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You can argue, but can you sue?

A “right to argue” may not be enshrined in the U.S. Constitution, but it surely is dear to the hearts of Americans, as a new court case illustrates.

Unfortunately, a lender’s notice to a borrower that she had a “right to argue” about her mortgage default was not clear enough about her contract rights, leaving the lender on the hook in federal court.

The lender’s notice got a couple of things wrong, according to plaintiff Debra Wegner, who is suing a lender and a loan servicing company in Wegner v. Mfrs. & Traders Trust Co.

First, an acceleration notice – which Wegner said she never received – claimed she owed $10,610. By her reckoning, Wegner owed only $1,386. She said she readily could have brought the loan current, using her $10,000 retirement account or aid from her mother.

“Overstating the arrearage by such a wide measure” was enough to allege a breach of contract, said Richmond U.S. District Judge John A. Gibney.

The default notice told Wegner she had the “right to argue that you did keep the promises and agreements” under the note and deed of trust, the suit alleged.

“Unfortunately for the defendants, the deed of trust obligated M&T to notify the borrower that she could ‘bring court action,’ not just that she had the ‘right to argue,’” Gibney said.

“In our great country, married couples, baseball managers, philosophers, environmentalists, crackpots, talk show hosts, atheists, believers, retail customers, barbers, taxicab drivers, and – as relevant here – mortgage borrowers have a right to argue,” the judge wrote.

“But until things go really bad, most arguments do not result in lawsuits. A notice including the language ‘right to argue’ differs from a notice informing a borrower she may file a lawsuit to prevent acceleration and foreclosure,” the court concluded.

Gibney gave the greenlight to claims based on the alleged deficient notices, but dismissed Wegner’s claims for rescission and for damages.

He also said Wegner also stated a contract claim with her assertion that the defendants failed to try to conduct a face-to-face meeting prior to foreclosure.

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