Massachusetts Couple Facing F'closure To Keep Home After Settling Lawsuit; Sought Loan Modification & Claimed WAMU Failed To Bargain In Good Faith

In Boston, Massachusetts, the Lowell Sun reports:

• A Westford couple's lawsuit against the nation's largest mortgage company -- one of many filed against Washington Mutual -- has been settled more than two years after the firm failed to respond to the couple's attempts to save their home from foreclosure. Lori and Mark Pestana originally filed a $5 million lawsuit in October 2008 alleging that Washington Mutual and its attorney, Boston-based Harmon Law Offices, which collected foreclosure fees and costs, violated state law that requires them to bargain in good faith. They settled the lawsuit last month, with the couple being able to stay in their home.

• The Pestanas did not return a call seeking comment, but attorney Kevin Costello, who represents the couple, described his clients as the "poster children" for the gap between a lender's professed and public statements to stop foreclosures and the reality of the borrower's experience. "Although I cannot disclose the precise terms of the settlement, I can say that we expect the Pestanas to be able to remain in their home,'' Costello said. "This was an individual settlement that was deeply affected by WaMu's collapse and seizure by the FDIC. That action made the legal issues in the case vastly more complicated."

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• The Pestanas' lawsuit sought class-action status on behalf of thousands of Washington Mutual's former borrowers in Massachusetts. In the lawsuit, attorney Gary Klein, who also represents the Pestanas, wrote that the company's process for managing delinquent accounts creates "a nightmare for homeowners who deeply care about saving their homes."

For the story, see Couple settles foreclose lawsuit.