Wednesday, August 22, 2012

Barroso: nice old-fashioned HAMP decision

Some good things to be said about the common sense in old-fashioned property and contract law. (When it doesn't treat women as property, that is, but that's another subject.)

Today, for example, it's nice to see the case of Barroso v. Ocwen Loan Servicing, LLC decided in a foreclosed borrower's favor based largely on old contract law principles. Borrower who thought she had entered a HAMP loan modification deal, who thought she was keeping up her end, suddenly found her house had been foreclosed and resold behind her back. Loan company argued she had failed to meet some fairly frilly technical requirements. Court, urged on by several good nonprofits including the National Housing Law Project (NHLP) and the California Reinvestment Coalition, applied reassuringly straightforward contract law reasoning to rule partly in the borrower's favor, at least to let her case go forward.

The opinion at its best quoted this statement of general principle: "A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties."

I'm cherrypicking a little. The opinion also went partly in the loan company's favor over a slightly stupid-seeming question of whether a document had to be notarized.

But let's for the moment look on the bright side. Once in a while you still get to get what you thought you were getting because that's what you were led to think you were getting.

I'll leave the nitty-gritty to appear on the news pages of NHLP and the Cal Reinvestment Coalition, which it hasn't yet but I'm sure it will soon.

(The case is also available with free login at FindLaw. I found it by way of FindLaw's nice free case briefs email service.)

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