A Minnesota woman, who claimed an oral promise from a lender not to foreclose on her home was enough to save her home from default, lost at the Eighth Circuit Court of Appeals in late May. The court ruled that any promises related to foreclosure need to be in writing in order to be valid.

The case — Brisbin v. Aurora Loan Services — centered around the court's interpretation of Minnesota's Credit Agreement Statute.

The takeaway from the case is that the 8th Circuit believes the statute does not allow a borrower to prevent a lender from enforcing an existing credit relationship on oral promises to delay a foreclosure. Essentially, the court held that under Minnesota law, an oral agreement to postpone a foreclosure sale is not survivable in court due to the language of the MCAS statute.

The homeowner, Alison Brisbin, filed suit against Aurora Loan Services, Mortgage Electronic Registration Systems and the Freddie Mac after she contacted her lender for a loan modification in September 2009 and obtained an oral commitment that the lender would postpone the foreclosure sale until it had a chance to review her loan modification request, court records say.  

Brisbin claims the foreclosure sale was never postponed, and the foreclosure sale took effect on the originally scheduled date of Oct. 23, 2009.

Brisbin claimed in her original lawsuit that the language of the MCAS statute, which was designed to prevent borrowers from using their existing relationship with a lender to stop the enforcement of an agreement, does not apply when there is an oral promise made.

But the court disagreed, finding an oral agreement cannot trump a written agreement regarding foreclosures.

The court also ruled against Brisbin on claims of negligent and intentional misrepresentation and allegations the lender violated the state's postponement under the foreclosure-by-advertisement statute.