The decision came in response to a lawsuit by Minnesota home owners that maintained that borrowers had a right to loan modifications. The lawsuit sought class-action status.
The lawsuit alleged that the Obama administration’s foreclosure prevention plan violated borrowers’ constitutional rights because home owners who were denied help under the program weren’t given a written denial and an opportunity to appeal. The suit sought to halt foreclosures on home owners eligible for the Obama plan until the government put in place certain procedural safeguards, such as creating a formal appeals process.
In Monday's decision, U.S. District Court Judge Ann Montgomery said that modifications weren’t an entitlement and pointed out that the Treasury Department gave mortgage companies discretion in evaluating the borrowers it helps.
Source: The Wall Street Journal, Ruth Simon (09/11/2009
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