Wells Fargo Sells Home Out From Under Borrower, Despite No Late Payments On Loan Modification, Says Boston Homeowner

In Boston, Massachusetts, the Boston Herald reports:

• Roberta Frugoli thought she had a deal to modify her mortgage and avoid foreclosure, but the Carver woman claims Wells Fargo auctioned off her home anyway. “My head is still spinning,” the 54-year-old divorced mother of three said. “I got a call from the bank at work saying they (seized) my house and I said, ‘You can’t do this, I had all the paperwork in.’” Frugoli is one of four Massachusetts homeowners suing Wells Fargo or Bank of America over lenders’ alleged failure to comply with the federal Home Affordable Modification Program.

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• Frugoli, who owns a cleaning company, thought she worked out a pact to reduce her mortgage bill by $1,000 to $1,400 a month. But even though lawyer Josef Culik says he submitted all paperwork, Wells Fargo reclaimed title to the woman’s home last month via a foreclosure auction. “Something went terribly wrong,” said Culik, who plans to sue the bank [] to block his client’s eviction. “When someone is being evaluated for (HAMP), foreclosure activity is supposed to be suspended.”

• Boston lawyer Gary Klein filed a separate lawsuit [] against Wells Fargo on behalf of two other Hub homeowners.(1) Klein, who also sued Bank of America on behalf of a Salem homeowner,(2) claims the lenders gave his clients three-month “trial” modifications, but failed to make changes permanent. “The servicers don’t appear to be acting in good faith,” said Klein, who’s won some $100 million in foreclosure-related settlements from banks. "They’ve told the government that they’re going to be modifying mortgages, but they aren’t doing it.”(3)

For the story, see Woman loses home while in talks on loan changes (when the link expires, try here).

For follow-up story, see WCVB-TV Channel 5: Woman Sues Big Banks To Save Foreclosed Home:

• Frugoli and her attorney have filed suit in Brockton Superior Court against Wells Fargo. "The banks agreed to evaluate any homeowner for a loan modification before they considered foreclosure. That's a prerequisite to foreclosure under the making home affordable program," attorney Josef Culik said. Frugoli claims that did not happen in her case and now she's asking a judge to cancel the foreclosure sale of her home. The judge said he would hear from both sides in two weeks.

(1) See Bosque et al. v. Wells Fargo Bank, N.A.

(2) See Johnson v. BAC Home Loans Servicing, LP.

(3) In a related story, see The Boston Globe: Banks violated mortgage rules, lawsuits allege (Plaintiffs say they’re stuck in loan-modification limbo).