HAMP, no private right of action but use state law claims

Administrator
Site Admin
Posts: 11757
Joined: Tue Jul 26, 2005 4:15 am

HAMP, no private right of action but use state law claims

Postby Administrator » Wed Nov 12, 2014 2:29 pm

HAMP appears to not allow a private right of action but can violations of HAMP be used as a per se fault cause?

"Further....

"II. Breach of Contract
Law asserts numerous grounds for breach of contract. These include Ocwen's alleged failure to honor the loan modification proposal and its alleged failure to comply with United States Department of Housing and Urban Development (“HUD”) and Home Affordable Modification Program (“HAMP”) regulations. We examine each of these claims.


a. Loan Modification Agreement

To prove breach, a party must first demonstrate the existence of a valid contract. Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir.2009) (citing Aguiar v. Segal, 167 S.W.3d 443, 450 (Tex.App.-Houston [14th Dist.] 2005, pet. denied)). It follows that, to prove breach of a modified contract, a party must first demonstrate the existence of a valid modification. In his complaint, Law maintains that Ocwen breached the February 2011 loan modification agreement. For two reasons, we conclude that the loan modification agreement was ineffective. Ocwen therefore could not have breached the agreement.


First, to accept Ocwen's loan modification proposal, Law was required to comply with all conditions placed upon the time and manner of acceptance. See Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex.1995). Those conditions included Law's signing and faxing the agreement to Ocwen and making a down payment by February 3, 2011. Law, however, did not sign the agreement until February 7, and he did not fax the agreement to Ocwen until February 9. Furthermore, he did not send the required payment until February 8. Because Law failed to meet these conditions, we conclude that he never accepted Ocwen's offer to modify the loan.


Second, the agreement did not satisfy the Texas Statute of Frauds, which requires that certain contracts be: (1) reduced to writing and (2) signed by the party to be bound by the agreement. Tex. Bus. & Com.Code § 26.01(a). It is undisputed that Ocwen did not sign the proposed modification agreement. Thus, the only question is whether the modification agreement was subject to the Statute of Frauds. In Texas, an agreement materially altering a contract must satisfy the Statute of Frauds when the underlying contract was subject to the Statute of Frauds. See Hondo Oil & Gas Co. v. Tex. Crude Operator, Inc., 970 F.2d 1433, 1438 (5th Cir.1992); Garcia v. Karam, 276 S.W.2d 255, 257 (Tex.1955). In Texas, loan agreements for sums exceeding $50,000 must satisfy the Statute of Frauds. Tex. Bus. & Com.Code § 26.02(b). Thus, because the loan agreement between Law and Ocwen for $284,000 was required to satisfy the Statute of Frauds, so too was the proposed modification agreement. Because the loan modification proposal failed to do so, it was not a valid contract upon which a claim of a breach can be based.



b. HUD and HAMP Regulations



We have previously held that the HUD Handbook does not afford a private cause of action. Roberts v. Cameron–Brown Co., 556 F.2d 356, 360–61 (5th Cir.1977). This circuit has not precedentially resolved whether there is a private cause of action under the HAMP regulations. We have held in an unpublished opinion that there is not. Pennington v. HSBC Bank USA, N.A., 493 F. App'x 548, 552 (5th Cir.2012) (citing Miller v. Chase Home Fin., LLC, 677 F.3d 1113, 1116 (11th Cir.2012)). We need not answer that question here, because Law has not presented any argument to suggest that there is a private right of action.


Thus, in order to bring suit for violations of HUD or HAMP regulations, Law must show that the regulations were incorporated into the deed of trust. Law points to no language in the deed of trust that incorporates HAMP. With regard to the HUD regulations, Law's complaint states that “the Note and Deed of Trust expressly provide that the acceleration and foreclosure on plaintiff['s] loan are subject to limitation through regulations promulgated by the HUD Secretary.” The only possible source of this contention is the statement in the deed of trust that its provisions “shall not limit the applicability of federal law to this Deed of Trust.” This language does not mention the HUD regulations, much less “expressly” incorporate them, as the complaint states. A deed of trust's mere mention that federal law applies can hardly be construed as affording a private cause of action under statutes that do not provide one. As a result, Law could not assert claims for violations of the HUD and HAMP regulations.'"

Law v. Ocwen Loan Servicing, L.L.C.
--- Fed.Appx. ----, 2014 WL 5285947
C.A.5 (Tex.),2014.
October 16, 2014
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

Administrator
Site Admin
Posts: 11757
Joined: Tue Jul 26, 2005 4:15 am

Re: HAMP, no private right of action but use state law claim

Postby Administrator » Wed Nov 12, 2014 2:30 pm

We do not address any alleged HAMP violations under a private right of action or third-party beneficiary theory because those claims were not brought in the district court.

Massey v. EMC Mortg. Corp.,
546 Fed.Appx. 477, C.A.5 (Tex.), November 05, 2013 (NO. 12-10993)
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

Administrator
Site Admin
Posts: 11757
Joined: Tue Jul 26, 2005 4:15 am

Re: HAMP, no private right of action but use state law claim

Postby Administrator » Wed Nov 12, 2014 2:30 pm

Other courts have decided that the additional terms in the TPP constitute consideration, namely opening new escrow accounts, undergoing credit counseling if asked, and proving financial information. E.g., Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 564 (7th Cir.2012). A few courts have declared that state breach-of-contract claims fail to state a cause of action independently of HAMP. E.g., Bourdelais v. J.P. Morgan Chase, No. 3:10–CV–670–HEH, 2011 WL 1306311, at *4 (E.D.Va. Apr. 1, 2011). Because HAMP affords no private right of action, *553 Miller v. Chase Home Fin., LLC, 677 F.3d 1113, 1116 (11th Cir.2012), the Bourdelais court's reasoning means dismissal of a claim.



Pennington v. HSBC Bank USA, N.A.
493 Fed.Appx. 548
C.A.5 (Tex.),2012.
October 03, 2012
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association


Return to “Home Affordable Modification Program (“HAMP”) and Home Affordable Foreclosure Alternatives Program (“HAFA”)”

Who is online

Users browsing this forum: No registered users and 1 guest