Homeowners at Risk of Foreclosure Face Grim Reality

A front page story in today's New York Times by Michael Powell about thousands of Americans fighting the loss of their homes through foreclosure discusses the federal class action lawsuit filed by The Legal Aid Society which is one of the first law suits to challenge a mortgage servicer for breach of contract by failing to review mortgage loans of eligible homeowners for the Obama Administration's Home Affordable Modification program (HAMP) and to provide a procedure to contest denial.

Four homeowners from Queens and Brooklyn, who are at risk of losing their homes to foreclosure, filed the lawsuit, Edwards et al v. Aurora Loan Services,LLC et al, in the United States District Court for the District of Columbia, on November 9, charging that Aurora Loan Services, their mortgage servicer, has denied them access to HAMP for spurious reasons, and has failed to provide them with notice so they may contest such denials.

"The servicers ignore their obligations, and are throwing unaffordable agreements at people and setting them up for another default,” said Oda Friedheim, a staff lawyer in the Civil Practice's Law Reform Unit and the lead attorney on the lawsuit.

The story also quotes Tom Vellucci, one of the four plaintiffs in the lawsuit, who is in danger of losing his home in Floral Park. “I don’t sleep at night, I don’t sleep at all,” he said, rising slowly. “I tell Maria, ‘If we lose the house, I want to stop my dialysis.’ I want to die, honestly.”

Read the full article from The New York Times.