Even though a bank pressing a residential foreclosure action failed to negotiate in good faith during mandatory settlement conferences, a judge’s remedy of compelling a loan modification was "unauthorized and inappropriate," according to a Brooklyn appellate court.
"The courts may not rewrite the contract that the parties freely entered intothe loan and mortgage agreementsupon a finding that one of those parties failed to satisfy its obligation to negotiate in good faith," Justice Thomas Dickerson (See Profile) of the Appellate Division, Second Department, wrote for a unanimous panel. The ruling in Wells Fargo Bank v. Meyers, 2011-00482, held that the lower court’s order that Wells Fargo Bank abide by the original loan modification agreement violated the U.S. Constitution’s contract clause and the bank’s due process rights. The lower court also directed that the foreclosure action be dismissed.
