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""CitiMortgage Inc."":http://www.citimortgage.com has been hit with a class action lawsuit for allegedly denying borrowers a permanent loan modification through the government's Home Affordable Modification Program (HAMP).
[IMAGE]The complaint was filed by the law firm of ""Berger & Montague, P.C."":http://www.bergermontague.com in the United States District Court for the Eastern District of Pennsylvania this week.
The firm says it is representing all Pennsylvania homeowners whose mortgage loans have been serviced by CitiMortgage and who, since April 13, 2009, have entered into a trial modification plan, made all payments as required under the trial contract, and complied with CitiMortgage's requests for documentation, but have not received or have been denied a permanent HAMP mod.
[COLUMN_BREAK]The complaint alleges that Citi is contractually obligated to modify mortgage loans it services for homeowners who qualify under HAMP.
""According to the lawsuit"":http://www.bergermontague.com/case-summary.cfm?id=269, CitiMortgage ""systematically slows or thwarts homeowners' requests to modify mortgages,"" while collecting ""higher fees and interest rates associated with stressed home loans.""
In Treasury’s latest monthly ""HAMP status report"":http://www.treasury.gov/initiatives/financial-stability/results/MHA-Reports/Documents/Feb%202011%20MHA%20Report%20FINAL.pdf released last week, officials included the results of “Second Look†reviews conducted in the third quarter of 2010.
As HAMP compliance agent, ""Freddie Mac"":http://www.freddiemac.com performs these “Second Look†evaluations on a statistical sample of loan files of homeowners that were not in HAMP modifications, to determine if the servicers’ actions were appropriate.
Based on the third-quarter analysis, CitiMortgage had one of the lowest “disagree†percentages among the largest servicers. During July of last year, Citi’s “disagree†ratio was around 4 percent; in August it edged up above 5 percent; but by September had dropped down to just 1 percent.
According to Treasury, the most common reasons for a HAMP trial cancellation or permanent mod denial from all servicers are: insufficient documentation; trial plan payment default; or an ineligible borrower, meaning the first lien housing expense is already below 31 percent of household income â€" a threshold mandated by the HAMP guidelines.
