Welcome to JustAnswer and thank you for the opportunity to assist you. Please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break. 1) Under these circumstances, what legal argument can the Homeowner present stating that the money paid to the HAMP contract (Contract II) was wrongfully applied by the Mortgage company to the original Mortgage contract (Contract I)--as they are two separate contracts---and that the money should be returned to the Homeowner with interest?
There really is no legal argument here for the homeowner. They money would be applied to the payment, be it interpreted under Contract I or Contract II.2) Can the Mortgage company arbitrarily cancel a HAMP mortgage contract --and refuse to accept further payments---when the Homeowner made the requisite three initial payments, and a subsequent 6 additional payments, on the grounds that its investor denied the contract?
This cannot be done. Homeowner signed a contract with the mortgage institution. Institution cannot breach contract for the Home Affordable Modification program(unless the new contract has a clause that states that upon the underwriter withdrawing support, the contract is voided - check carefully!), and and the underwriter's withdrawal is the Institution's problem, and not Homeowner's.
So what to do? The Homeowner needs to write a certified letter to the Institution advising them of said stand and threaten suit unless they reinstate HAMP.
In this case, the Homeowner would have the right to sue for the tort
of breach of contract
. The elements for this tort are: (1) an agreement was made between the plaintiffs and the defendant supported by valid consideration; (2) the plaintiffs have been ready, willing, and able to perform; (3) the defendant's breach has prevented them from performing; and (4) the plaintiffs have suffered damage. Singarella v. City of Boston, 342 Mass. 385, 387, 173 N.E.2d 290, 291 (Mass.1961)
The homeowner may also then request a motion for temporary orders enjoining the Institution from filing for foreclosure
and forcing it to apply the amount in escrow to Contract II and take payments in Contract II's amount, while the matter is pending.
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