After learning they did not qualify for the Home Affordable Modification Program, property owners from St. Charles Parish filed suit against their mortgage company for not adequately communicating information about the program.
Curtis and Theresa Lawrence filed suit against Citimortgage, Inc. a member of Citigroup, Aug. 2 in Orleans Parish District Court.
The couple says it entered into a 30-year mortgage contract with Citimortgage in September 2008. After learning of the Home Affordable Modification Program, the home owners contacted the mortgage company in June 2009 to discuss the possibility of a loan modification program.
The Lawrences say they were current with their loan payment and had never been in default. They claim Citimortgage represented it would place them in a trial mortgage modification program that would become permanent if they made reduced payments during the three-month trial period. The trial period began in September 2009 and "for the plaintiffs, it lasted until March 2010."
According to the lawsuit, the couple fulfilled all obligations by submitting requested paperwork and making timely modified payments.
However, the plaintiffs state that Citimortgage started "hounding" them in May 2010 for a purported $7,046.67 delinquency fee. The Lawrences say they were rejected for the permanent loan modification program and their credit worthiness was ruined.
Citimortgage told the Lawrences that their reduced payment plan was not actually approved and that if they did not make payment on the delinquency fee, their home would be short-sold or foreclosed, according to the lawsuit.
The homeowners claim the defendant failed to disclose the risks regarding the modification program including that the plaintiffs may not be eligible to participate, how the modified payments may be reported as default or late payments to credit bureaus, and how the homeowners could be rejected from the trial modification period at any point which would result in an immediate demand for a balloon payment plus late and delinquency fees.
Citimortgage is accused of breach of contract, unfair trade practices and negligence for failing to properly communicate, warn, notify, advise the plaintiffs of their need to take action or about the potential for being ineligible for modification program. The defendant is also accused of breach of fiduciary duty, making material misrepresentation, improper takings and conversion of property, charging for services which were never rendered and for engaging in misrepresentation, deception, or other unethical conduct.
The Lawrences are seeking damages for mental pain and suffering, inconvenience, damages resulting from the conversion of the property, treble damages, attorney fees, interest and court costs.
They are represented by New Orleans attorneys Anthony D. Irpino and K. Adam Avin of Irpino Law Firm.
Judge Herbert A. Cade is assigned to the case.
Case No. 10-7941