previous blog, we reported that national mortgage loan servicer Residential Credit Solutions
(RCS) was ordered to pay punitive damages totaling $1.6 million in a case
brought by Alena Hammer, an Illinois resident who endured unnecessary
and harassing foreclosure actions over a period of three-and-a-half years.
Last week, on December 3, 2015, RCS’s post-trial motions for judgment
came before the United States District Court’s Eastern Division. In a
memorandum opinion and order penned by District Judge Thomas M. Durkin, he explains why RCS’s
motions as a matter of law, a new trial, and remittitur have been denied.
As a reminder, the facts of the case are as follows:
- 63-year-old Alena Hammer began having mortgage troubles in 2009. Her mortgage
servicer, AmTrust Bank, initiated foreclosure proceedings, but they were
stayed after the FDIC took over as receiver for AmTrust. The FDIC then
worked with Hammer to avoid foreclosure by restructuring her payments.
What they did not initially tell her was that they had charged her more
than $2,300 in fees, which added to the loan’s principal balance
and subsequently increased her monthly payments.
- After making her first two payments, Hammer was notified that the loan
was being transferred to RCS. She soon after made a Loan Modification
Agreement with the FDIC, which decreased the amount owed by the FDIC’s
added fees. However, RCS did not recognize the agreement as valid, informing
Hammer that she would need to sign yet another agreement with them. She
refused and continued mailing her payments to RCS on time and in full
based on the agreement she had made with the FDIC. RCS returned each check
uncashed, demanding that she pay an additional $300+ more per month based
on the terms of her original AmTrust loan. They then initiated foreclosure
- After retaining the services of attorneys at Sulaiman Law Group, LTD, who
were successful in getting the motion dismissed, Hammer and RCS still
could not reach a resolution. She then filed a lawsuit against the collector.
Durkin decided that none of the arguments advanced by RCS were sufficient
to support reducing the amount of compensation they owe Hammer, nor to
support tossing out the verdict. Although Hammer never physically signed
the loan modification made with the FDIC, Durkin agreed that repeated
communications between the two parties was enough to acknowledge the agreement’s
validity. According to Durkin, RCS’s arguments to the contrary,
“overlook the nature of contracts and the governing principles of
contract law.” He also chastised RCS for deliberately misstating
the reasons for Hammer’s lawsuit against them, saying that RCS chose
to employ a tactical decision to stand on technicalities related to the
formation of the contract rather than acknowledge evidence of the loan
modification agreement made before they purchased Hammer’s debt
from the FDIC.
This is a significant victory not just for Ms. Hammer and Sulaiman Law
Group, LTD, but for all people who pay a mortgage. This decision shows
that mortgage servicers who engage in shady and unethical practices will
be held accountable for their misdeeds.
View the Complete Court Order
If you are facing wrongful foreclosure actions,
contact a Chicago foreclosure defense attorney at Sulaiman Law Group, LTD to consult with our attorneys.