In a lawsuit which sought out class-action status, Minnesota home owners claimed that they had a right to indeed receive a loan modification.
The wording of the lawsuit alleged that the current administration's plan to prevent foreclosures was in violation of a borrower's constitutional rights. Home owners who are turned down for a loan modification are not required to be sent a written denial notice, and are not given the opportunity to appeal a denial. The lawsuit sought to have all foreclosures pending on home owners who would be eligible to participate in the government's foreclosure prevention program halted until safeguards and a formalized appeal process are put into place.
The Judge who handed down the decision in this case stated that loan modifications were not an entitlement, and that the United States Treasury Department has given mortgage companies discretion in the evaluation of the borrower's that come to them for loan modification assistance.
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