Statement of Eric Halperin, CRL Senior Litigation Counsel and Deputy Director
"This morning's New York Times reported that a federal court in Manhattan has declined to take action on a lawsuit pending between Countrywide Financial Corporation and certain mortgage investors. Nothing in the court's decision casts any doubt on mortgage servicers' legal ability to modify distressed loans. Instead, Judge Holwell's decision merely determines that this pending case should be decided by a New York state court, not in federal court as Countrywide had requested. Judge Holwell made this decision without ruling on any of Countrywide's defenses to the lawsuit.
Loan modifications are essential to turning around the current financial crisis, and the number of modifications continues to be dwarfed by the number of foreclosures. We hope that servicers, who are already using 'investor refusal' as a scapegoat for denying modifications, will not use the purely procedural decision in this case as a further excuse to refuse to modify loans."
For more information: Kathleen Day at (202) 349-1871 or firstname.lastname@example.org; Ginna Green at (510) 379-5513 or email@example.com; or Charlene Crowell at (919) 313-8523 or firstname.lastname@example.org.