Banks MUST Keep A Promise!

In what would seem obvious to most people, A California appellate court announced this past Thursday that if a bank makes you a promise not to foreclose without first making a legitimate attempt to do a loan modification, it has to keep that promise. Duhh! Well, it wasn't obvious to US Bank, who broke exactly that type of promise and took a woman's home from her by foreclosure. Seems the lady had taken out an adjustable 30 year mortgage mortgage on her LA home in 2006. After a couple of years, she couldn't afford the monthly payments required by the loan. US Bank did what any bank in these circumstances would do--they filed an NOD and started the foreclosure process rolling. The lady upped the ante by filing for bankruptcy, hoping that by doing a Chapter 13, she'd keep the house and be allowed to repay the bank over a longer period. According to her, the bank then offered her a deal she couldn't refuse. If she dropped the bankruptcy action, they'd sit down with her and put together a loan mod that would allow her to keep her home while making payments she could afford. Sounds pretty reasonable, don't you think?
What happened next, you ask. She unfortunately took the bank at its word, dropped the BK filing and five days later to show their gratitude, the bank scheduled a foreclosure auction for a month later without telling her. The day before the auction, she says the bank did call her and offer to let her stay if she agreed to a new loan at higher payments. What a deal!! The foreclosure took place and the bank got the house, after which it evicted the woman.
Did she take this lying down? Would you? She called lawyer and sued the bank. Round 1: bank wins at trial and her suit gets thrown out. But as with any fight, barring a KO, there are more rounds to follow. She appealed and, as noted above, she won on appeal, a unanimous 3-0 decision by the appellate court. The court said US Bank had acted in bad faith by its actions, and, while not giving the lady her home back, reinstated her suit against the bank for damages. Stay tuned for the final decision on how much she receives in the actual suit.
A word of advice on this if you are in a similar situation: this is a California court decision and is not necessarily binding on other states' courts, but a promise is (or at least should be) a promise. Check with your own counsel (if you can't afford a lawyer, call Legal Aid) for its possible applicability to your own situation--and good luck.