Trial Payment Plan is not an Enforceable Contract | KEY POINTS

  • In the context of modifying an existing mortgage loan, the United States District Court, Middle District of Florida, concluded the terms of a trial payment plan are indefinite and uncertain as to the material terms of any permanent loan modification. The Court held a trial payment plan does not constitute an enforceable contract or a permanent modification of a loan.
  • The Middle District of Florida determined written communication sent by the lender to the borrower advising a permanent loan modification was not possible due to unresolved title issues was sufficient to satisfy the pertinent RESPA notice requirements under 12 C.F.R. 1024.41(d), that a “specific reason for denial” of a loan modification be communicated to the borrower.
  • The Middle District of Florida required additional evidence of whether Wells Fargo or Rushmore moved for an order of sale, or conducted a sale while “an appeal by the [O’Steens] was pending” to determine whether the lender/servicer violated the RESPA provisions of 12 C.F.R. 1024.41(g). The Court noted there was some confusion as to whether the O’Steens’ “Dispute Request Form” constituted an appeal of the loan modification denial for purposes of § 1024.41(g). If the form constituted “an appeal” under subsection (g), the servicer may have been prohibited from prosecuting the foreclosure until the “appeal” was resolved.