Moore v. Wells Fargo Bank, N.A.
Facts: A homeowner who is unable to afford their monthly mortgage payments enters into a temporary forbearance agreement with their mortgage holder, significantly reducing their monthly payments. Under the terms of the agreement, the owner may apply for a permanent modification after meeting the requirements of the forbearance plan and other unspecified qualifying criteria. If the permanent modification is denied, the mortgage is to return to the original payment schedule. The agreement contains conflicting provisions concerning the treatment of deferred amounts. The owner complies with the forbearance plan and applies for a permanent modification. The application is denied and the mortgage holder demands the difference between all reduced payments and the monthly amount of the original payments. The owner is unable to pay and the mortgage holder initiates foreclosure.
Claim: The owner seeks to stop foreclosure and retain possession of the property, claiming the mortgage holder may not collect the amount in dispute since the mortgage holder intentionally misrepresented the terms of the forbearance plan and the contract was worded ambiguously.
Counterclaim: The mortgage holder claims they may foreclose the property since the owner was in default on their original mortgage by paying only the reduced forbearance plan payments.
Holding: A California appeals court holds the mortgage holder may not foreclose since the mortgage holder intentionally misrepresented the terms of the forbearance plan and the contract was worded ambiguously. [Moore v. Wells Fargo Bank, N.A. (August 28, 2019)_CA6th_]