If it didn’t happen in writing . . . it didn’t happen. That’s what the California Court of Appeal recently told plaintiffs seeking to avoid foreclosure. According to Lisa Yun and Alejandro Moreno on Sheppard Mullin’s Financial Institutions Blog, the top California court ruled that an oral promise to modify a loan was not valid.
In the case, Rossberg v. Bank of America, the plaintiffs had multiple loans on their residence and fell behind on their payments. They went to Bank of America and asked about loan modification, say the authors. The plaintiffs contend that they were orally granted a permanent modification, but no documents confirming this were ever in the works. During a changeover of staff at the bank, a new trustee issued a notice of default on the loan and the plaintiffs sued, alleging that it was a breach of the oral contract.
