Leonardo Arias v. Elite Mortgage Group, Inc
108 A.3d 21
| N.J. Super. Ct. App. Div. | 2015Background
- Arias and Padilla executed a mortgage on a two-family home to finance the purchase.
- The parties signed a Home Affordable Modification Trial Period Plan (TPP) under HAMP, containing conditions for a potential Modification Agreement.
- Plaintiffs, licensed real estate agents, contend the TPP created a contractual right to a loan modification.
- Bank of America granted and then denied the modification based on plaintiffs’ alleged failure to comply with TPP terms and other representations.
- The trial court granted summary judgment for the bank, finding no binding contract to modify and no viable CFA or good-faith claim.
- On appeal, the appellate court reviewed de novo and affirmed that the bank was entitled to judgment as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the TPP a binding contract to modify the loan? | Arias argues the TPP creates a contractual promise to modify if conditions are met. | Bank contends the TPP is not a modification contract and is unilateral, non-binding until conditions are satisfied. | TPP is a unilateral offer, not a binding modification contract. |
| Did plaintiffs breach the TPP by late or insufficient payments? | Arias/Padilla claim timely payments were made according to the plan. | Plaintiffs failed to make three timely trial payments and did not provide required documents. | Yes, plaintiffs breached the TPP by non/late payments, justifying denial of modification. |
| Does the record show any viable claim under the CFA or for bad-faith/fair-dealing? | Bank's handling of modification violated CFA and implied covenant of good faith. | The trial court did not err; the TPP terms control and do not allow modification absent compliance. | No viable CFA or good-faith claim; terms of the written agreement govern. |
Key Cases Cited
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (TPP creates unilateral offer to modify if conditions are met)
- Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013) (contract-based modification promises under TPPs)
- Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878 (9th Cir. 2013) (TPP terms as contract-like promises to modify upon compliance)
- Gonzalez v. Wilshire Credit Corp., 207 N.J. 557 (2011) (CFA concerns with post-foreclosure financing deals)
- Seaview Orthopaedics v. Nat'l Healthcare Res., Inc., 366 N.J. Super. 501 (App. Div. 2004) (adequacy of consideration and related contract principles)
- Glenfed Fin. Corp. v. Penick, 276 N.J. Super. 163 (App. Div. 1994) (duty of good faith and fair dealing does not alter written terms)