of the loan modification were written out in exact terms at the mediation and both parties signed the agreement. According to the agreement, the Borrowers had to pay $52,000 to bring the loan current. If the Borrowers could not qualify for the proposed modification, the amount would be returned to the homeowners. Needless to say, this isn’t what took place.
Instead, The bank failed to prepare the documents for the loan modification within the 45 day limit provided for in the agreement from the mediation. The bank then kept the $52,000.00 the Borrowers initially paid and proceeded to send the homeowners a commitment letter for a new loan, one that required them to pay an additional $19,983 up front. The debtors refused to sign, and the trial court subsequently sided with the bank, and entered a foreclosure judgment in its favor.
The homeowners then appealed the trial court’s decision to the Third District Court of Appeal and the court sided with the homeowners. Specifically, the 3rd DCA said that the loan modification settlement agreement signed at the mediation was clear and unambiguous and that by requiring the additional $19,983 Community Bank breached the settlement agreement. Therefore, either Community Bank must repay the $52,000 or provide the agreed upon loan modification.
What the Decision Means
To an average person, the appellate court’s decision seems obvious- Community Bank made a loan modification agreement and should be held to it. But, previously decided cases have not been as kind to homeowners. In fact, other courts have allowed lenders to keep months of trial period payments made by homeowners who were promised modifications which never happened and eventually lost their homes. This case represents a significant shift in the court’s treatment of the loan modification process
If you’re seeking a loan modification, or already making loan modification trial period payments, know that problems like this can be prevented with the right attorney by your side. The team of Miami foreclosure attorneys at Graham Legal can help you through the process and protect your rights every step of the way. Call today for a free consultation.