legally binding contract issue

[eddiep]

I had posted earlier that lender is claiming that they did not sign my loan mod before I filed, although the loss mit dept said it was.... and are now saying they will not honor it.

I just found this on another websit but don't know how to intrepret it. The loan modification agreement was sent and recieved in NY. They have accepted and incorrectly applied three payments. Two of them since I recieved and signed the agreement. Would this apply to me? Can anybody help me find the statutes that apply to my situation?

It might come as a surprise to you, but in New York , unless a signature is required by statute, you don't necessarily have to sign an agreement for it to be valid. If you and the other party in some other way indicate consent to the contract, you are both bound.

[HHM]

Note, it says, if "you and the other party"...from the way you describe it, the bank never really complied with the terms of the modification. (improperly applied payments, etc).

What you are describing goes by many names and it is not based on statute. It is a common law principal of implied contract. For example, if X loans Y $5,000, and Y makes $200 per month payments for 12 months (and there is no documents or signature), Y can't later stop making payments and claim the $5,000 from X was a gift. Reason being, Y has "acted" in a such a way (by making payments) as if a loan existed. Thus, the court will enforce the verbal loan agreement as a contract.

But, let's assume this would work for you, you would need to sue in state court for breach of contract and force them to comply. Are you prepared (and can you afford) to do that? Also, you may run into a statutory problem with mortgages, specfically, in most states mortgages (really, anything to do with real estate) must be in writting and must be signed to be valid. In this case, statute might overule common law even if you had a shot at implied contract.

[eddiep]

My attorney told me this would be addressed during the bk in a AP if they press the issue, so no, I guess this wouldn't apply to me. He has told me several times that he would have them pay his fees.

Very interesting day though. Today I spoke with another bk dept rep who totally disagreed with what the other two bk reps had told me and even got a team leader involved to clarify that the information she was giving was correct. She said that there must be a staff training issue going on for them to have told me that the agreement would not be honored unless the mod was complete and in fact it was completed two weeks before I filed.

She said that they have recently changed their policy and that once the mod was approved they would honor the agreement unless there was a specific clause in the terms of agreement that stated it would be void if I filed bk and mine did not.

She also told me that because I have filed for bk they are unable to apply my payments, because they were initially applied incorrectly they had to reverse the payments and had to put them in a suspension account until the judge gives them permission to apply them. My lawyer had a good laugh at that one. He said that is bull, they applied the payments on the other loans right? So they can reverse payments but not apply them? He said I hope they say that in court. He said there is no way he is going to allow them to lift the stay to apply payments. He believes that my mod is safe and that their motivation is to get me to sign a reaffirmation agreement.

He also feels that they are so disorganized that they will not be able to put together any kind of case that will hold up in court.