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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 116727
Experience:  Attorney experienced in commercial litigation.
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What happens when a loan servicer, against which you have a

Customer Question

What happens when a loan servicer, against which you have a strong legal case for denying your HAMP application improperly (due to doing the calculations wrong), has been dismantled by its parent company and the loans transferred to another company? My the mod was denied in error. Per HAMP, the first servicer, after they acknowledged their error, was supposed to modify it as if I were in the financial condition I was in when I applied originally.Does the new servicer have to honor that?If they do, would they be working with the original loan amount and terms, and modifying those, or, given that the improper denial meant I had to declare bankruptcy to stop a foreclosure, would they modify the revised loan? Original: $600K plus $200K arrears at 6%, 24 years remaining versus crammed-down $700K and no arrears at 4% an 30 years remaining, after cram down. Not bad, I know, but technically, my income is relatively low enough to qualify for HAMP. (I realize HAMP expires tonight.)If this is related enough: With the first servicer defunct, is there anyone to sue over the improper denial and the threat of foreclosure? Once I figured out the miscalculation, I informed the original servicer in a qualified written request and asked for the HAMP mod I qualified for. They acknowledged the letter but didn't reply to its substance, only promised to. Hence, bankruptcy. I wrote to them two more times, during the BK, and didn't even get acknowledgments. I can't afford a lawsuit, but if I could, is the former CEO liable? The new servicer? The first servicer's parent company?Regarding the parent company, the following is from the agreement to sell the loan servicing rights to a new servicer. It looked promising. Do you know what it means?• [my old servicer, their parent company, and the new servicer] entered into a letter agreement pursuant to which, among other things, [parent company] has agreed to guarantee certain indemnification obligations of [my old servicer] under the Agreement, subject to a cap of $10.0 million in aggregate."
Submitted: 6 months ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
If the company improperly denied your HAMP and then was closed by their parent company and did not file bankruptcy and the parent company assumed all the loans, the parent company is liable for all of the improper actions as well. So you can sue the parent company that took over the loans for improperly denying your HAMP and seek the damages from the parent company.
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