You are here: / / No Private Right of Action for Homeowners Against Lenders Under the Home...
, , ,

No Private Right of Action for Homeowners Against Lenders Under the Home Affordable Modification Program (HAMP)—Home Affordable Modification Program Was Not Enacted Solely for the Benefit of Homeowners(?)

The Second Department, after finding that the doctrine of judicial estoppel did not apply because there was no final determination adopting the plaintiff’s contrary position in the first litigation, determined the federal Home Affordable Modification Program (HAMP), enacted pursuant to the Emergency Economic Stabilization Act of 2008 (EESA), did not create a private right of action against a lender or loan servicer.  The lender had denied plaintiff’s application for a permanent HAMP loan modification and plaintiff’s brought suit alleging breach of contract (re: a trial period plan or TPP), fraud in the inducement, promissory estoppel and a violation of General Business Law 349:

When, as here, a statute does not provide an express private right of action, the courts will imply a private right of action only upon examination of the following three factors: (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme” … .

As to the first factor, the Emergency Economic Stabilization Act of 2008 (12 USC §§ 5201-5261; hereinafter the EESA), which authorized the United States Department of the Treasury to promulgate the HAMP, was enacted “to immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States” (12 USC § 5201[1]) and “to ensure that such authority and such facilities are used in a manner that (A) protects home values, college funds, retirement accounts, and life savings; (B) preserves homeownership and promotes jobs and economic growth; (C) maximizes overall returns to the taxpayers of the United States; and (D) provides public accountability for the exercise of such authority” (12 USC § 5201[2]). Similarly, Section 201(a)(2)(A)(i) of the Helping Families Save Their Homes Act of 2009 (111 P.L. 22, § 201[a][2][A][i], 123 Stat 1632, 1638) simply articulated a Congressional finding that, in order to reduce the number of foreclosures and stabilize real property values, mortgage lenders should be given authorization to modify mortgage loans consistent with applicable guidelines promulgated by the United States Department of the Treasury pursuant to EESA. Thus, although financially struggling homeowners may derive a benefit from the HAMP, that program was not promulgated solely for their particular benefit … . As to the second factor, the underlying purpose of the HAMP is to incentivize mortgage loan servicers to reduce monthly mortgage payments and, thus, prevent avoidable home foreclosures … . Accordingly, a private right of action against a lender or loan servicer arising from an alleged breach of a TPP agreement is inconsistent with the purpose of HAMP, as judicial recognition of such a private right of action would deter lenders and loan servicers from participating in the HAMP … . As to the third factor, the EESA expressly provides for civil actions by the Secretary of the Treasury (see 12 USC § 5229[a][1]) and for actions seeking equitable relief against the Secretary of the Treasury (see 12 USC § 5229[a][2], [3]), but makes no reference to private rights of action by borrowers against mortgage lenders or loan servicers. Moreover, given that, as noted above, private rights of action could conceivably deter lenders and loan servicers from participating in the HAMP, which would, in turn, undermine the HAMP’s purpose, allowing for a private right of action would be inconsistent with the legislative scheme of EESA. Since the plaintiffs’ claims here are intertwined with the defendants’ alleged obligations under the HAMP, and as no private right of action exists under the HAMP, the Supreme Court should have granted the defendants’ motion to dismiss the amended complaint on the ground that it failed to state a cause of action… . [emphasis added]  Davis v Citibank NA, 2014 NY Slip Op 02557, 2nd Dept 4-16-14

 

You might also like
THE BANK IN THIS FORECLOSURE ACTION WAS NOT REQUIRED TO DEMONSTRATE IT WAS A LICENSED DEBT COLLECTION AGENCY PURSUANT TO THE NYC ADMINISTRATIVE CODE; THE BANK DID NOT ATTACH THE BUSINESS RECORDS NECESSARY TO DEMONSTRATE DEFENDANT’S DEFAULT (SECOND DEPT).
INSURER’S ACTION FOR A DECLARATORY JUDGMENT THAT IT WAS NOT OBLIGATED TO INDEMNIFY THE DEFENDANT SCHOOL DISTRICT FOR A SETTLEMENT REACHED IN AN UNDERLYING ACTION (WHICH ALLEGED THE SCHOOL DISTRICT DID NOT PROTECT AGAINST ANTI-SEMITIC HARASSMENT) SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).
IN THIS HOTEL-ROOM SLIP AND FALL CASE, THE OUT-OF-POSSESSION LANDLORD WAS NOT OBLIGATED BY CONTRACT OR COURSE OF CONDUCT TO REPAIR DANGEROUS CONDITIONS AND THE LESSEE OF THE HOTEL DEMONSTRATED IT DID NOT HAVE CONSTRUCTIVE OR ACTUAL NOTICE OF THE WATER ON THE BATHROOM FLOOR IN PLAINTIFF’S ROOM; DEFENDANTS ENTITLED TO SUMMARY JUDGMENT (SECOND DEPT).
SUPREME COURT SHOULD NOT HAVE REQUIRED DEFENSE COUNSEL TO SEEK COURT APPROVAL BEFORE ALLOWING INVESTIGATORS OR OTHER EMPLOYEES ACCESS TO RECORDINGS (SECOND DEPT).
PLAINTIFF IN THIS LABOR LAW 240(1) ACTION FELL FROM AN INVERTED BUCKET HE WAS STANDING ON TO REACH A POWER CABLE; DEFENDANTS DEMONSTRATED THERE WAS NO NEED FOR PLAINTIFF TO ELEVATE HIMSELF TO DO HIS JOB; THEREFORE PLAINTIFF WAS THE SOLE PROXIMATE CAUSE OF HIS INJURY (SECOND DEPT).
Account Stated Criteria Met
THE CUSTODY AWARD SHOULD NOT HAVE BEEN MADE, SUA SPONTE, WITHOUT A PLENARY HEARING; WHERE A CUSTODY AWARD IS MADE WITHOUT A HEARING THE COURT SHOULD ARTICULATE THE FACTORS CONSIDERED (SECOND DEPT). ​
THE RECORD SUPPORTED A NEGLECT FINDING BASED UPON FATHER’S ABUSE OF MOTHER, FAMILY COURT REVERSED.

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Allegations of Wrongdoing Insufficient to Support Shareholders Derivative Action... Application for Undue Hardship Exception to Medicaid Ineligibility Should Have...