1st Circuit Reinstates Loan Modification-Seeking Homeowner's Earlier-Dismissed Suit Accusing Servicer Of Unfair Debt Collection Practice By Jerking Her Around In Violation Of Bay State UDAP Statute; Bankster Faces Possible Triple Damages; Court: 'Absence Of Contractual Breach No Bar To Liability'

In Boston, Massachusetts, The National Law Journal reports:

• A federal appellate court ruled that Wells Fargo Bank must face a Massachusetts consumer protection law claim that entails possible triple damages, plus additional claims, for its conduct toward a homeowner under a federal loan modification program.
  
  A unanimous U.S. Court of Appeals for the First Circuit ruling in Young v. Wells Fargo Bank N.A. revived Susan Young's District of Massachusetts case.
  
  Young sued Wells Fargo and American Home Mortgage Servicing Inc., now part of Atlanta's Ocwen Financial Corp., after she tried to avail herself of protections under the Home Affordable Modification Program (HAMP). She tried to modify a $282,000 mortgage she obtained from Wells Fargo in 2006. American Home was the servicer.
  
  "This conduct dates back to August 2008, when defendants mistakenly posted a notice on her door stating that she was in arrears on her mortgage payments, and continued to supply her with misinformation about her obligations under the mortgage," Senior Judge Kermit Lipez wrote, joined by Judge Jeffrey Howard and Senior Judge Norman Stahl. The court released the opinion on Tuesday.
  
  "Defendants' handling of her loan modification process under [HAMP's trial period plan] was only the culmination of a prolonged period of unfair conduct," he continued.(1)

For more, see First Circuit Revives Claim for Faulty Foreclosure.

For the ruling, see Young v. Wells Fargo Bank N.A., No. 12-1405 (1st Cir. May 21, 2013)

(1) In this excerpt, the appeals court described the situations where the Massachusetts statute prohibiting unfair or deceptive acts or practices ("UDAP") applies:

• Young also pleads a claim under Mass. Gen. Laws ch. 93A, otherwise known as Chapter 93A. This statute "provides a cause of action for a plaintiff who 'has been injured,' by 'unfair or deceptive acts or practices.'" Rule v. Fort Dodge Animal Health, Inc., 607 F.3d 250, 253 (1st Cir. 2010) (quoting Mass. Gen. Laws -30-ch. 93A, §§ 2(a), 9(1)).
  
  The Massachusetts courts have explained that "[a] practice is unfair if it is within the penumbra of some common-law, statutory, or other established concept of unfairness; is immoral, unethical, oppressive, or unscrupulous; and causes substantial injury." Linkage Corp. v. Trs. of Boston Univ., 679 N.E.2d 191, 209 (Mass. 1997) (citation omitted) (internal quotation marks omitted) (modifications omitted).
  
  Violation of a statute is not a necessary element of a Chapter 93A claim, as the consumer protection law "creates new substantive rights and, in particular cases, makes conduct unlawful which was not unlawful under the common law or any prior statute." Commonwealth v. Fremont Inv. & Loan, 897 N.E.2d 548, 556 (Mass. 2008) (internal citation omitted) (quotation marks omitted).
  
  Nor is liability under Chapter 93A precluded by the absence of a contractual breach. See NASCO, Inc. v. Public Storage, Inc., 127 F.3d 148, 152 (1st Cir. 1997).