The Montana Supreme Court recently entered a decision in Morrow v. Bank of America, N.A., that may help Montanans who have experienced abuse or misconduct at the hands of their mortgage loan servicers and/or are in the foreclosure process.
The homeowners in the case, the Morrows, made several claims in District Court against Bank of America about the servicing of their mortgage. Several claims related to discussions between bank employees and the Morrows, such as instructions to the Morrows to skip a payment intentionally and to ignore notices of acceleration. The Morrows also asserted that bank employees repeatedly told them over the phone that they were approved for a modification, but they received letters denying their applications for modification and ultimately received notice of a scheduled trustee’s sale of their property.
The District Court granted summary judgment to the bank on all of the Morrows’ claims, in essence ending their suit without any relief for them.
The Morrows appealed to the Montana Supreme Court, asking that the summary judgment on their claims be reversed. MLSA filed an amicus (friend of the court) brief with the Montana Supreme Court, supporting the Morrows’ appeal. During oral argument, the justices asked the attorneys for the Morrows and the bank questions about MLSA’s brief, including questions about the nature of a mortgage servicer’s duty to a borrower.
On May 7, the Montana Supreme Court reversed the District Court's order with respect to several of the homeowners’ claims, including actual fraud, constructive fraud, negligent misrepresentation, negligence, and violation of the Montana Consumer Protection Act. This means the Morrows can now take those claims to trial. The decision allows the Morrows a chance to have a jury decide their claims and opens the door to other homeowners with similar claims to try their cases. It also clarifies several aspects of Montana law about the standards mortgage servicers must meet, and will help to promote servicers’ compliance with those standards in the future.