Foreclosure suit tossed by judge

Last update: November 10, 2009 - 11:35 PM

A federal judge Monday dismissed a class action lawsuit trying to halt foreclosures in Minnesota until the Obama administration's foreclosure-relief program is reformed.

However, the attorney for the group of homeowners says they still won some significant victories.

In July, the St. Paul-based nonprofit Foreclosure Relief Law Project filed a suit accusing the U.S. Treasury of failing to notify people when they were denied a modification or giving them a chance to appeal. The group asked for an injunction against all foreclosures in Minnesota until additional safeguards are put in place.

However, U.S. District Judge Ann Montgomery said in a ruling that Congress did not make loan modifications an entitlement. Because of that, lenders aren't required to explain why a modification request has been denied.

But the Treasury Department has in recent months addressed many of the concerns raised in the suit. This includes giving people written notice within 10 days after their loan modification is denied; halting foreclosures when a loan modification decision is challenged; and providing homeowners with some of the data related to their denials.

CHRIS SERRES