The New Jersey Appellate Division recently held that a homeowner who meets all of his obligations under a Home Affordable Mortgage Program (HAMP) trial period plan agreement would be entitled to a loan modification. The court looked at the agreement which provided in part: “If I am in compliance with this Trial Period Plan…then the servicer will provide me with a home affordable modification agreement”. Thus, if the agreement requires the homeowner to make three trial payments and he does, then the lender must give the homeowner a modification of the mortgage terms. Typically this would include allowing the homeowner to bring any default current through affordable payments. The Appellate Division relied in part on a Federal 7th Circuit decision which found that a mortgagor could assert a common law contract claim based on a bank’s failure to honor promises in a trial period plan agreement.
It is most important that you consult experienced counsel to review the trial period plan agreement to see if you have a claim.