Many delinquent borrowers have recently been attempting to assert claims against their loan servicers for failing to provide loan modifications under the Home Affordable Modification Program (“HAMP”), which was created by the U.S. Treasury Department as part of the Making Home Affordable Program. The Eleventh Circuit recently considered whether a private right of action even exists under HAMP.
In Miller v. Chase Home Finance, LLC, 677 F.3d 1113 (11th Cir. 2012), the Eleventh Circuit considered the claims of Jason Miller (“Miller”), who owned real property in Georgia that he purchased with the proceeds from a loan from Chase Home Finance, LLC (“Chase”). When Miller began experiencing financial difficulties, Chase granted him a temporary loan modification. However, Chase ultimately refused to provide a permanent loan modification to Miller. Miller then filed suit against Chase, asserting various common-law claims, all based upon Chase’s refusal to issue a permanent loan modification, which Miller claimed constituted a failure by Chase to comply with its obligations under HAMP.
The Eleventh Circuit ruled that neither HAMP, nor the Emergency Economic Stabilization Act of 2008 (“EESA”), 12 U.S.C. §§5201-5261 (pursuant to which HAMP was created), expressly provide a private right of action for borrowers against loan servicers. The Eleventh Circuit also considered whether or not an implied private right of action exists under HAMP. After applying the factors set forth in Hemispherx Biopharma, Inc. v. Johannesburg Consol. Inves., 553 F.3d 1351 (11th Cir. 2008), the Court determined that no implied private right of action exists under HAMP or EESA. Finally, the Eleventh Circuit determined that Miller’s claims, to the extent that they fell outside of the scope of HAMP, failed as a matter of law. Based upon the foregoing, the Eleventh Circuit affirmed the District Court’s order dismissing Miller’s complaint against Chase for failure to state a claim.
The Eleventh Circuit has made clear that a borrower does not have a private right of action, express or implied, under HAMP against a loan servicer for failing to provide a permanent loan modification.
The Eleventh Circuit’s opinion can be found here.