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Sunday, March 11, 2012

Ind. Decisions - 7th Circuit gives Chicago homeowner OK to sue lender over HAMP denial

Ameet Sachdev, Chicago Tribune reporter, had this story March 9th. The subhead: "Woman alleges Wells Fargo broke promise to permanently reduce her loan payments after 4-month trial under the Home Affordable Modification Program." The story begins:

A Chicago homeowner who was denied participation in a federal mortgage modification program can sue her lender for fraud and other claims, a federal appellate court said this week.

Lori Wigod sued Wells Fargo in 2010 after the bank had deemed her ineligible for the Home Affordable Modification Program, or HAMP. Wigod alleged that Wells Fargo had broken a promise in 2009 to permanently reduce her loan payments on a more than $700,000 mortgage after giving her a four-month trial modification.

U.S. District Judge Blanche Manning threw out her complaint last year, ruling that Wigod's claims were barred by federal law.

The 7th Circuit U.S. Court of Appeals, in an opinion released Wednesday, overturned Manning's decision and revived most of Wigod's suit. The ruling is likely to send shivers through the banking industry, which up until now has largely been shielded from HAMP-related lawsuits.

"It's a real victory for homeowners," said Steven Woodrow, of Chicago law firm Edelson McGuire, who represents Wigod. "The 7th Circuit should be commended for sticking up for the rights of borrowers."

Here is the 75-page, March 7, 2012 opinion, authoried by Judge Hamilton, in Lori Wigod v. Wells Fargo Bank.

Posted by Marcia Oddi on March 11, 2012 10:08 AM
Posted to Ind. (7th Cir.) Decisions