In 2007, HPP launched its Foreclosure Relief Law Project, with a mission of expanding homeowner rights through high impact litigation and assisting local governments and community groups in addressing the impacts of the foreclosure crisis.  Now, as HPP’s Foreclosure Project winds down, the results are a mix of wins and losses, but with a number of solid lasting accomplishments. 

In the early years of the project, HPP helped the City of St. Paul get the attention of the large loan servicers who were neglecting foreclosed homes, causing neighborhood blight.   HPP also initiated lawsuits on behalf of neighborhood groups under innovative legal theories to gain control of nuisance homes.  HPP counseled over 400 homeowners facing foreclosure, and filed a number of path-breaking lawsuits under new state laws.  Sometimes HPP even won by losing, such as in HPP’s class action challenge to the Treasury Department’s HAMP program (the federal program providing for loan modifications instead of foreclosures).  Although the Court ultimately ruled against HPP’s claims that program rules denied homeowners due process, prior to the ruling, the Treasury Department adopted new homeowner protections, apparently in response to the lawsuit.  In another case involving predatory lending, the court went so far as to remove the mortgage altogether from the home, awarding HPP’s client the home free and clear of the mortgage.

More recent results have been mixed.  A class action challenge to efforts by banks to shortcut legal procedures through “A to D “mortgage assignments is ending inconclusively with a settlement of the individual plaintiff’s claims.  HPP’s ongoing efforts to provide a means of legally enforcing loan servicer obligations under the HAMP program continue to be stymied, following an unfortunate trend in rulings around the country.  In Gretsch v. Vantium Capital, the Minnesota Court of Appeals recently rejected the homeowner’s argument that Minnesota law regulating mortgage servicers provides a means of enforcing HAMP obligations the servicer failed to follow.  (A petition to the Minnesota Supreme Court is pending.)   In Trombley v. SunTrust Mortgage, however, HPP persuaded a federal court judge to uphold key claims under the federal Truth in Lending Act (TILA).  The court ruled that providing a homeowner with two conflicting sets of financial disclosures can provide grounds to rescind the loan and mortgage, and also removed an important roadblock for the homeowner to exercise that right.