Nationstar Mortgage, LLC named in class action over failure to honor applicants of the Home Affordable Modification Program

Nationstar big

 

The lawsuit was brought  on behalf of a class of homeowners across the nation (the “Class”) to challenge Defendant Nationstar Mortgage, LLC’s (“Defendant” or “Nationstar”) intentional and systematic failure to provide permanent loan modifications to borrowers who signed Permanent Modification Agreements (“PMAs”) under the Home Affordable Modification Program (“HAMP”).

As alleged, Nationstar has serially failed to honor its express and implied contractual obligations under its PMAs, has made repeated misrepresentations of material fact, and has engaged in business practices that are deceptive, immoral, unscrupulous, unfair, and oppressive under California law.

Under the Troubled Asset Relief Program (“TARP”), also known as the taxpayer bailout, the United States Government provided the nation’s largest financial institutions with nearly $700 billion in funds to address what was widely accepted as an unprecedented financial crisis.

A key feature of TARP is the Making Home Affordable Program, of which the HAMP is a major component. Under the HAMP, servicers like Nationstar and other major lenders receive incentive payments for providing mortgage loan modifications to eligible borrowers such as Plaintiff Burton and the putative Class.

In or around May 2009, Nationstar signed a contract with the U.S. Department of the Treasury, through its agent, Fannie Mae, agreeing to participate in the HAMP as an approved HAMP servicer. Nationstar thereafter executed an amended Servicer Participation Agreement (“SPA”) in or around September 2010.

As a HAMP servicer, Nationstar entered into written PMAs for modifications with Plaintiff and other eligible Nationstar borrowers. These PMAs, which were form contracts, expressly required Nationstar to permanently modify the borrower’s loan pursuant to the terms of the PMA.

Plaintiff and the members of the putative Class complied with their obligations under their TPP Agreements and PMAs by executing and submitting all required documentation, answering all questions truthfully, keeping their representations true and accurate, and making their required trial period payments. Despite Plaintiff’s and the other Class Members’ full performance,

According to the complaint, Nationstar has ignored its obligations under their PMAs and the HAMP by refusing to permanently modify their loans. Nationstar’s failure to permanently modify its borrowers’ loans is no accident. To the contrary, Nationstar has knowingly established a system designed to wrongfully deprive its eligible HAMP borrowers of an opportunity to modify their mortgages, pay their loans, and save their houses from foreclosure. Nationstar’s actions, which serve only its interest in extracting as much money as possible from borrowers it deems are at risk of default, thwart the very purpose of HAMP, constitute express and implied breaches of its various contracts, and amount to immoral, unlawful, and unfair business practices under California’s Consumer Legal Remedies Act.

A copy of a complaint may be viewed here: Nationstar 3-19-13