The U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal of a borrower’s claim, holding that a mortgage servicer’s motion to reschedule a previously set foreclosure sale after it approved the borrower for a trial loan modification plan did not violate the federal Real Estate Settlement Procedures Act because the motion to reschedule did not move for an order of sale.
A copy of the decision in Landau v. RoundPoint Mortgage Servicing Corp. is available at: Link to Opinion.
A borrower defaulted on her mortgage loan and her lender filed a foreclosure action. The lender obtained final summary judgment in its favor and set a foreclosure sale date. The sale date was continued several times to allow the borrower to apply for a loan modification.
The servicer approved a trial modification plan that required six monthly payments, but instead of cancelling the foreclosure sale outright, moved to reschedule the sale due to the ongoing loss mitigation efforts. The borrower responding by filing a motion to cancel the sale noting that she had made the first of the six required payments on her loan modification plan. The foreclosure court granted the borrower’s motion and cancelled the sale.
Subsequently, the borrower sent the servicer a notice of error under 12 C.F.R. § 1024.35 of Regulation X alleging that the servicer had violated section 1024.41(g) by only moving to reschedule the sale because it did not take all “reasonable steps” to cancel the sale.
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