Javascript is not enabled.

Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.

CitiMortgage HAMP Litigation, AARP Foundation Brief Supports Right to ... Skip to content

AARP Brief Supports Right to Enforce Mortgage Modification Contracts

Home mortgage borrowers seeking to modify their mortgage loans under the Home Affordable Modification Program (HAMP)  who were denied the opportunity to challenge CitiMortgage’s failure to make a timely decision on their applications are being supported by AARP.


Home mortgage borrowers who sought loan modifications pursuant to the federal Home Affordable Modification Program (HAMP) sued CitiMortgage, alleging that the servicer failed to make timely decisions on their applications for loan modifications, pursuant to standard form contract language. The contracts established a three month trial period plan during which borrowers would need to demonstrate their ability to make their modified mortgage payments. It also required CitiMortgage to decide at the end of the three months whether the borrowers met the requirements for a permanent loan modification.

Borrowers alleged on behalf of a class of similarly situated homeowners that CitiMortgage failed to make timely decisions, and often took as long as twelve months to decide whether to permanently modify a loan.  As a result of CitiMortgage’s delay, some borrowers who demonstrated they were eligible for modifications alleged that they lost their homes unnecessarily, and others alleged they were forced to pay higher fees and suffer greater damage to their credit scores over a longer period of time.

CitiMortgage opposed certification of the class, claiming that issues individual to each borrower required them to proceed on an individual basis. The court agreed with CitiMortgage that individual issues precluded class certification, noting for example that damages for each homeowner would need to be individually calculated.

AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief with the National Association of Consumer Advocates in this case.  The brief points out that the individual issues identified by the trial court can be resolved on a class wide basis, because contract law sets some standard rules. Moreover, the lawsuit did not challenge whether CitiMortgage made incorrect decisions about a borrower’s eligibility for a loan: it made no decision either way.   Finally, AARP’s brief argued that the  amount of damages to which each homeowner would be entitled can easily be established based on a mathematical formula as per state law. Indeed, many other courts have certified class actions to address similar claims.   

Class actions allow courts to remedy wrongful corporate practices in a single lawsuit – often the only way people can effectively challenge widespread business practices as the individual harms may be too small to attract competent legal help.

What’s at Stake

Foreclosure is a significant problem for older homeowners: approximately 1.5 million families headed by a person over age 50 lost their home to foreclosures between 2007 and 2011. Older people living under the threat of foreclosure are often targeted by foreclosure rescue scams that promise to help save homes but leave the homeowner in worse financial condition. HAMP was designed to modify mortgages quickly in order to stabilize the housing market, which continues to drag down the entire world economy. Until mortgage servicers live up to their obligations to timely modify mortgages, the entire economy remains at risk while the foreclosure crisis drags on.

Case Status

In re CitiMortgage HAMP Litigation is before the U.S. Court of Appeals for the Ninth Circuit.