Is the mortgage company required to convert a trial payment plan into a permanent loan modification?
I have clients who own a house in Nassau County. The property is in a foreclosure action in the Nassau County Supreme Court. The action is several years old and the clients already had defaulted by not opposing the bank’s motion for summary judgment in 2013. However, in 2015, the bank offered them a trial payment plan, sometimes called a temporary loan modification. The approval letter was unequivocal and stated that as long as the borrowers made three payments and accepted by a certain date, the bank would give them a permanent loan modification. This was unusual because typically temporary modification approval letters contain disclaimers and/or equivocal language that does not normally commit the bank to issue a permanent modification. In this case, the letter was very clear and the borrowers did everything that was required. In 2016, the bank filed a motion for a final Judgment of foreclosure and sale and the borrowers retained me. I prepared an opposing brief and affidavits to the motion on the grounds that the bank had already committed to a permanent loan modification the year before. My clients had proof that they made all the payments and the motion has been fully submitted to the Supreme Court. This is one of those cases where the court should compel the bank to issue a permanent modification based on the clear language in the trial payment plan.