The Eleventh Circuit affirmed a lower court’s decision rejecting liability for servicers under the federal Home Affordable Modification Program for failing to extend a permanent loan modification. After experiencing financial difficulties, plaintiff sought and received a temporary loan modification. After approximately a year under the temporary loan modification program, the servicer notified plaintiff that it would not permanently extend the loan modification. Plaintiff filed suit alleging the servicer failed to comply with its obligations under HAMP by declining to issue him a permanent loan modification.
In upholding the lower court’s decision, the Eleventh Circuit held that neither the Emergency Economic Stabilization Act of 2008 nor HAMP “expressly create a private right of action for borrowers against loan servicers.” The Eleventh Circuit also held that there was no implied right of action under HAMP, using the factors articulated in Hempispherx Biopharma, Inc. v. Johannesburg Consol. Inves., 553 F.3d 1351, 1362 n. 14 (11th Cir. 2008). Click here for the opinion.