Oskoui v. J.P.Morgan Chase Bank, N.A.

A home loan borrower could survive summary judgment on her claims for breach of contract and violation of the unfair competition law based on deceptive processing and denial of the borrower’s loan modification applications, since servicer should have known from the beginning that borrower’s loan exceeded eligibility guidelines yet reviewed her three times anyway.  A borrower adequately alleged and submitted sufficient evidence to support, as against Chase’s summary judgment motion, claims for breach of contract and violation of the UCL based on Chase’s deceptive processing and denial of the borrower’s three successive loan modification applications.  From the outset Chase should have realized that the $822,000 loan balance exceeded HAMP eligibility guidelines.  It also concluded on its review of the borrower’s first loan modification application that the borrower’s income was insufficient and the modification did not satisfy Chase’s NPV test.  But in denying her first application, Chase mentioned only the insufficient income reason and encouraged her to reapply and send in three more trial plan payments.  Then it divulged only one more reason for denying the application, and repeated the process for a third time.  This deceptive and unfair conduct arguably violated the UCL and constituted a breach of the contract formed by entry into the trial payment plan.

Ninth Circuit Court of Appeals (Trott, J.); March 13, 2017; 2017 WL 957206

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