In 2009, Jennifer Castillo applied for a modification with her mortgage
servicer at the time, Bank of America, which she received the following
year after a dispute over the implementation of the modification. Before
the modification was executed, Bank of America transferred the loan to
Nationstar. The Castillos were assured that Nationstar would honor the
modification, but their subsequent payments were all rejected, and Nationstar
claimed the Castillos were in default. In 2015, Nationstar acknowledged
the errors, but did not make any corrections to the Castillos account,
continuing to overbill them.
The Castillos argued that Nationstar breached the modified contract by
rejecting their payments, charging amounts that were not due, and starting
foreclosure. Nationstar argued that they cured their alleged breaches,
and stated that a breach of contract without damage is not actionable.
The Castillos, however, stated that as a result of the breach, they suffered
an invasion of privacy, which drove them to file the suit.
Ultimately, the Castillos’ motions were granted in part and denied
in part. It was granted as to the issue of liability, but denied on the
issue of whether Nationstar can argue that it is not required to respond
to repetitive notices of error under the Real Estate Settlement Procedures Act (RESPA). RESPA was designed to protect potential homeowners and requires that
lenders provide more information to borrowers throughout the loan settlement process.
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