Did your mortgage company tell you to stop paying in order to qualify for a loan modification?

I recently had 2 clients in foreclosure. One was a residential Mortgage foreclosure in the Westchester County Supreme Court. The other one is a four-unit residential property in foreclosure in the New York County Supreme Court. In both cases, my client had alleged that the bank representative told them to stop making payments in order to become eligible for a loan modification. Both clients were facing summary judgment and I submitted opposing papers including affidavits and memoranda of law. The case in the Manhattan Supreme Court went to oral argument recently. I have not received decisions in either of them but this is not the first time that I have heard clients tell me that banks told them to stop making payments. It is a common misconception among low-level bank employees that the only borrowers who are eligible for modification are those who are actually in default. The standards do not require an actual default but only that there is an imminent risk of default. There is often miscommunication between bank representatives and borrowers. This is made worse by the frequent assignments of loans between investors and servicers. Some clients have been given the wrong information and then cannot even figure out who owns the loan or who to speak to about it. These situations raise potential defenses based on breach of contract, fraud, estoppel, unclean hands, and frustration of performance.