Attorney and Clinical Instructor Julia Devanthéry of the Housing Law Clinic (LSC) recently won an appeal in the case of Wells Fargo Bank v. Cook, et al. Her clients were two homeowners from Mattapan who had been fighting eviction after the unlawful foreclosure of their home.
The central issue in the case was whether a massive 2008 foreclosure prevention workshop held at Gillette Stadium qualified as a “face-to-face” meeting between lenders and borrowers under the regulations which govern Federal Housing Administration insured mortgages. The Appeals Court concluded that Wells Fargo had failed to demonstrate that the Gillette event met the requirements of the regulations since the bank representative rejected the borrowers’ attempt to make a payment, and didn’t have the requisite authority to modify their loan at the event.
Devathéry, quoted in a Massachusetts Lawyers Weekly article, says “Wells Fargo tried to argue that the HUD regulation merely requires that a lender representative have a meeting in the same room with borrowers,” but that in fact, the regulation contemplates “something much more nuanced and personalized.” Devanthéry says she and her clients are hopeful that the decision will “translate into compliance by FHA-insured lenders to really work with borrowers in a way that allows them to avoid foreclosure if at all possible. In giving FHA-insured mortgages to borrowers, lenders take on additional consumer protection obligations in exchange for mortgage insurance from the federal government. By foreclosing on the Cooks’ home without first complying with the HUD regulations, Wells Fargo is essentially trying to take the benefits of this federally subsidized insurance program, and none of the obligations or responsibilities that go along with it.”
“The win would not have been possible without the work of several outstanding clinical students and the leadership of Housing Clinic director Maureen McDonagh,” Devanthéry said.
You can read the full article on Massachusetts Lawyers Weekly here. (Subscription is required).