Federal Case Law

1. Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012):
   • Summary: This case involved a borrower who alleged that Wells Fargo failed to offer a permanent loan modification under HAMP despite successfully completing the trial period. The court held that borrowers could bring state law claims based on a lender’s failure to fulfill HAMP obligations.
   • Impact: Established that lenders’ failure to comply with HAMP guidelines could form the basis for state law claims, highlighting the importance of adhering to loss mitigation procedures.
2. Corvello v. Wells Fargo Bank, NA, 728 F.3d 878 (9th Cir. 2013):
   • Summary: Borrowers alleged that Wells Fargo breached its contractual obligations by denying permanent modifications after successful trial payments. The court ruled that lenders must honor trial period agreements if borrowers meet their obligations.
   • Impact: Reinforced lenders’ obligations to provide permanent modifications under HAMP when borrowers comply with trial agreements, emphasizing the enforceability of loss mitigation commitments.

Maryland Case Law

1. Shepherd v. Burson, 200 Md. App. 455 (2011):
   • Summary: The Maryland Court of Special Appeals ruled that lenders must strictly comply with notice requirements before foreclosure, including providing accurate information about loss mitigation options.
   • Impact: Emphasized the necessity of compliance with statutory notice requirements to proceed with foreclosure, protecting borrowers’ rights to explore loss mitigation.
2. Anderson v. Burson, 424 Md. 232 (2011):
   • Summary: The court held that lenders must have a proper chain of title to enforce foreclosure, including compliance with loss mitigation and notice provisions.
   • Impact: Highlighted the importance of clear title and adherence to loss mitigation requirements in foreclosure actions.

Virginia Case Law

1. Mathews v. PHH Mortgage Corp., 283 Va. 723 (2012):
   • Summary: The Virginia Supreme Court held that lenders must comply with notice requirements and provide borrowers with opportunities to cure defaults before foreclosure.
   • Impact: Reinforced the need for lenders to provide proper notice and explore loss mitigation options, ensuring borrower protection.
2. Bayview Loan Servicing, LLC v. Simmons, 275 Va. 114 (2008):
   • Summary: The court ruled that failure to provide accurate and timely notice to borrowers could invalidate foreclosure sales.
   • Impact: Underlined the critical nature of compliance with statutory notice requirements in Virginia foreclosure proceedings.

Washington, D.C. Case Law

1. Dixon v. Midland Mortgage Co., 719 F. Supp. 2d 53 (D.D.C. 2010):
   • Summary: The court found that lenders must engage in good faith mediation efforts under the D.C. foreclosure mediation program before proceeding with foreclosure.
   • Impact: Established the requirement for lenders to participate in mediation and explore loss mitigation options in D.C., ensuring borrower protection.
2. Winston v. Wells Fargo Bank, N.A., 2013 D.C. Super. LEXIS 12:
   • Summary: The court emphasized the importance of compliance with D.C.’s foreclosure mediation requirements and proper notice to borrowers.
   • Impact: Highlighted the role of mediation in foreclosure prevention and the necessity of adherence to legal requirements.

The regulatory landscape for foreclosure prevention and loss mitigation in the United States is complex, with federal and state laws imposing stringent requirements on lenders. Compliance with these regulations is critical for lenders to lawfully proceed with foreclosure actions. Courts have consistently enforced these requirements, emphasizing the importance of offering borrowers meaningful opportunities to avoid foreclosure through loss mitigation. Engaging in good faith efforts to explore all available options can prevent legal challenges and protect the rights of both lenders and borrowers.

This document outlines the key legal frameworks and case law that govern foreclosure prevention efforts, providing a comprehensive understanding of the obligations and protections in place. For lenders, adherence to these regulations is not only a legal requirement but also a crucial step in maintaining ethical and responsible lending practices.