Kenneth Hagans fights to save client's home

Staff Attorney Kenneth Hagans

Staff Attorney Kenneth Hagans

Kenneth Hagans, staff attorney in Maryland Legal Aid's Metropolitan office, represented a client in what seemed like a routine Chapter 7 Bankruptcy case. However, Kenneth ended up in a fight to save his client's home. In July 2014, Kenneth filed Chapter 7 Bankruptcy on behalf of his client, Ms. B., who came to Maryland Legal Aid for help with debts and to get a fresh financial start. Before she filed for bankruptcy, Ms. B. had entered into a Home Affordable Modification Program (HAMP) agreement with CitiMortgage. Ms. B. had paid the initial trial payments to CitiMortgage under the HAMP agreement by having the mortgage payments automatically withdrawn from her bank account. Everything proceeded normally with Ms. B.'s bankruptcy case, and the 341 Meeting of Creditors was held in September 2014.

Ms. B. later informed Kenneth that her mortgage payment had not been withdrawn from her bank account since May 2014 and that when she called CitiMortgage about the issue, CitiMortgage told her that they were no longer the mortgage lien holder on her property and that her mortgage had been transferred to a new mortgage lien holder called Seterus, Inc. When Ms. B. contacted Seterus to make her mortgage payment for the month of June 2014, Seterus told her that they would not honor the HAMP agreement she had entered into with CitiMortgage.

Seterus claimed that Ms. B.'s account was delinquent and the company then sent her fake documents to try and prove that Ms. B. was behind on her mortgage payments. Kenneth collected all of Ms. B.'s documents to show that she had a valid HAMP agreement, including the signed and executed HAMP agreement between Ms. B. and CitiMortgage and bank statements for the months of December 2013 through May 2014 that showed mortgage payments had been withdrawn from Ms. B.'s bank account by CitiMortgage.

After various failed attempts to resolve the matter with Seterus via telephone correspondence, Kenneth conferred with colleagues Vicki Taitano (then FLAP Project Manager) and Heather Gomes (then FLAP Staff Attorney) and drafted a Complaint alleging Breach of Contract, Violation of the Federal Consumer Fair Debt Collection Act, and other counts. Kenneth filed his complaint on December 23, 2014 in the United States Bankruptcy Court, naming as defendants CitiMortgage, Seterus, Inc. and the Federal National Mortgage Association.

After negotiations, the case ultimately settled on April 16, 2015. Seterus, Inc. agreed to honor Ms. B.'s previous HAMP agreement, to pay her $2,000 and to allow her to keep the entire $13,286.46 in mortgage payments that she had saved from June 2014 through April 2015. The defendants also agreed to pay $2,000 in attorney's fees to Maryland Legal Aid.