Federal Appeals Court: OK Under State Law To Double-Cross Minnesota Homeowners With False Promises Of Foreclosure Forbearance

From a recent post in Public Citizen's Consumer Law & Policy Blog:

• What Happens When A Lender Promises Not to Foreclose But Forecloses Anyway?
  
  
• According to Brisbin v. Aurora Loan Services, No. 11-1218 (8th Cir. May 21, 2012), decided Monday by the Eighth Circuit, under Minnesota law, the homeowner is out of luck because a homeowner can only sue on promises made in written agreements.
  
  
• This is true even under a promissory estoppel theory -- that is, even if, as alleged in Brisbin, the homeowner relied to her deteriment on the promise to forbear
  
  
• As the homeowner's lawyer put it in an article on the case, the Eighth Circuit's decision "solidifies the ability of the mortgage company in this case to explicitly lie to the customers it's serving and not be held accountable when an individual is relying on representations being made."
  
  
• I wonder whether this would be the law in any, many, or most other states.

Source: What Happens When A Lender Promises Not to Foreclose But Forecloses Anyway?

See also, The National Law Journal: Oral promise to delay foreclosure means nothing, Eight Circuit rules (Minnesota's credit agreement law bars courts from enforcing a lender's oral promise to delay a foreclosure sale, the U.S. Court of Appeals for the Eighth Circuit has ruled) (free registration required).

Thanks to Deontos for the heads-up on the story.