HAMP does not Create Private Cause of Action
The Eleventh Circuit Court of Appeals recently held that the Home Affordable Modification Program (“HAMP”) does not create a private cause of action.
the parties had a temporary modification in place, and athough the two parties agreed to a temporary modification, the lender then indicated that it would not extend a permanent loan modification to the borrower.
The borrower sued, alleging that the lender had not complied with its obligations under HAMP. The borrower alleged breach of contract and promissory estoppel, among other claims, in connection with his HAMP allegations.
HAMP does not expressly create a private right of action for borrowers, the Eleventh Circuit began its analysis by reviewing the relevant factors to determine whether HAMP might create an implied right of action: (1) whether the plaintiff is one of the class for whose “especial benefit” the statute was enacted; (2) whether there is any indication of legislative intent for or against the creation of a private right of action; (3) whether an implied remedy for the plaintiff is consistent with the purposes of the statute; and (4) whether the cause of action is one traditionally relegated to state law.
After consideration of those factors, the Eleventh Circuit held that “it is clear that no private right of action exists” under HAMP.
The Court found the purpose of the Emergency Economic Stabilization Act of 2008 and HAMP, was to “restore liquidity and stability to the financial system of the United States.” 12 U.S.C. Sec. 5201(1). Further, the Court found no evidence of legislative intent to create a private right of action.
http://www.ca11.uscourts.gov/opinions/ops/201115166.pdf
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