A class action lawsuit has been filed against Saxon Mortgage Inc., the Morgan Stanley mortgage servicer division, claiming that the company uses the Homeowners Affordable Modification Program (HAMP) to lure customers into making “trial” payments on loans it has no intention of ever permanently modifying. The suit, titled Gaudin v. Saxon Mortgage Services Inc., was filed in the Northern District of California Federal Court by Peter Fredman of the Law Office of Peter Fredman and Daniel Mulligan of Jenkins Mulligan & Gabriel LLP. The suit alleges a pattern of misconduct by Saxon of collecting trial payments, delaying the processing of loan modifications, and then denying the application altogether for demonstrably false reasons. The lead plaintiff, Marie Gaudin, the owner of a San Francisco bridal boutique that suffered hard times as a result of the recession brought on by the mortgage crisis, asked Saxon for loan modification on her underwater Daly City home. Gaudin was directed to Saxon’s “Home Preservation Department” and provided extensive documentation of her financial condition. Saxon assured her it was “committed to assisting you in any way we can to complete the [the loan modification]. We want to help!” It sent her a written agreement that seemed to promise a permanent HAMP loan modification after she made three “trial” payments to prove she could. The complaint notes that Saxon instead delayed the processing of the loan modification, while urging her to continue making trial payments. After receiving numerous trial payments and fulfilling the rest of her obligations under the agreement, Saxon denied her a permanent modification falsely claiming that she had failed to make payments or comply with document requests. Saxon’s correspondence with Gaudin shows a pattern of inaccurate and irresponsible behavior on the part of a major global bank. The company claimed that she did not make payments, while in the same letter actually acknowledged that she was current on all payments. It also claimed that the U.S. Treasury Department was involved in reviewing HAMP applications. “Saxon and Morgan Stanley are taking advantage of the good faith and intentions of distressed borrowers,” said Fredman. “If they don’t want to give modifications, fine, they should face the political music and the flood of foreclosures that will result when all their underwater borrowers give up hope. But tricking them into wasting their time and money applying for a modification that Saxon has absolutely no intention of handing out is a deceptive debt collection practice plain and simple.” The class action alleges that Saxon’s breach of contract, rescission and restitution, deceptive debt collection practices violated California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) and fraudulent, unlawful, and unfair business practices under California’s Unfair Competition Law (UCL).