Sunday, August 09, 2009

Minnesota Suit Seeks To Slam Brakes On Foreclosures Until Feds Implement Better Procedures In Program Borrowers Claim Violates Due Process Rights

In Minneapolis, Minnesota, the Minneapolis Star Tribune reports:
  • Across the state and the nation, struggling homeowners [...] are growing frustrated with a $75 billion federal program that was supposed to ease the housing crisis by preventing so-called "avoidable foreclosures" by cutting borrowers' monthly mortgage payments. But, according to a U.S. Treasury report released Tuesday, only a very small percentage of people who qualify for relief under the program are actually getting it. In many cases, borrowers have been strung along for months, only to be told in the end that they don't qualify. And when borrowers are denied, they often are not told why.


  • Last week, the Foreclosure Relief Law Project, a nonprofit law firm in St. Paul, filed a lawsuit on behalf of [Brooklyn Park homeowner Nichole] Williams and Johnson Sendolo, a Woodbury homeowner, who both claim they qualify for federal relief but were turned down by lenders without being given a reason. The lawsuit, which seeks to stop the lenders from foreclosing on more homes until better procedures are put in place, accuses the U.S. Treasury of violating borrowers' due process rights by denying them access to a federal program without proper notice or explanation.

  • "The smart thing to do for everyone is to press the pause button, to stop the foreclosure factory, and figure out what's wrong," said Mark Ireland, supervising attorney for the Foreclosure Relief Law Project.

For the story, see Federal mortgage program defaulting on a pledge? (A federal program that promised relief to millions of struggling homeowners has fallen far short of expectations).

See also, Homeowners File Lawsuit To Stop Foreclosures In Minnesota (Alleges Federal Modification Program Violates Constitutional Protections).

For the lawsuit, see Williams, et al. v. Geithner, et al.

For more information on this lawsuit or to read the filed documents, click here.