SAN DIEGO (CN) – A La Jolla man can keep his home for now, after a federal judge granted his motion for a temporary restraining order blocking Washington Mutual and JP Morgan from foreclosing on his house because the banks misled him into defaulting on his mortgage.
Kaveh Khast claimed the banks instructed him to stop making his mortgage payments so he could qualify for a loan modification.
A Washington Mutual representative confirmed receipt of the documents, but did not contact Khast within two months as promised. After learning JP Morgan Chase had acquired Washington Mutual, Khast contacted JP Morgan Chase, and a representative told him he needed to submit another application. Meanwhile, he resumed making his monthly mortgage payments.
“At some unspecified time thereafter, plaintiff contacted the JP Morgan Chase agent assigned to plaintiff’s loan modification to inquire about the status of plaintiff’s property insurance and taxes,” Chief U.S. District Judge Irma Gonzalez wrote. “An agent of JP Morgan Chase informed plaintiff that he would have to file a fourth application to modify his loan … JP Morgan Chase quickly denied plaintiff’s fourth application and issued a notice of trustee’s sale for the property.”
Because the bank told him to stop making his payments and to default on his loan, Gonzalez found that Khast was irreparably harmed and entitled to an order temporarily halting foreclosure proceedings.
“If the sale of plaintiff’s property proceeds as scheduled, plaintiff will lose his home,” Gonzalez wrote. “Even if defendants were ultimately to prevail, a temporary restraining order will only force them to delay the sale of the property by a matter of days.”