Wells Fargo Bank N.A. v. Raviv
A court can find that a bank that allegedly modifies a loan and then refuses to accept payment pursuant to the loan modification has breached its contract. In 2006, the defendant, Khen Raviv, allegedly borrowed $277,200 and signed a mortgage deed and note. Raviv suffered from business reversals, and he applied to modify the loan while he remained current on his payments. The bank agreed to forbearance. Raviv resumed monthly mortgage payments in October 2009 and then filed for bankruptcy protection in December 2009 under Chapter 7 of the U.S. Bankruptcy Code. The bank offered to modify the loan in February 2010 and allegedly failed to send the modification to Raviv. The plaintiff bank then canceled the loan modification and claimed that Raviv was in default. "The plaintiff," wrote the court, "told the defendant that he had violated the terms of the mortgage modification proposal because he had not returned signed documents that the plaintiff had sent to him, when in fact, the plaintiff has now admitted that it never sent the defendant those documents." When the plaintiff bank recognized its mistake, it argued that the defendant violated the bank's proposal, because the defendant did not inform the plaintiff bank about the discharge in bankruptcy. The court concluded that the plaintiff bank's conduct resulted in unfair treatment to the defendant. The February 2010 contract to modify the mortgage was valid, because the defendant complied with the terms and informed the bank about his acceptance. "The plaintiff by rejecting this modification and the July, 2010, payment from the defendant under the modification," wrote the court, "breached its contract with the defendant." The court ordered the bank to comply with the terms of the February 2010 contract. A foreclosure action is an action in equity that requires clean hands. The plaintiff bank lacked clean hands and cannot proceed in equity. The court granted judgment to the defendant, who may request attorneys' fees pursuant to Connecticut General Statutes §42-150bb.