Oregon Case Survives BAC Home Loan Servicing Motion to Dismiss
By Daniel Edstrom
DTC Systems, Inc.
Thanks to Charles Cox for finding this one. This is amazing in and of itself since my information indicates that BAC Home Loans Servicing, LP ceased to exist on 7/1/2011.
Excerpt 1:
Second, Defendants argue that the loan modification agreement is subject to the statute of frauds and Plaintiff failed to plead that the loan modification agreement was subscribed by BAC. Under Oregon’s statute of frauds, an “agreement is void unless it… is in writing and subscribed by the party to be charged[.]” Or. Rev. Stat. § 41.580(1). Partial performance may, however, take a contract out of the statute of frauds. Strong v. Hall, 253 Or. 61, 70 (1969);Royer v. Gailey, 252 Or. 369, 373 (1969). Plaintiff’s allegation that BAC accepted partial payments as described under the loan modification agreement for five months is sufficient pleading at this stage to survive Defendants’ argument that the agreement failed to satisfy the statute of frauds.
Excerpt 2:
Finally, Defendants argue that Plaintiff “has pleaded no facts that the so-called loan modification is supported by consideration.” Def.’s MTD at 8 n.7. Defendants may be correct that reduced payments made under an oral loan modification agreement do “not represent ‘anything other than what the plaintiff was already obligated to do under the terms of the Loan. “, Vida v. One West Bank, FSB., No. 3: 1 0-cv-987, 2010 WL 5148473 *7 (D. Or. Dec. 13,2010) (quoting Barinaga v. JP Morgan Chase & Co., 749 F. Supp. 2d 1164, 1173 (D. Or. 2010)).
Accordingly, if a loan modification agreement only requires the borrower to make reduced payments, it might not be supported by consideration and might be unenforceable. That is not, however, the case here. The loan modification agreement signed by Plaintiff appears to have increased the amount that Plaintiff would owe as principal on her loan. The loan modification agreement states in paragraph one that the unpaid principal balance is $253,112.61. This is approximately $17,000 more than the original loan principal. Further, this amount “may include … any past due principal payments, interest, escrow payments, fees andlor costs[.]” Dkt. #14-1, Pg. 32. Thus, while her monthly payments may have temporarily decreased under the agreement, Plaintiffs total principal owing – and, accordingly, total interest owing – increased.5 That would appear to be adequate consideration, at least at the pleading stage.
Excerpt 3:
III. CONCLUSION
Defendants’ Motion to Dismiss (Dkt. #11) is DENIED.
IT SO ORDERED
Dated this 20th day of January, 2012
Download ruling here: http://dtc-systems.net/wp-content/uploads/2012/01/Sviridyuk_v_BAC_Home_Loan_Servicing.pdf
