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Miller v. Bank of America Home Loan Servicing, L.P.

Superior Court of New Jersey, Appellate Division

March 5, 2015

PAUL and BARBARA MILLER, Plaintiffs-Appellants,
v.
BANK OF AMERICA HOME LOAN SERVICING, L.P., [1] Defendant-Respondent

Argued: December 1, 2014.

Approved for Publication March 5, 2015.

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-1930-11.

Joseph A. Chang argued the cause for appellant ( Joseph A. Chang & Associates, LLC, attorneys; Mr. Chang, of counsel and on the briefs; Jeffrey Zajac, on the briefs).

Aaron M. Bender argued the cause for respondent ( Reed Smith LLP, attorneys; Mr. Bender, of counsel and on the brief).

Before Judges LIHOTZ, ESPINOSA and ST. JOHN. The opinion of the court was delivered by LIHOTZ, P.J.A.D.

Page 138

[439 N.J.Super. 542] OPINION

LIHOTZ, P.J.A.D.

When defendant Bank of America Home Loan Servicing, L.P. declined to modify the loan obligation of plaintiffs Paul and [439 N.J.Super. 543] Barbara Miller under the federal Home Affordable Modification Program (HAMP) and referred the account for commencement of foreclosure, plaintiffs filed this

Page 139

action, alleging breach of contract, violation of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, promissory estoppel, and breach of the covenant of good faith and fair dealing. Following discovery, defendant moved for summary judgment. Upon review, the Law Division judge concluded there was no private cause of action under HAMP and dismissed plaintiffs' complaint with prejudice. Plaintiffs' subsequent motion for reconsideration was denied.

On appeal, plaintiffs challenge the summary judgment dismissal and denial of reconsideration as erroneous, arguing HAMP does not preclude pursuit of valid state law claims arising from the parties' agreement. Plaintiffs also assert the record presented disputed facts requiring jury review. They ask us to vacate summary judgment and reinstate their complaint.

Subsequent to entry of the summary judgment order, this court considered a similar matter. See Arias v. Elite Mortg. Grp., Inc., __ N.J.Super. __, 439 N.J.Super. 273, 108 A.3d 21 (2015). Following our review of the legal issue presented, we, like the panel in Arias, conclude HAMP's preclusion of private causes of action would not prevent a borrower from pursuing state law claims arising from the breach of an underlying temporary contractual arrangement pending the lender's review under the HAMP guidelines. Id. Analyzing the record, we affirm the order granting summary judgment because no material factual dispute was presented and the evidence of record failed to support plaintiffs' alleged claims.

I.

We recite the facts taken from the summary judgment record, as viewed in the light most favorable to plaintiffs, the non-moving parties. Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405-06, 98 A.3d 1173 (2014).

On September 1, 2006, plaintiffs refinanced their residential mortgage debt, obtaining a $540,000 adjustable rate loan from Old [439 N.J.Super. 544] Merchants Mortgage, Inc., d/b/a OMMB. When the loan payment increased, plaintiffs stopped making payments.

In 2009, the loan servicer, Countrywide Home Loan Servicing, L.P. (Countrywide), informed plaintiffs they could apply for consideration of a loan modification agreement under HAMP, a program created by the Emergency Economic Stabilization Act, 12 U.S.C.A. § § 5201-5261 (2008). The federal statute created the Troubled Asset Relief Program (TARP), which authorized the Secretary of Treasury to " implement a plan that seeks to maximize assistance for homeowners and . . . encourage the servicers of the underlying mortgages . . . to take advantage of . . . available programs to minimize foreclosures." 12 U.S.C.A. § 5219(a)(1). " Pursuant to this authority, in February 2009[,] the Secretary set aside up to $50 billion of TARP funds to induce lenders to refinance mortgages with more favorable interest rates and thereby allow homeowners to avoid foreclosure." Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir. 2012).[2] The monies were earmarked for HAMP, which was designed to aid qualified homeowners facing foreclosure. Arias, supra, __ N.J.Super. at __. (citing Wigod, supra, 673 F.3d at 556-57).

Under HAMP, mortgage loan servicers enter into an agreement with the Secretary of Treasury to ...


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