Borrower Must Be Offered A Permanent Loan Modification When They Comply With A Trial Period Plan.

After her home loan went into default, plaintiff agreed to a trial period plan [TPP], a form of temporary loan payment reduction under the Home Affordable Mortgage Program [HAMP]. Plaintiff complied with the TPP, making timely reduced monthly payments. Nonetheless, the bank denied her a permanent loan modification, and plaintiff’s home was sold at a trustee’s sale just two days after bank allegedly told her no foreclosure sale was scheduled. Plaintiff brought an action against the bank, and the trial court sustained the bank’s demurrer without leave to amend. The appellate court reversed, holding that plaintiff stated causes of action for fraud, negligent misrepresentation, breach of written contract, promissory estoppels and unfair competition. The appellate court stated that core to its decision is “that when a borrower complies with all the terms of a TPP, and the borrower’s representations remain true and correct, the loan servicer must offer the borrower a permanent loan modification.  As a party to a TPP, a borrower may sue the lender or loan servicer for its breach.”  West v. JPMorgan Chase Bank  (Cal. App. Fourth Dist., Div. 3; March 18, 2013) 214 Cal.App.4th 780.