Just like many homeowners in Florida, Peter and Maria Bloch were hit hard by the downturn, struggling to make payments on a mortgage that was worth more than the value of their home on Lake Worth’s Hunting Trail. And then in 2008, they were hit with a foreclosure action.
They then sought help in federal programs aimed at facilitating loan modifications, in the Blochs’ case, with lender Wells Fargo.
But what began as a good-faith effort to modify their loan after the home was foreclosed upon in 2008, turned into a drawn-out struggle that is still without resolution.
Last week, the Blochs, through attorney Lawrence Caplan, brought a lawsuit in federal court against Wells Fargo and investor Bank of America, seeking damages for their three-year odyssey.
“It’s the grand modification carnival,” Caplan said, describing the apparently labyrinthine process which most foreclosed homeowners must navigate. “I could have you on the line, and call 10 Wells Fargo reps, and I could almost guarantee you that we’d get 10 different answers as far as what the [loan modification] process would entail.”
Caplan was not certain whether this was the first such loan modification lawsuit in Florida, although it does follow similar suits in New York and Massachusetts. Caplan said that while he had not brought the case as a class-action suit, it could be potentially converted into one.
“We are currently researching this case to better understand the nature of the Blochs’ lawsuit,” Wells Fargo said in a statement provided to The Real Deal. “In general, we work hard to keep our customers in their homes when they encounter difficulties. In 2009, through the end of February 2011, 649,075 of the loans we service were in active trial or completed mortgage loan modifications. We can provide additional context when we have more information about the facts of the filing.”
According to the complaint, the Blochs (Maria is in fact a mortgage broker) began working to modify their loan due to the loss of personal income in November 2007, before the official foreclosure notice against their home.
The Blochs were in constant contact with Wells Fargo, they said, first being placed in the federal Home Affordable Modification Program, until they were dropped from the program a year later. The Blochs allege that they were further required to pay a large one-time payment at one point, the application of which was never explained to them.
Now, the couple is seeking around $500,000 in damages, along with punitive damages, against Wells Fargo and Bank of America.
“I could see how it could drive decent people out of their minds,” Caplan said. “These people have tried everything they could do to get some relief, and they’ve been shunted aside at every turn.”