Majd v. Bank of America, N.A., et al.
Facts: An owner purchases residential property funded by an adjustable rate mortgage (ARM). When the ARM interest rate resets upward, the owner goes into default and requests a loan modification under the Home Affordable Mortgage Program (HAMP). While the loan modification is under review, the mortgage holder forecloses on the property.
Claim: The foreclosed owner seeks to invalidate the foreclosure, claiming the foreclosure was in violation of HAMP since they complied with the loan modification requirements and the foreclosure occurred while their loan modification was under review.
Counterclaim: The mortgage holder claims the property owner cannot rescind the foreclosure since HAMP does not require them to provide the property owner with a loan modification even if the eligibility requirements are met.
Holding: A California court of appeals holds the foreclosure may be invalidated and the trustee’s deed upon sale may be rescinded since the mortgage holder violated HAMP by foreclosing on the property while the loan modification was under review. [Majd v. Bank of America, N.A., et al. (December 21, 2015) __CA4th__]