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US BANK NATIONAL ASSOCIATION v SARMIENTO | NY Appellate Div, 2nd Dept. – we hold that the Supreme Court properly concluded that the plaintiff failed to negotiate in good faith and that the Supreme Court had the authority to sanction the plaintiff for that failure

US BANK NATIONAL ASSOCIATION v SARMIENTO | NY Appellate Div, 2nd Dept. – we hold that the Supreme Court properly concluded that the plaintiff failed to negotiate in good faith and that the Supreme Court had the authority to sanction the plaintiff for that failure

Supreme Court of the State of New York
Appellate Division: Second Judicial Department

D39377
W/hu
AD3d Argued – June 6, 2013
REINALDO E. RIVERA, J.P.
PETER B. SKELOS
JOHN M. LEVENTHAL
PLUMMER E. LOTT, JJ.

2012-03513 OPINION & ORDE

2014 NY Slip Op 05533
 

US BANK NATIONAL ASSOCIATION, ETC., Appellant,
v.
JOSE SARMIENTO, Respondent, ET AL., Defendants.

 

2012-03513, Index No. 11124/09.
 

Appellate Division of the Supreme Court of New York, Second Department.

 

Decided July 30, 2014.
 

Hogan Lovells US LLP, New York, N.Y. (David Dunn and Nathaniel E. Marmon of counsel), for appellant.

 

Fuster Law, P.C., Long Island City, N.Y. (J. A. Sanchez-Dorta of counsel), for respondent.

 

Before: Reinaldo E. Rivera, J.P. Peter B. Skelos John M. Leventhal Plummer E. Lott, JJ.

 

APPEAL by the plaintiff, in an action to foreclose a mortgage, from so much of an order of the Supreme Court (Leon Ruchelsman, J.), dated December 19, 2011, and entered in Kings County, as, upon a finding that the plaintiff failed to negotiate in good faith during settlement conferences conducted pursuant to CPLR 3408, granted the motion of the defendant Jose Sarmiento to bar the plaintiff from collecting interest or fees that accrued on the subject loan since December 1, 2009, to bar the plaintiff from recovering from him any costs or attorneys’ fees it incurred in this action, and to direct the plaintiff to review the issue of whether the subject loan may be eligible for a loan modification pursuant to the Home Affordable Modification Program by employing correct information and without regard to interest or fees that have accrued on the subject loan since December 1, 2009.

 

LEVENTHAL, J.

 

OPINION & ORDER

 

On appeal in this mortgage foreclosure action, the plaintiff contends that the Supreme Court erred in determining that it failed to negotiate in good faith during mandatory settlement conferences conducted pursuant to CPLR 3408, and that, in any event, the Supreme Court lacked the authority to impose any sanctions against it on the ground that it violated the “good faith” requirement of CPLR 3408(f). In addressing these contentions, we set forth the proper standard for determining whether a party acted in good faith pursuant to CPLR 3408(f). Further, we hold that the Supreme Court properly concluded that the plaintiff failed to negotiate in good faith and that the Supreme Court had the authority to sanction the plaintiff for that failure.

 

In May 2009, the plaintiff, as successor trustee to Bank of America, National Association (Successor by Merger to LaSalle Bank National Association), as trustee for Morgan Stanley Mortgage Loan Trust, 2007-2AX, commenced this action in the Supreme Court, Kings County, to foreclose a mortgage secured by residential property located in Brooklyn. In the complaint, the plaintiff alleged that the defendant homeowner, Jose Sarmiento, defaulted on the subject mortgage by failing to make the monthly payment due on October 1, 2008. The plaintiff elected to call due the entire amount secured by the mortgage, in the principal sum of $578,388.75, plus interest at an annual rate of 8.25%, accruing from September 1, 2008. Issue was joined by Sarmiento’s service of a pro se verified answer dated July 17, 2009, which was accompanied by a notice to produce documents.

 

In an affidavit, Sarmiento averred that, in May 2008, he lost much of his monthly income and that, as a consequence, he was unable to make his monthly mortgage payment due on October 1, 2008, and the payments due thereafter. In September 2008, Sarmiento contacted America’s Servicing Company (hereinafter ASC), the mortgage servicing agent of the lender, and a wholly owned subsidiary of Wells Fargo Bank, N.A. (hereinafter together ASC/Wells), in order to discuss a loan modification. Sarmiento was told that he did not qualify for a loan modification because he had insufficient income. In February 2009, Sarmiento found an additional tenant for the subject property, and began receiving monthly rental income in the sum of $4,652. According to Sarmiento, notwithstanding his augmented income, ASC/Wells repeatedly refused to modify his loan.

 

In September 2009, this matter was referred to a Court Attorney Referee for a mandatory settlement conference pursuant to CPLR 3408. Sarmiento initially appeared pro se at the settlement discussions, and later obtained pro bono counsel. ACS/Wells, through their counsel,[1] appeared at the settlement discussions on behalf of the plaintiff. From September 14, 2009, to January 14, 2011, 18 settlement conferences were held. What transpired during the settlement conferences is detailed in the report of the Court Attorney Referee, dated April 20, 2011.

 

The Court Attorney Referee’s Report

 

The report of the Court Attorney Referee set forth the following facts. On October 29, 2009, Sarmiento submitted to ACS/Wells a Home Affordable Mortgage Program (hereinafter HAMP) application[2]. On November 18, 2009, upon the request of ASC/Wells, Sarmiento submitted updated financial documents. According to the Court Attorney Referee, Sarmiento met the basic criteria for HAMP eligibility since: (1) the subject property was a one-to-four-family residence; (2) Sarmiento’s monthly mortgage payment of principal, interest, property tax, and insurance exceeded 31% of his gross monthly income; and (3) the principal balance of the loan was equal to or less than $729,750.

 

At a settlement conference held on November 30, 2009, ASC/Wells confirmed that it had received Sarmiento’s HAMP application and his updated financial documents, and represented that it would make a decision on the application within one week, even though it had 30 days to make that decision. Upon her review of Sarmiento’s income, the Court Attorney Referee directed him to set aside the sum of $2,000 per month beginning December 1, 2009, to demonstrate his good faith and his ability to make modified mortgage payments and, if necessary, to use as a down payment on a non-HAMP, traditional loan modification.

 

First HAMP Denial

 

By letter dated January 12, 2010, ASC/Wells denied Sarmiento’s HAMP application on the ground that he did not reside at the subject property as his primary residence. After Sarmiento asserted that there was no factual basis for ASC/Wells to have concluded that the property was not his primary residence, ASC/Wells conceded that Sarmiento resided at the property.

 

At a settlement conference conducted on February 2, 2010, ASC/Wells reported that Sarmiento’s HAMP application was complete and still under review. ASC/Wells asserted, however, that it required a broker’s price opinion (hereinafter BPO) to determine the value of the property, which was necessary before a Net Present Value (hereinafter NPV) test could be conducted under HAMP. The NPV test would determine whether a loan modification or a foreclosure sale was more lucrative to the mortgage lender/investor.

 

Second HAMP Denial

 

By letter dated April 2, 2010, ASC/Wells advised Sarmiento that his HAMP application was again denied, this time on the ground that an affordable monthly payment amount—equal to or less than 31% of gross monthly income—could not be reached. In an email message from ASC/Wells’s counsel to Sarmiento’s counsel, ASC/Wells stated that Sarmiento’s HAMP application was denied because of a monthly income deficit of $1,100. According to the Court Attorney Referee, “Servicer ASC/Wells was evaluating . . . Sarmiento for a [HAMP] modification using the wrong income figures, although the defense thoroughly documented the employment and rental income that . . . Sarmiento and his wife earned each month.” By letter dated April 7, 2010, Sarmiento’s counsel informed ASC/Wells of this error, and referred ASC/Wells to Sarmiento’s previously submitted pay stubs, bank statements, and rental agreements, which reflected a gross monthly income of $6,303. Sarmiento’s counsel further requested a denial notice with greater specificity than set forth in the denial letter of April 2, 2010. Pursuant to Sarmiento’s rights under HAMP, his counsel requested that ASC/Wells produce the inputs and data that ASC/Wells used in performing the NPV test.

 

In an email message dated April 9, 2010, ASC/Wells advised Sarmiento’s counsel that it had never conducted an NPV test on Sarmiento’s HAMP application because the file had not reached the NPV calculation phase, and that the denial was “due to [an inability to] reach an affordable payment.” By letter dated April 12, 2010, Sarmiento’s counsel reiterated his objections to the HAMP denials, and requested “that ASC/Wells comply with HAMP guidelines and complete its modification review.”

 

At a settlement conference held on April 13, 2010, and by letter dated April 22, 2010, Sarmiento requested a proper review of his HAMP application. According to the Court Attorney Referee, ASC/Wells replied that it “had misplaced income documentation” and that some other documentation had become “stale.” As a consequence of its characterization of the status of the documentation, ASC/Wells requested that Sarmiento submit a new HAMP application. The Court Attorney Referee instructed Sarmiento’s counsel to resubmit and update the HAMP application, and directed “ASC/Wells to escalate and expedite the HAMP review.” Sarmiento submitted an updated HAMP application to ASC/Wells on April 26, 2010.

 

Third HAMP Denial

 

At a settlement conference held on May 11, 2010, ASC/Wells reported that it had “escalated” review of Sarmiento’s HAMP application, and that such review was still incomplete. Two days later, however, ASC/Wells informed Sarmiento’s counsel, in an email message, that it was again denying his HAMP application “due to not being able to reach affordability.” The email message further stated the “this property is not affordable,” and requested Sarmiento’s counsel to “refer the borrower to our liquidations department for further foreclosure prevention options.” According to the Court Attorney Referee, the email message dated May 13, 2010, “failed and refused to demonstrate that Sarmiento was ineligible for a HAMP modification.”

 

By letter dated May 28, 2010, Sarmiento’s counsel requested more specific information about the denial, and again demanded the inputs and data that ASC/Wells used to conduct the NPV test in connection with Sarmiento’s HAMP application. ASC/Wells did not provide the requested information. The Court Attorney Referee observed that, “[a]lthough HAMP guidelines require production of the NPV inputs upon request so that borrowers can review the propriety of a denial and challenge the accuracy of the NPV inputs, Services ASC/Wells ignored[] the written requests [from Sarmiento's counsel] for the data, and failed to produce the NPV values. Indeed, ASC/Wells failed to demonstrate that an NPV test had, in fact, been run.”

 

As set forth in the report of the Court Attorney Referee, on June 2, 2010, Sarmiento filed a formal complaint against ASC/Wells with the HAMP support center on the ground that ASC/Wells refused to properly assess his HAMP application. On June 8, 2010, the HAMP support center advised Sarmiento that ASC/Wells had denied his HAMP application because he had $25,000 in liquid assets, which exceeded the maximum limit. The report of the Court Attorney Referee noted, however, that the $25,000 reflected funds which she had previously directed Sarmiento to set aside.

 

Nevertheless, at a settlement conference held on July 1, 2010, ASC/Wells reported that Sarmiento’s HAMP application was “still under review,” and that this review would be completed no later than two weeks after that date. ASC/Wells added that the funds that Sarmiento set aside at the direction of the Court Attorney Referee would not affect his HAMP application. Sarmiento’s counsel made a third request for the inputs and data that ASC/Wells used in the NPV test; ASC/Wells replied that it “did not have the NPV inputs because the latest denial related to a non-HAMP modification.” The Court Attorney Referee adjourned the settlement conference until July 19, 2010, to await the results of ASC/Wells’s review of Sarmiento’s HAMP application.

 

At the settlement conference held on July 19, 2010, ASC/Wells reported that it had not completed its HAMP review. Moreover, consistent with the statement of the HAMP support center dated June 8, 2010, counsel for ASC/Wells reported that ASC/Wells had previously denied Sarmiento’s HAMP application because of “excess resources.” The Court Attorney Referee stated that, “[i]n light of the repeated delays, the baseless denials, and obvious mishandling of the loan file by both ASC/Wells and [counsel for ASC/Wells] before a HAMP review was even done, I directed an ASC/Wells representative with personal knowledge and settlement authority to appear in person at the next settlement conference.”

 

At the next settlement conference, which was held on September 14, 2010, Eliza Melendez of ASC/Wells appeared, and explained that “Sarmiento’s HAMP application was still under review and that a new BPO was required to value the [property] for the NPV test.” The Court Attorney Referee described Melendez as having limited knowledge of Sarmiento’s file, and no settlement authority. Sarmiento’s counsel asserted that ASC/Wells should waive at least nine months of accrued interest because of the “inexplicable delays” in ASC/Wells’s HAMP review. The Court Attorney Referee directed the vice president of ASC/Wells to personally appear at the next settlement conference.

 

The next settlement conference was held on September 28, 2010. At that time, Tracy Brooks, a Loan Administration Manager in the Home Preservation Department of ASC/Wells, personally appeared, and she reported that the HAMP review was incomplete because Sarmiento had not submitted certain documents. However, when Brooks accessed Sarmiento’s loan file on her personal laptop computer, she confirmed that the file was complete. Upon Brooks’s request, she was allowed to review the file overnight. The next day, Brooks reported that ASC/Wells needed a property tax bill and a copy of Sarmiento’s property insurance declaration page, and that she was expediting the HAMP review.

 

At the next settlement conference, which was held on October 5, 2010, ASC/Wells offered a traditional, non-HAMP loan modification, in which the annual percentage rate (hereinafter APR) was lowered from 8.25% to 4%. ASC/Wells explained that it “had not made a HAMP offer because it was still trying to figure out what to do’ about the informal escrow account that . . . Sarmiento had set aside at [the Court Attorney Referee's] direction.”

 

Fourth HAMP Denial

 

Meanwhile, according to the Court Attorney Referee, “ASC/Wells sent . . . Sarmiento a denial letter [dated October 6, 2010], erroneously and preposterously stating that he was denied a HAMP modification because he was current on his mortgage loan and not at risk of default.

 

At a settlement conference held on October 12, 2010, ASC/Wells “reported for the first time that an NPV test had been run and that [Sarmiento] had failed,” meaning that a HAMP modification would not be more favorable to the plaintiff than a foreclosure sale. ASC/Wells provided none of the data or inputs it had used to conduct the NPV test, and reiterated its offer of a traditional, non-HAMP loan modification. Sarmiento rejected the non-HAMP loan modification as unaffordable.

 

A few weeks later, in an email message dated November 2, 2010, ASC/Wells provided some of the data and inputs it had used to conduct the NPV test. According to the Court Attorney Referee, this data showed that ASC/Wells conducted the NPV test in November 2010, which was 25 months after Sarmiento defaulted, and one year after ASC/Wells had initially denied Sarmiento’s HAMP application. The Court Attorney Referee calculated that, as a result of ASC/Wells’s delay, more than $40,000 in arrears accrued on the loan.

 

On November 5, 2010, ASC/Wells offered Sarmiento a second traditional, non-HAMP modification, in which the APR was initially dropped to 2%, but then increased to 4%. Sarmiento rejected that offer.

 

At a settlement conference held on January 14, 2011, ASC/Wells stated that it would make no further modification offers. ASC/Wells then retained Hogan Lovells, LLP (hereinafter Hogan) as cocounsel to Steven J. Baum, P.C., in anticipation of a hearing pursuant to CPLR 3408 before the Supreme Court to determine whether it had failed to negotiate in good faith. According to the Court Attorney Referee, at that conference, Hogan acknowledged that ASC/Wells had handled Sarmiento’s loan “poorly,” but stated that ASC/Wells could not “do anything for . . . Sarmiento because of excessive forbearance.”

 

No progress on a settlement was made in three subsequent settlement conferences. With the parties at an impasse, the Court Attorney Referee directed them to submit position statements for use in the preparation of the report. In her report, the Court Attorney Referee determined that the plaintiff and ACS/Wells had failed to negotiate a loan modification in good faith, and had not complied with HAMP guidelines. Thus, the Court Attorney Referee recommended, inter alia, that the Supreme Court conduct a hearing to determine whether sanctions should be imposed against the plaintiff and ASC/Wells and its counsel.

 

Sarmiento’s Motion for an Award of Sanctions

 

By notice of motion dated June 17, 2011, Sarmiento moved to bar the plaintiff from collecting interest or fees accrued on the subject loan from December 1, 2009, “to date,” to bar the plaintiff from collecting from him any attorney’s fee or costs incurred “to date” in this action, and to direct the plaintiff to review the subject loan for a HAMP modification using an unpaid principal balance that excluded interest, fees, and costs that had accrued from December 1, 2009, “to date.” In support of his motion, Sarmiento submitted, inter alia, his counsel’s affirmation, to which were appended, as exhibits, an affidavit from Sarmiento, excerpts from a handbook entitled “Making Home Affordable Handbook for Servicers of Non-GSE Mortgages,” letters and copies of email messages between ASC/Wells and Sarmiento that were sent during 2010, and a proposed order. In an affirmation, Sarmiento’s counsel argued that the conduct of ASC/Wells demonstrated an “egregious refusal to negotiate in good faith, including its repeated delays and baseless denials of Mr. Sarmiento’s request for a modification in violation of HAMP guidelines.”

 

The Plaintiff’s Opposition

 

In opposition to Sarmiento’s motion, the plaintiff submitted, inter alia, an affidavit from Kyle N. Campbell, Vice President of Loan Documentation for ASC/Wells.

 

Campbell averred as follows: on February 18, 2010, the plaintiff received all documents necessary to review Sarmiento’s HAMP application. By letter dated April 2, 2010, the application was denied because Sarmiento’s debt-to-income ratio exceeded HAMP limits, inasmuch as his monthly expenses were $7,823.64 and his monthly income was only $4,728.94. After receiving additional financial documents in late April 2010, the plaintiff again reviewed the loan file but, by letter dated May 13, 2010, Sarmiento’s HAMP application was again denied, as was the possibility of a traditional, non-HAMP loan modification, because his debt-to-income ratio remained excessive, specifically, he had monthly income of $3,839.91, and monthly expenses of $7,253.22.

 

In September 2010, the plaintiff offered Sarmiento a non-HAMP loan modification, lowering the APR of the loan from 8.25% to 4%. Sarmiento rejected that offer, as it was not made pursuant to HAMP. In response, the plaintiff made a second non-HAMP loan modification offer, in which the APR of the loan would be initially lowered to 2% and gradually increased to 4%. Sarmiento also rejected that offer. Campbell asserted that the plaintiff could not offer any further modifications because of Sarmiento’s “limited income and his delinquency in making any payments under the loan for more than two years.”

 

On August 2, 2011, the parties stipulated, among other things, that Sarmiento’s motion seeking, inter alia, to bar the plaintiff from collecting interest or fees that accrued on the subject loan since December 1, 2009, would be decided without an evidentiary hearing.

 

The Order Appealed From

 

Based upon the papers submitted, the Supreme Court, in the order appealed from, inter alia, granted Sarmiento’s motion to bar the plaintiff from collecting interest or fees that accrued on the subject loan since December 1, 2009, to bar the plaintiff from recovering any costs or attorneys’ fees it incurred in this action, and to direct the plaintiff to review the subject loan for a HAMP loan modification using correct information and without regard to interest or fees that have accrued on the subject loan since December 1, 2009. The Supreme Court determined that, while the plaintiff had failed to negotiate in good faith as required by CPLR 3408(f), Sarmiento had acted in good faith. The court determined that, while Sarmiento and his counsel acted quickly and had been in contact with the plaintiff and ASC/Wells, the plaintiff and ASC/Wells has failed to respond to Sarmiento’s “requests for very basic information” related to his HAMP application, and their counsel’s communications with Sarmiento had sown confusion, distress, and doubt by including, among other things, confusing and vague rejection notices and requests for duplicative documents. The court stated:

 

“To describe the Plaintiff’s attitude succinctly: it was happy to do equity when it brought the underlying action for foreclosure, but stubbornly refused to do equity when as a result of statute (CPLR 3408), it was forced to sit down at the negotiating table with the homeowner and attempt to work out a deal. Put otherwise, the only delay’ that is legal in a foreclosure action is the delay imposed by CPLR 3408, and good faith means participating honestly, cleanly, and mutually in that delay’ process. Otherwise, this Court may exercise its equitable powers to restrict any remedy otherwise available.”

 

The plaintiff appeals.

 

HAMP

 

The federal response to the mortgage foreclosure crisis included the creation of HAMP, which arose as part of the Emergency Economic Stabilization Act of 2008 (12 USC §§ 5201 et seq.) and the Helping Families Save Their Homes Act of 2009 (Pub L 111-22, § 1[a], 123 Stat 1632, 1632 [111th Cong, 1st Sess, May 20, 2009]) (see JP Morgan Chase Bank, N.A. v Ilardo, 36 Misc 3d 359, 366 [Sup Ct, Suffolk County]). HAMP is administered by the Federal National Mortgage Association (hereinafter Fannie Mae), as an agent of the United States Treasury Department (see id. at 366). The purpose of HAMP “is to provide relief to borrowers who have defaulted on their mortgage payments or who are likely to default by reducing mortgage payments to sustainable reduced levels, without discharging any of the underlying debt” (id.).

 

Fannie Mae entered into agreements with numerous home loan servicers, including Wells Fargo, pursuant to which the servicers “agreed to identify homeowners who were in default or would likely soon be in default on their mortgage payments, and to modify the loans of those eligible under the program” (Wigod v Wells Fargo Bank, N.A., 673 F3d 547, 556 [7th Cir]). HAMP provides lenders and loan servicers an incentive “to offer loan modifications to eligible homeowners” (Young v Wells Fargo Bank, N.A., 717 F3d 224, 228 [1st Cir]; see Edwards v Aurora Loan Servs., LLC, 791 F Supp 2d 144, 148 [D DC] [explaining that, under HAMP, the United States Treasury Department "pay(s) financial incentives to servicers and loan owners/investors that are sufficient to make a HAMP modification a better financial outcome than foreclosure for the servicer and investor"]).

 

When a borrower applies for a HAMP loan modification, the first step is to determine HAMP eligibility, which includes, among other things, consideration of whether the subject loan originated prior to January 1, 2009, the subject property is improved by a one-to-four-family house, the borrower resides in the house, and, prior to modification, the borrower’s monthly mortgage payment exceeded 31% of the borrower’s verified gross monthly income (see Making Home Affordable Handbook for Servicers of Non-GSE Mortgages vers 3.2, ch 2, § 1.1 [HAMP Eligibility Criteria]). If the initial HAMP eligibility criteria are met, upon the borrower’s submission to the servicer of the required financial information, the servicer must apply a “waterfall,” i.e., a multiple-step process that is to be applied in a particular sequence, one step at a time, which here involves a five-step review of the terms of the loan to determine whether modification of one or more of those terms might reduce the monthly mortgage payment to no more than 31% of the borrower’s gross monthly income. The five steps of the standard waterfall, in the order in which they are to be applied, are capitalization modification, interest rate reduction, term extension, principal forbearance, and principal forgiveness (see Making Home Affordable Handbook for Servicers of Non-GSE Mortgages vers 3.2, ch 2, § 6.3 [Standard Modification Waterfall]; see also Edwards v Aurora Loan Servs., LLC, 791 F Supp 2d at 149). Deviations from the standard waterfall are not precluded and, under certain circumstances, servicers may offer borrowers modifications more favorable than those required under HAMP (see Making Home Affordable Handbook for Servicers of Non-GSE Mortgages vers 3.2, ch 2, § 6.3.6 [Variation from Standard Modification Waterfall]).

 

Moreover, “[a]ll loans that meet HAMP eligibility criteria and are either deemed to be in imminent default or delinquent as to two or more payments must be evaluated using a standardized NPV test that compares the NPV result for a modification to the NPV result for no modification” (Making Home Affordable Handbook for Servicers of Non-GSE Mortgages vers 3.2, ch 2, § 7]; see Edwards v Aurora Loan Servs., LLC, 791 F Supp 2d at 149 [citations omitted]). Using the standard modification waterfall, if the NPV test result under the modification scenario is greater than the NPV test result without modification, the result is deemed “positive” and the servicer “must offer the [HAMP] modification” (Making Home Affordable Handbook for Servicers of Non-GSE Mortgages vers 3.2, ch 2, § 7]). If the opposite occurs, the result is deemed “negative,” and the servicer, with the express permission of the investor, has the discretion to offer the HAMP modification (id.). If, after a negative result, the servicer opts not to offer the borrower a modification, it “must send a Non-Approval Notice and consider the borrower for other foreclosure prevention options” (id.).

 

CPLR 3408(f) and Good Faith

 

We now turn from the federal response to the financial crisis, and address New York’s response to the 2008 mortgage crisis. New York’s response included the enactment of CPLR 3408, a remedial statute which required that, “in residential foreclosure actions involving the type of loans within the ambit of that section, in which the defendant was a resident of the subject property, the court would hold a mandatory conference for settlement discussions” (Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9, 17; see L 2008, ch 472; CPLR 3408).

 

In 2009, CPLR 3408 was amended by, among other things, requiring mandatory settlement conferences in mortgage foreclosure actions involving any home loan in which the defendant is a resident of the subject property—regardless of when the home loan was made—and requiring both the plaintiff and defendant to negotiate in “good faith” to reach a resolution of the action, including, if possible, a loan modification (L 2009, ch 507, § 9, amending CPLR 3408[a] and adding CPLR 3408[f]). The Chief Administrator of the Courts thereafter promulgated 22 NYCRR 202.12-a, a regulation setting forth the rules and procedures governing CPLR 3408 settlement conferences (see 22 NYCRR 202.12-a [directing the court to "ensure that each party fulfills its obligation to negotiate in good faith"]). “The purpose of the good faith requirement [in CPLR 3408] is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution” (2009 Mem of Governor’s Program Bill, Bill Jacket, L 2009, ch 507, at 11). While the aspirational goal of negotiations pursuant to CPLR 3408 is that the parties “reach a mutually agreeable resolution to help the defendant avoid losing his or her home” (CPLR 3408[a]), the statute requires only that the parties enter into and conduct negotiations in good faith (see Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638). In its present form, CPLR 3408 provides, in pertinent part, as follows:

 

“(a) In any residential foreclosure action involving a home loan . . . in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference . . . for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate.

 

“(f) Both the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible” (CPLR 3408[a], [f] [emphasis added]).

 

A review of the legislative history does not reveal any discussion of the “good faith” standard envisioned by the Legislature (see L 2009, ch 507).

 

On this appeal, the plaintiff essentially argues that a party to a mortgage foreclosure action can only be found to have violated the good-faith requirement of CPLR 3408(f) when that party has engaged in egregious conduct such as would be necessary to support a finding of “bad faith” under the common-law. The plaintiff maintains that it did not engage in any egregious conduct such as gross negligence or intentional misconduct and, therefore, it satisfied the good-faith requirement of CPLR 3408(f).

 

In the absence of a statutory definition of “good faith,” we must first determine whether a lack of good faith should be measured by the common-law standard of bad faith or by a plaintiff’s failure to comply with HAMP guidelines. No published decision appears to specifically define “good faith,” as that term is employed in CPLR 3408(f). In Wells Fargo Bank, N.A. v Van Dyke (101 AD3d at 638-639), the Appellate Division, First Department, rejected a plaintiff mortgagee’s argument that compliance with the good faith requirement of CPLR 3408 is established “merely by proving the absence of fraud or malice on the part of the lender,” and briefly addressed the issue of what constitutes “good faith” by noting that “[a]ny determination of good faith must be based on the totality of the circumstances” taking into account that CPLR 3408 is a remedial statute. However, the standard to apply in determining what constitutes a lack of good faith pursuant to CPLR 3408(f) is a matter of first impression in this Court (cf. IndyMac Bank, F.S.B. v Yano-Horoski, 78 AD3d 895, 896 [the plaintiff did not challenge "bad faith" determination on appeal, but only contested the sanction of cancellation of the debt]).

 

A review of various trial-level court decisions shows that courts have not required a showing of intentional misconduct, malice, or gross negligence when determining whether a party has failed to negotiate in good faith as required by CPLR 3408(f). For example, one court observed that good faith is a subjective concept, generally meaning honest, fair, and open dealings, and a “state of mind motivated by proper motive” (HSBC Bank USA v McKenna, 37 Misc 3d 885, 905 [Sup Ct, Kings County] [internal quotation marks omitted]). Unreasonable, arbitrary, or unconscionable conduct is inconsistent with the statutory purpose of good faith negotiations aimed at achieving a resolution (see id. at 908). Several trial-level courts have found that, where a plaintiff lost financial documents, sent confusing and contradictory communications, inexcusably delayed a modification decision, or denied requests for HAMP loan modifications without setting forth grounds, such conduct constituted a lack of good faith within the meaning of CPLR 3408(f) (see e.g. Wells Fargo Bank, N.A. v Ruggiero, 39 Misc 3d 1233[A], 2013 NY Slip Op 50871[U] [Sup Ct, Kings County] [finding it appropriate to sanction the plaintiff for its failure to act in good faith where the plaintiff, inter alia, provided conflicting information, refused to honor agreements, engaged in unexcused delay, imposed unexplained charges, made misrepresentations, and failed to deal honestly, fairly, and openly]; HSBC Bank USA v McKenna, 37 Misc 3d at 888, 898-899, 910 [accepting a referee's recommendation that the plaintiff be found to have failed to act in good faith where the plaintiff rejected a proposed short sale at a sum the plaintiff had previously stated was its minimum sale amount and, in dicta, advising that, in determining whether the plaintiff failed to act in good faith in rejecting a short sale proposal, the factors to be considered included the outstanding debt, the likely market movement, and whether a short sale would result in a greater yield than a public foreclosure auction]; cf. Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638 [the defendants did not establish lack of good faith by the plaintiff where the defendants did not submit evidence supporting their claimed rental income]; but see JP Morgan Chase Bank, N.A. v Ilardo, 36 Misc 3d at 366, 378-380 [the plaintiff's conduct did not constitute a lack of good faith because an interim modification plan applied on a trial basis did not contractually obligate the plaintiff to provide a permanent HAMP loan modification to the defendants]). In addition, while we were not expressly called upon to decide the proper standard to apply in Wells Fargo Bank, N.A. v Myers (108 AD3d 9), in that case we determined that the record supported the Supreme Court’s finding that the mortgagee had failed to satisfy its obligation to negotiate in good faith without applying the common-law standard of bad faith.

 

The plaintiff nevertheless urges this Court to adopt the common-law standard of bad faith and hold that in determining whether a party failed to act in good faith during mandatory settlement negotiations pursuant to CPLR 3408, a court should consider only whether the party acted deliberately or recklessly in a manner that evinced gross disregard of, or conscious or knowing indifference to, another’s rights. This standard for bad faith conduct has been articulated in various contexts to determine issues such as whether an insurance carrier may be held liable for the alleged bad-faith failure to accept a settlement offer (see Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 453-454 [to establish a prima facie case of bad faith, the plaintiff must establish that the insurer's conduct constituted a "gross disregard of the insured's interests—that is, a deliberate or reckless failure to place on equal footing the interests of its insureds with its own interests when considering a settlement offer"]); whether a “no-damage-for delay” clause in a contract may be enforced for delays allegedly actuated by bad faith (see Kalisch-Jarcho, Inc. v City of New York, 58 NY2d 377, 384-385 ["no-damage-for delay" clause will not exempt a party from liability for willful or gross negligence, intentional wrongdoing, fraudulent or malicious conduct]); and whether allegedly stolen bonds were taken in bad faith (see Manufacturers & Traders Trust Co. v Sapowitch, 296 NY 226, 229 [bad faith is "nothing less than guilty knowledge or willful ignorance"]).

 

Were this Court to adopt the plaintiff’s proposed standard for determining whether a party failed to act in good faith, we would undermine the remedial purpose of CPLR 3408. The purpose of the statute is “to address the problem of mortgage foreclosures” by “help[ing] struggling homeowners without harming all consumers by inadvertently driving up the cost of credit or limiting the availability of legitimate credit” (Letter of Sen Farley, Bill Jacket, L 2008, ch 472, at 5), and “providing additional protections and foreclosure prevention opportunities for homeowners at risk of losing their homes” (Senate Introducer’s Mem in Support, Bill Jacket, L 2008, ch 472, at 7). To reiterate, “[t]he purpose of the good faith requirement [in CPLR 3408] is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution” (2009 Mem of Governor’s Program Bill, Bill Jacket, L 2009, ch 507, at 11).

 

Therefore, we hold that the issue of whether a party failed to negotiate in “good faith” within the meaning of CPLR 3408(f) should be determined by considering whether the totality of the circumstances demonstrates that the party’s conduct did not constitute a meaningful effort at reaching a resolution. We reject the plaintiff’s contention that, in order to establish a party’s lack of good faith pursuant to CPLR 3408(f), there must be a showing of gross disregard of, or conscious or knowing indifference to, another’s rights. Such a determination would permit a party to obfuscate, delay, and prevent CPLR 3408 settlement negotiations by acting negligently, but just short of deliberately, e.g., by carelessly providing misinformation and contradictory responses to inquiries, and by losing documentation. Our determination is consistent with the purpose of the statute, which provides that parties must negotiate in “good faith” in an effort to resolve the action, and that such resolution could include, “if possible,” a loan modification (CPLR 3408[f]; see Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 11, 18, 20, 23; Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638 [the defendants did not demonstrate that the plaintiff failed to act in good faith because nothing in CPLR 3408 requires a plaintiff to make the exact settlement offer desired by the defendants]; HSBC Bank USA v McKenna, 37 Misc 3d 885 [Sup Ct, Kings County] [the plaintiff failed to act in good faith based upon, inter alia, a referee's finding that the plaintiff rejected an all-cash short sale offer]).

 

Where a plaintiff fails to expeditiously review submitted financial information, sends inconsistent and contradictory communications, and denies requests for a loan modification without adequate grounds, or, conversely, where a defendant fails to provide requested financial information or provides incomplete or misleading financial information, such conduct could constitute the failure to negotiate in good faith to reach a mutually agreeable resolution.

 

In this case, the totality of the circumstances supports the Supreme Court’s determination that the plaintiff failed to act in good faith, as the plaintiff thwarted any reasonable opportunities to settle the action, thus contravening the purpose and intent of CPLR 3408. Sarmiento submitted his initial HAMP application on October 29, 2009, and provided updated financial documentation on November 18, 2009. Beginning on December 1, 2009, at the direction of the Court Attorney Referee, Sarmiento began placing $2,000 per month in an escrow fund, in part to demonstrate his ability to make modified monthly payments. On January 2, 2010, six weeks after receiving Sarmiento’s complete HAMP application, the plaintiff denied the application on the erroneous ground that the property was not Sarmiento’s primary residence.

 

Another month passed without a proper HAMP determination. On February 2, 2010, the plaintiff indicated that it needed a BPO to conduct an NPV test, a representation which suggested that Sarmiento’s HAMP application had satisfied the five-step waterfall test. Nevertheless, two months later, on April 2, 2010, the plaintiff again denied Sarmiento’s HAMP application, apparently for failing to satisfy the waterfall test since the plaintiff claimed that modification could not result in a monthly payment equal to or less than 31% of Sarmiento’s gross monthly income. However, the plaintiff apparently reached this conclusion using incorrect income data.

 

At the request of the Court Attorney Referee, Sarmiento submitted a second HAMP application on April 26, 2010. On May 13, 2010, the plaintiff denied the application, this time on the ground that the property was “not affordable.” The plaintiff ignored Sarmiento’s ensuing request for a more specific reason for denial and for the data that the plaintiff had used in conducting the NPV test.

 

On June 8, 2010, after Sarmiento sought the assistance of the HAMP support center, he was told that his HAMP application had been denied because of the escrow fund he had created at the direction of the Court Attorney Referee. This rationale, presumably relayed to the HAMP support center by the plaintiff, was a new ground for denial, and was inexplicable since the plaintiff was aware that the escrow fund existed at the direction of the Court Attorney Referee.

 

Nevertheless, despite the apparent denial of May 13, 2010, the plaintiff indicated, on July 1, 2010, that it was still reviewing Sarmiento’s HAMP application. Despite having indicated in February 2010 that it would soon conduct an NPV test, the plaintiff stated that no NPV test had yet been conducted. On July 19, 2010, the plaintiff indicated that the defendant’s HAMP application had been denied because of the creation and existence of the escrow fund.

 

Two months later, the plaintiff indicated that it again needed a BPO so that it could conduct an NPV test. Notably, the plaintiff had made an identical representation eight months earlier, and did not explain why it had not conducted the NPV test in February 2010. On October 5, 2010, the plaintiff offered Sarmiento a non-HAMP loan modification, while simultaneously indicating that his HAMP application was still under review. On the following day, the plaintiff again denied Sarmiento’s HAMP application, this time on the ground that he was current on his mortgage. The record demonstrates that it was not until October 12, 2010, nearly one year after Sarmiento made his initial HAMP application, that the plaintiff finally conducted an NPV test, which was negative.

 

Any one of the plaintiff’s various delays and miscommunications, considered in isolation, does not rise to the level of a lack of good faith. Viewing the plaintiff’s conduct in totality, however, we conclude that its conduct evinces a disregard for the settlement negotiation process that delayed and prevented any possible resolution of the action and, among other consequences, substantially increased the balance owed by Sarmiento on the subject loan. Although the plaintiff may ultimately be correct that Sarmiento is not entitled to a HAMP modification, the plaintiff’s conduct during the settlement negotiation process makes it impossible to discern such a fact, as the plaintiff created an atmosphere of disorder and confusion that rendered it impossible for Sarmiento or the Supreme Court to rely upon the veracity of the grounds for the plaintiff’s repeated denials of Sarmiento’s HAMP application.

 

Therefore, the totality of the circumstances supports the Supreme Court’s determination that the plaintiff failed to negotiate in good faith, in violation of CPLR 3408(f) (see Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 17).

 

Sanction

 

The plaintiff further argues that, even if it failed to act in good faith, the Supreme Court lacked the authority to sanction it absent express statutory or regulatory authority. In the plaintiff’s view, CPLR 3408(f) and 22 NYCRR 202.12-a(c)(4) require the parties to negotiate in good faith, but provide no mechanism to enforce that requirement. In order to address this particular contention, we must first look to our recent holding in Wells Fargo Bank, N.A. v Meyers (108 AD3d 9).

 

In Meyers, the plaintiff in a foreclosure action had, among other things, commenced the action even though its loan modification proposal was pending, denied a permanent loan modification based on the defendants’ purported debt-to-income ratio without submitting evidence of its calculations, and provided conflicting information regarding its denials of requests for a loan modification. This Court observed that, upon finding that foreclosing plaintiffs failed to negotiate in good faith pursuant to CPLR 3408(f), the trial-level courts have imposed a variety of sanctions, including barring them from collecting interest, legal fees, and expenses, imposing exemplary damages against them, staying the proceedings, imposing a monetary sanction pursuant to 22 NYCRR part 130, and vacating the judgment of foreclosure and sale and cancelling the note and mortgage (see Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 20-21). We noted that, save for our determination in IndyMac Bank, F.S.B. v Yano-Haroski (78 AD3d 895), in which we reversed the severe sanction of cancellation of the note and mortgage, based on the plaintiff’s failure to negotiate in good faith as required by CPLR 3408(f), this Court had not otherwise reviewed the propriety of other means of enforcing the good-faith negotiation requirement of CPLR 3408(f).

 

In Meyers, this Court determined that there was no basis to disturb the Supreme Court’s finding, made after a hearing, that the plaintiff failed to negotiate in good faith, in violation of CPLR 3408(f). While acknowledging that CPLR 3408(f) does not set forth a specific remedy for a party’s failure to negotiate in good faith (see Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 19; Hon. Mark C. Dillon, The Newly-Enacted CPLR 3408 for Easing the Mortgage Foreclosure Crisis: Very Good Steps, but not Legislatively Perfect, 30 Pace L Rev 855, 875 [Spring 2010]), this Court found that the particular remedy imposed by the Supreme Court—compelling the plaintiff to permanently abide by the terms of a HAMP trial loan modification—was “unauthorized and inappropriate” (Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 21). This Court did not rule on the possibility of other remedies for a violation of the good-faith negotiation requirement set forth in CPLR 3408(f) and cautioned that the courts may not rewrite the loan agreements into which the parties freely entered merely upon finding that one party failed to satisfy its obligation to negotiate in good faith pursuant to CPLR 3408(f) (see id.).

 

Contrary to the plaintiff’s contention, the Supreme Court did not lack authority to impose a sanction for the plaintiff’s failure to negotiate in good faith pursuant to CPLR 3408(f). This Court has specifically held that the Supreme Court has “authority to impose a sanction or remedy in the event it determined . . . that [a] plaintiff had failed to negotiate in good faith in the mandatory foreclosure settlement conferences” (Bank of Am. v Lucido, 114 AD3d 714, 715, citing Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 11). Although CPLR 3408 is silent as to the sanctions or remedies that may be employed for violation of the good faith negotiation requirement, “[i]n the absence of a specifically authorized sanction or remedy in the statutory scheme, the courts must employ appropriate, permissible, and authorized remedies, tailored to the circumstances of each given case” (Wells Fargo Bank, N.A. v Meyers, 108 AD3d at 23).

 

Notably, unlike the borrower in Meyers (108 AD3d 9), Sarmiento specifically moved to impose the sanctions ultimately imposed by the Supreme Court, based upon the court’s finding that the plaintiff violated the good faith requirement of CPLR 3408(f). Therefore, the plaintiff was on notice that the Supreme Court would entertain such a remedy.

 

We also note that in contrast to Meyers, the plaintiff does not argue that the sanctions actually imposed in the instant case were excessive or improvident. Therefore, the propriety of the particular sanctions imposed herein is not before us. To the extent that the arguments raised in the plaintiff’s reply brief may be viewed as a challenge to the propriety of the sanction imposed by the Supreme Court in this case, these arguments are not properly before us since they are raised for the first time in a reply brief, to which Sarmiento had no opportunity to respond (see Monadnock Constr., Inc. v DiFama Concrete, Inc., 70 AD3d 906; Congel v Malfitano, 61 AD3d 809; Borbeck v Hercules Constr. Corp., 48 AD3d 498).

 

We are cognizant that, in a foreclosure action, “[t]he court’s role is limited to interpretation and enforcement of the terms agreed to by the parties, and the court may not rewrite the contract or impose additional terms which the parties failed to insert” (131 Heartland Blvd. Corp. v C.J. Jon Corp., 82 AD3d 1188, 1189; see Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9; Maser Consulting, P.A. v Viola Park Realty, LLC, 91 AD3d 836, 837). Thus, in fashioning a remedy for a violation of the good-faith negotiation requirement set forth in CPLR 3408(f), courts should be mindful not to rewrite the contract at issue or impose contractual terms which were not agreed to by the parties. As the nature of the sanction in this case is unchallenged, our determination herein should not be construed as a deviation from the above-stated principle.

 

Accordingly, the order is affirmed insofar as appealed from.

 

RIVERA, J.P., SKELOS and LOTT, JJ., concur.

 

ORDERED that the order is affirmed insofar as appealed from, with costs.

 

[1] ACS/Wells was represented by the law firm of Steven J. Baum, P.C.

 

[2] HAMP is a federal program that is intended to help homeowners avoid foreclosure “by modifying loans to a level that is affordable for borrowers now and sustainable over the long term” (https://www.hmpadmin.com/portal/programs/hamp.jsp, last accessed July 16, 2014).

R

 

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Posted in STOP FORECLOSURE FRAUD1 Comment

Improper foreclosures have jammed up homeowners who purchased the properties from banks leading to a late-session push for legislation that opponents claim would unfairly bar those who lost their homes from winning back the titles

Improper foreclosures have jammed up homeowners who purchased the properties from banks leading to a late-session push for legislation that opponents claim would unfairly bar those who lost their homes from winning back the titles

Telegram-

Improper foreclosures have jammed up homeowners who purchased the properties from banks leading to a late-session push for legislation that opponents claim would unfairly bar those who lost their homes from winning back the titles.

The bill (S 1987) would create a one-year period starting the day it takes effect as law where those who lost homes because of improper foreclosures could sue to regain the title. Going forward, the House and Senate have differed on the window of time until any discrepancy in title would be cleared by another document. The legislation would not limit those who lost homes from suing banks for monetary damages.

“We’re hoping frankly that the bill goes nowhere,” said Roxanne Reddington-Wilde, treasurer of the Massachusetts Alliance Against Predatory Lending. Though the organization opposes both versions, Reddington-Wilde said the alliance prefers language recently adopted in the House that would provide a 10-year window going forward rather than the 3-year window approved by the Senate in January.

[TELEGRAM]

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Posted in STOP FORECLOSURE FRAUD2 Comments

SB1987 | FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

SB1987 | FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

H/T Richard Zombeck

Massachusetts Alliance Against Predatory Lending
www.maapl.info

FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

Senate Bill 1987

Massachusetts’ Supreme Judicial Court has declared thousands of foreclosures void and homeowner rights violated. Massachusetts has a problem going forward with hundreds of thousands of titles to property, 65,000 of which were “foreclosed” homes. S1987’s attempt to deny former owners the right to regain illegally foreclosed property is not the same as clearing titles and is not the solution. It disparately impacts women and communities of color foreclosed on early in the crisis before the SJC recognized the many lender illegalities in foreclosure.

What Does This Bill Do? It does nothing to clear title – it attempts to exclude the party most likely to sue.
The Senate version of the bill shortens the time to overturn an illegal foreclosure after filing a foreclosure deed and accompanying affidavit from the long standing, 20 year statute of limitations to 3 years for future auctions and to only one year for those previously foreclosed. The bill provides no notice to MA homeowners of this curtailing of long-standing, property rights. In passing the bill on July 23rd, 2014, House leadership changed the bill to limit the decrease from 20 years to 10 for both present and future foreclosed homeowners. This change will at least protect homeowners in the present crisis.
The bill offers an exemption only if the former homeowner sues or is sued, knows to ask and can convince a judge to give permission to file a copy of their complaint in the Registry of Deeds. Getting such an allowance can be hard since court rulings on foreclosed homeowners’ claims against lenders’ illegal procedures are still evolving.
While S1987 provides triple, monetary damages if the foreclosing lender is found to have lied on its affidavit, the home in which people raised their children, invested all their incomes and participated in their communities is forever gone. A home is not just a financial investment. S1987 misses that reality: denying our right to fight for and reclaim an illegally foreclosed home and limiting judgment to financial recompense which can never repay what is lost when a home is taken illegally.

Will S1987 protect innocent, new homeowners who purchase post-foreclosure?
The clear majority of new purchasers (58%) are big, cash-only investors – not new owner-occupants or small local investors. Only homeownership and long-term stable rental ensure healthy neighborhoods.
The recording of any legal challenge to title –lis pendens– exists specifically to protect future buyers.
However, only a judge can approve such a filing (G.L. Chapter 184 sect. 15). When legal rulings evolve so quickly, judges are learning like the rest of us. Prior to each recent major SJC ruling in foreclosed homeowners’ favor, most judges ruled against those same legal claims, declaring arguments “frivolous” when homeowners attempted to appeal. Judges have not been able to fully assess what will or will not be determined a “frivolous challenge” in the near future and thus merit recording in the Registry now. If a homeowner is permitted to record the initial claim, they are also laid open to counter-suits that their filing was frivolous.
S1987 does nothing to clear title. The now common problems of broken chains of title to mortgages and missing notes means there may be other parties besides former homeowners who have rights unaffected by S1987. The only sure protection for new or old homeowners will be swift adjudication of or another remedy to the now numerous valid challenges to post-foreclosure titles and broken chains of ownership of mortgages and notes.

Can the foreclosure deed affidavit be considered as “conclusive evidence” of a valid foreclosure?
The foreclosure affidavit filed at the Registry in a foreclosure is a purposefully abbreviated form created by the legislature to memorialize the bare bones of a foreclosure. As has been adjudicated by the Massachusetts Supreme Judicial Court in two decisions in the last two years:
“The statutory form was intended as an alternative to the more lengthy form prescribed by G.L. c. 244, §
15,… The purposes of a statutory form are…: to be recorded with the foreclosure deed and “secure the preservation of evidence that the conditions of the power of sale… have been complied with… Such an
affidavit is not conclusive proof of compliance with G.L. c. 244, § 14.”
The statutory affidavit covers none of the legal challenges that have been the critical breakthrough defenses against illegal foreclosures in the last few years: a mortgage having sub-prime characteristics, a broken chain of title to the mortgage, lacking an enforceable note, proper service on the homeowner of the notice of the auction, strict compliance with the right to cure period, etc. The affidavit S1987 attempts to elevated to a “conclusive evidentiary” status would require creation of a lengthier affidavit to cover the most salient issues. The abbreviated version used for decades cannot be elevated to proof of legal foreclosure. “Evidence” by its very nature must be the subject of scrutiny in court. “Conclusive evidence” without adjudication is a legal impossibility.

Can a curtailed time period to sue be fair when courts broaden the number of winnable offenses monthly?
Can the outcome of a lawsuit best predicted by the date it is brought be fair? If previously foreclosed homeowners had been limited to 1 year in 2008, none of the now common legally successful challenges to foreclosure could win in court then.

What new claims will become winnable in coming months?
S1987 will drown our Civil Court system in legal claims. As the state judiciary has grasped the many problems in the procedures of mortgaging and foreclosure of homes, they have moved to enforce our laws more and more completely. A significant percentage of the 65,000+ households that were foreclosed since 2007 now have valid and potentially winnable legal challenges to regain their title. The Massachusetts courts will be deluged as homeowners and their advocates rush to file suit on now viable claims within one year. A small percentage of such filings (1,300) will mean slightly fewer lawsuits in one year than were filed in the last six!

S1987 unjustly lacks any notification to former or present homeowners of vast cut in right to sue
S1987 provides a one year window for the over 65,000 foreclosed homeowners since 2007 to sue and get a copy of their complaint recorded at the local registry of deeds, rather than the traditional 20, a serious curtailment of traditional rights. The House bill, as amended, improves a still flawed bill by increasing the period to 10 years. Homeowners deserve notification that the state has changed the time period. S1987 includes no provision. Nor would S1987 notify future foreclosed homeowners of their Senate-proposed three year window to sue.
A homeowner will not know when their clock to sue starts. No Massachusetts law requires a deadline for recording a foreclosure deed and subject affidavit. S1987 does not fix this nor require notification to the supposed former homeowner of the filing. Currently deeds are recorded from 1 to 21 months after auction. No ‘foreclosed’ homeowner can be expected to check every week for the date a foreclosure deed is recorded.

Shouldn’t laws reverse the huge economic loss to the state rather than make that impossible?
Conservatively, the 65,000+ Massachusetts foreclosures represent a $20-$40 billion loss in wealth to the state’s households. The vast majority of those foreclosures were done by out of state lenders, who took almost all of those billion out of our state. It is well recognized that the loss of value in a home represents a concomitant loss of spending power representing additional billions of dollars of lost economic activity and spending in the Commonwealth. Studies also show concomitant unemployment and job losses, negative health impacts, much lower school performance by children, the tearing apart of the fabric of our communities, losses in property tax revenue to our municipalities, increase in crime and its concomitant costs. We should support our residents to get their homes back, receive justice they deserve, bring their pillaged wealth back and rebuild our economy.

Our Housing Market is Still Unstable: S1987 does not help
S1987 will not stabilize the housing market. MAAPL, the Mass Bankers Association, and Commissioner of Banks all stated publicly that they do not believe foreclosures are over. Spring 2014 foreclosures spiked again: March, April and May’s petitions to foreclose and June auctions more than doubled. Percentages over the prior year were still far higher than the height of the then believed to be devastating foreclosure crisis of the early 1990s.
While the initial cause of the foreclosures and damage to our housing market appeared to be sub-prime lending policies, evidence now shows that the damage was caused by the huge housing bubble. Now that property prices have dropped down closer to the normal historical curve, those hugely overpriced mortgages are still common place in our state. These continue to destabilize neighborhoods and our housing market as a whole. Surface solutions that allow some properties to be purchased more easily will not address the underlying problems or the continuing accumulation of damages from the foreclosures that have happened already.

S1987 Only Claims to Address a Small Part of the Widespread Ruined Titles in our Registries
In addition to the problems exposed in the Ibanez ruling of “broken chain of title to the mortgage,” numerous additional examples of other chain of title to mortgage problems exist, such as the recent Eaton decision’s on “holding the note” and a dozen others highlighted in seminal, SJC decisions in the last couple years alone. These problems compromise the marketability of title. Their property record contains the same legal violations. What are the homeowners to do who face these problems each and every month over the next 30 to 50 years when they or their heirs go to refinance or sell their home? S1987 is a response to the tip of the Housing Bubble/Housing Crash iceberg. It does not resolve title problems either for those who have been illegally foreclosed or the much larger percentage of homeowners who will face these problems in the decades going forward. Damage to titles can be located. The state should commit to finding them and providing a genuine repair.

maaplinfo@yahoo.com    www.MAAPL.info Legislative Contact: Grace Ross, 617-291-5591

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Posted in STOP FORECLOSURE FRAUD6 Comments

Merritt v. Countrywide Financial Corp. || “….district courts may evaluate RESPA claims case-by-case; and, therefore, in this case, the court vacated the dismissal of plaintiffs’ Section 8 of RESPA claims on limitations grounds and remanded for reconsideration. ….”

Merritt v. Countrywide Financial Corp. || “….district courts may evaluate RESPA claims case-by-case; and, therefore, in this case, the court vacated the dismissal of plaintiffs’ Section 8 of RESPA claims on limitations grounds and remanded for reconsideration. ….”

 

DAVID MERRITT; SALMA MERRITT, Plaintiffs-Appellants,
v.
COUNTRYWIDE FINANCIAL CORPORATION, a Delaware corporation; COUNTRYWIDE HOME LOANS, INC., a New York corporation; ANGELO MOZILO, an individual; MICHAEL COLYER, an individual; DAVID SAMBOL, an individual; BANK OF AMERICA, NA; KEN LEWIS, an individual; JOHN BENSON, Defendants-Appellees.

No. 09-17678.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted November 9, 2012—San Francisco, California.
Filed July 16, 2014.
Jacob N. Foster (argued), Kasowitz, Benson, Torres & Friedman LLP, San Francisco, California, for Plaintiffs-Appellants.

James Goldberg (argued) and Stephanie A. Blazewicz, Bryan Cave LLP, San Francisco, California; Douglas E. Winter and Angela Buenaventura, Bryan Cave LLP, Washington D.C., for Defendants-Appellees Countrywide Home Loans, Inc., Countrywide Financial Corporation, Bank of America Corporation, Michael Coyler, David Sambol, and Kenneth Lewis.

Charles Elder and Caleb Bartel, Irell & Manella LLP, Los Angeles, California, for Defendant-Appellee Angelo Mozilo.

Susan H. Handelman, Ropers, Majeski, Kohn & Bently, Redwood City, California, for Defendant-Appellee John Benson.

Before: Andrew J. Kleinfeld and Marsha S. Berzon, Circuit Judges, and William E. Smith, District Judge.[*]

Opinion by Judge Berzon, Dissent by Judge Kleinfeld

OPINION

BERZON, Circuit Judge.

Once again, we address issues arising from Countrywide Financial Corporation’s residential lending business during the period shortly before novel practices by lenders resulted in widespread distress in the housing markets. See, e.g., Balderas v. Countrywide Bank, N.A., 664 F.3d 787 (9th Cir. 2011); Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011). David Merritt and Salma Merritt (“the Merritts”) sued Countrywide Financial Corporation and various other defendants (collectively “Countrywide” or “CHL”) involved in their residential mortgage, alleging violations of numerous federal statutes. The district court dismissed the claims pleaded, with prejudice.[1] This appeal followed.

We consider in this opinion two issues raised by that dismissal: (1) whether the district court properly dismissed the Merritts’ Truth in Lending Act (“TILA”) rescission claim because they did not tender the rescindable value of their loan prior to filing suit or allege ability to tender its value in their complaint; and (2) whether the Merritts’ claims under Section 8 of the Real Estate Settlement Practices Act (“RESPA”) may proceed, including whether the RESPA limitations period, 12 U.S.C. § 2614, may be equitably tolled.[2]

Factual & Procedural Background

In March 2006, the Merritts took out both an adjustablerate mortgage[3] and a home equity line of credit (“HELOC”) with Countrywide on a home they purchased in Sunnyvale, California.[4] Initially, the Merritts’ Countrywide agent had told them, “I can pretty much guaranty you that we can get you in your new home for $1800 per month and possibly even as low as $1,500.” Three days before closing, however, the agent told the Merritts that he had completed their loan package and that their monthly payments would be $4,400 a month for the first five years: $3,200 for the mortgage, plus $1,200 for the HELOC. When the Merritts balked, the agent replied that “the market had shifted” since his initial estimates. He told the Merritts that the $4,400 monthly payment was “the lowest that you’ll find anywhere,” and if they did not close right away, they would lose their goodfaith deposit. He did not disclose that the $4,400/month figure was based on a temporary, “teaser” interest rate rather than a fixed rate, and that the Merritts’ monthly payments would be much higher once the teaser rate expired. The Merritts would not have accepted the loan if they had understood the terms.

The home’s owner falsely represented himself throughout the process as the selling agent. As the sale approached, he spoke with the Merritts’ Countrywide agent about getting the home appraised. The seller stated that he had found an appraiser who would provide an inflated appraisal of $739,000, above the home’s actual value of about $690,000, so as to justify a higher sale price. The Countrywide agent responded that he preferred to select the appraiser himself, but that since Countrywide had used the seller’s recommended appraiser before, he would agree to using him for this sale. The Countrywide agent, the seller, and the appraiser spoke over the phone, and the appraiser agreed to provide a $739,000 appraisal before having reviewed the property. The Merritts allege that Countrywide maintained a company practice of encouraging agents to select appraisers who would provide inflated appraisals, so as to increase the total amounts financed and thereby maximize Countrywide’s profits.

On the date of closing, a Countrywide representative arrived at the Merritts’ home with loan documents and said, “I will not have time to wait for you to read any of the documents, but just need you to sign these and if you have any questions or concerns afterwards, you can contact your loan agent.” The Merritts signed the documents, but between the small print and “confusing language,” did not understand the documents provided. The Countrywide representative did not give the Merritts copies of the signed documents to keep, only form notices of their right to rescind. The spaces where the lender would ordinarily fill in the relevant dates and deadlines on the form notices were left blank. The Merritts similarly were given a form for TILA disclosures, but with the spaces left blank for the annual percentage rate, finance charge, amount financed, total of payments, schedule of payments, and variable interest rate.

The day after the closing, the Merritts called their Countrywide agent and asked him to clarify the terms of their mortgage. The agent assured them that he would send them further documentation but never did. He also promised that they could refinance their mortgage at a lower interest rate after a year of on-time payments.

Over the next three years, the Merritts repeatedly requested from Countrywide the completed disclosures, to no avail. Meanwhile, Countrywide continued to send the Merritts monthly billing statements that did not disclose that the “minimum payment due” would only be applied to interest, and that they should pay more if they wanted to begin paying down the principal.

In 2009, Countrywide sent the Merritts the loan documents that they had been requesting for three years. By then, the Merritts had made about $200,000 in payments to Countrywide. The Merritts consulted with lawyers, who told them that they had been victims of “predatory lending.” They had their loan materials audited by an underwriter, who told them that he had identified numerous violations of state and federal law, including TILA, in the documentation provided by Countrywide.

Meanwhile, in August 2008, the Merritts suffered a loss of income that made them unable to afford their monthly payments. They repeatedly asked Countrywide to refinance or modify their mortgage into a conventional loan, but Countrywide refused.

In February 2009, the Merritts notified Countrywide that they wished to rescind their loan. Countrywide did not respond to the rescission request, instead offering to modify the loan. The modified loan offered was one the Merritts still could not afford.[5]

The Merritts filed this case pro se on March 18, 2009 and shortly thereafter amended the complaint.[6] Countrywide moved to dismiss the complaint in its entirety. The district court granted the motion, with prejudice. As relevant to the issues in this opinion, the district court dismissed the Merritts’ claim for rescission under TILA because the Merritts did not tender the value of their HELOC to Countrywide before filing suit, and dismissed their claims under Section 8 of RESPA as time-barred.

This appeal followed. We appointed pro bono counsel to represent the Merritts before this court.

Discussion

A. TILA rescission

TILA provides two remedies for loan disclosure violations — rescission and civil damages, each governed by separate statutory procedures.[7] Under TILA, an obligor has the “right to rescind . . . until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section . . . whichever is later.” 15 U.S.C. § 1635(a). Regardless of whether the required information and forms have been delivered, “[the] obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property.” Id. § 1635(f).

The TILA rescission provisions set out the following sequence of events for pursuing rescission: First, the obligor must notify the creditor of his intention to rescind, id. § 1635(a); then, within 20 days after receipt of notice of rescission, the creditor must return to the obligor any security interest, id. § 1635(b); and lastly, “[u]pon the performance of the creditor’s obligations under this section [i.e., upon return of the security interest], the obligor shall tender the property to the creditor.” Id. These procedures “shall apply except when otherwise ordered by a court.” Id.

Notably, “[t]he sequence of rescission and tender set forth in § 1635(b) is a reordering of the common law rules governing rescission.” Williams v. Homestake Mortg. Co., 968 F.2d 1137, 1140 (11th Cir. 1992) (citing 17A Am. Jur. 2d Contracts § 590, at 600-01 (1991)). Specifically, “[a]lthough tender of consideration received is an equitable prerequisite to rescission, the requirement was abolished by the Truth in Lending Act.” Palmer v. Wilson, 502 F.2d 860, 861 (9th Cir. 1974) “Under § 1635(b),” consequently,

all that the consumer need do is notify the creditor of his intent to rescind. The agreement is then automatically rescinded and the creditor must, ordinarily, tender first. Thus, rescission under § 1635 places the consumer in a much stronger bargaining position than he enjoys under the traditional rules of rescission.

Williams, 968 F.2d at 1140 (internal quotation marks and alteration omitted). By reversing the traditional sequence for common law rescission claims, TILA “shift[s] significant leverage to consumers,” consistent with the statute’s general consumer-protective goals. Lea Krivinskas Shepard, It’s All About the Principal: Preserving Consumers’ Right of Rescission under the Truth in Lending Act, 89 N. C. L. Rev. 171, 188 (2010).

At the same time, consumer protection is not the only goal of statutory rescission under TILA; “another goal of § 1635(b) is to return the parties most nearly to the position they held prior to entering into the transaction.” Williams, 968 F.2d at 1140. Balancing the two goals, the case law construing TILA has long recognized courts’ equitable power to modify the statutory rescission process. See id. at 1140; Palmer, 502 F.2d at 862. Congress confirmed this equitable role for courts overseeing TILA rescission proceedings when it amended TILA in 1980 to clarify that the § 1635(b) sequence of procedures “shall apply except when otherwise ordered by a court.” See Truth in Lending Simplification and Reform Act, Pub. L. No. 96-221, § 612(a)(4), 94 Stat. 175 (1980), codified at 15 U.S.C. § 1635(b).

Invoking this permission, the district court dismissed the Merritts’ TILA rescission claim because their complaint did not “allege that they tendered the Home Equity Line of Credit or its reasonable value to CHL or Bank of America when they sought rescission.” In so ruling at the pleading stage, the district court erred.

In accordance with the statutory provision that courts may order an alteration of the sequence of events otherwise prescribed by the TILA rescission provision, see id., we have held that district courts may, if warranted by the circumstances of the particular case, require the obligor to provide evidence of ability to tender as a condition for denial of a summary judgment motion advanced by the creditor. See Yamamoto v. Bank of New York, 329 F.3d 1167, 1171-73 (9th Cir. 2003). Yamamoto concluded that where “it is clear from the evidence that the borrower lacks capacity to pay back what she has received (less interest, finance charges, etc.), the court does not lack discretion to do before trial what it could do after,” i.e., refuse to enforce rescission. Id. at 1173. In so ruling, Yamamoto relied on earlier cases which had permitted judges after a resolution of the TILA claim on the merits to condition rescission on tender. Palmer, one of those earlier cases, had instructed courts considering such a condition to take into account “the equities present in a particular case, as well as consideration of the legislative policy of full disclosure that underlies [TILA] and the remedial-penal nature of the private enforcement provisions of the Act.” Id. at 1171 (quoting Palmer, 502 F.2d at 862); see also LaGrone v. Johnson, 534 F.2d 1360, 1362 (9th Cir. 1976) (holding that court should condition rescission on tender where TILA violations “were not egregious and the equities heavily favor the creditors”).

Like some other district courts in this circuit, the district court in this case extended Yamamoto to require that plaintiffs plead ability to tender in their complaint. See Botelho v. U.S. Bank, N.A., 692 F. Supp. 2d 1174, 1180 (N.D. Cal. 2010) (collecting cases). We reject this extension.

As Botelho noted, Yamamoto “was decided in the procedural context of summary judgment, when the district court was in a position to consider a full range of evidence in deciding whether to condition rescission on tender.” Id. at 1180. Without such evidentiary development, a district court is in no position to evaluate equitable considerations of the sort identified in Yamamoto and its predecessors. The equities to be considered, Yamamoto noted, might include the nature of the TILA violations (such as whether they were or were not egregious); whether the obligor had gone into bankruptcy; and the borrower’s ability to repay the proceeds (including, perhaps, whether that ability to repay was itself dependent upon a rescission order because without such an order, the obligor could not refinance or sell the property). 329 F.3d at 1171, 1173. “Whether the call is correct must be determined on a case-by-case basis, in light of the record adduced.” Id. at 1173. In making the call, the court may consider evidence such as affidavits and deposition testimony or may hold an evidentiary hearing. See Palmer, 502 F.2d at 862. To prescribe the pleading of ability to tender in every TILA rescission case would be inconsistent with this evidencegrounded, case-by-case approach.[8]

Further, our approach better comports with the TILA statutory text, which prescribes an enforcement sequence except when “otherwise ordered by a court.” 15 U.S.C. § 1635(b). If all obligors had to allege ability to tender payment when seeking rescission and so allege in a complaint for enforcement of the rescission obligation, then (1) the requirement of doing so would no longer be an exception, and (2) the requirement would not be “otherwise ordered by a court,” as a complaint initiates suit before any court order issues.

Moreover, Yamamoto recognized that if a creditor acquiesces at the outset in the notice of rescission, “then the transaction [is] rescinded automatically, thereby causing the security interests to become void and triggering the sequence of events laid out in subsections (d)(2) and (d)(3) [of Regulation Z, 12 C.F.R. § 226.23, which implements 15 U.S.C. § 1635(b)].” 329 F.3d at 1172. Yamamoto‘s holding allowing district courts to vary that sequence was targeted at situations in which the creditor “produce[s] evidence sufficient to create a triable issue of fact about compliance with TILA’s disclosure requirements.” Id. Where no such evidence (or viable legal argument) is produced, then the situation is legally indistinguishable for judicial remedy purposes from one in which the creditor initially acquiesced in the rescission; that is what should have happened in the absence of a tenable defense. Automatically to require tender in the pleadings before any colorable defense has been presented would encourage creditors to refuse to honor indisputably valid rescission requests, because doing so would allow the security interest to remain in place absent tender. The result would be to allow creditors to vary the statutory sequence simply through intransigence.

In addition, in many cases, it will be impossible for the parties or the court to know at the outset whether a borrower asserting her TILA rescission rights will ultimately be able to return the loan proceeds as required by the statute. That ability may depend upon the merits of her TILA rescission claim or on other claims related to the same loan transaction. See, e.g., Prince v. U.S. Bank Nat’l Ass’n, 2009 WL 2998141, at *5 (S.D. Ala. Sept. 14, 2009) (denying creditor’s motion to dismiss as based on “mere speculation” that plaintiffs would be unable to tender, and indicating that court would address the proper sequences for implementing the rescission, if necessary, only after resolving the rescission claim on the merits). For instance, if a TILA rescission claim is meritorious and the creditor relinquishes its security interest in the property upon notice of rescission as required by the default § 1635(b) sequence, the obligor may then be able to refinance or sell the property and thereby repay the original lender. Cf. Burrows v. Orchid Island TRS, LLC, 2008 WL 744735, at *6 (C.D. Cal. Mar. 18, 2008) (declining to require pleading of tender where the court inferred that borrower would be able to tender by selling or refinancing the property if rescission was found to be appropriate); Williams v. Saxon Mortg. Co., 2008 WL 45739, at *6 n.10 (S.D. Ala. Jan. 2, 2008) (declining to condition rescission on tender as was done in Yamamoto, because it was not clear that borrower would not be able to refinance the loan). Or her complaint may allege damages claims arising from the same loan transaction, the proceeds of which, if successful, could then be used to satisfy her TILA tender obligation. See Shepard, supra, at 205 & n.200, 210.

For all these reasons, any requirement that all TILA rescission plaintiffs allege ability to tender cannot be reconciled with the statute, Yamamoto‘s holdings, and Yamamoto‘s underpinnings. Any suggestion that such a pleading requirement may apply in some cases but not others fares no better, for two reasons:

First, requiring a subset of TILA rescission plaintiffs to plead tender would effectively impose a special pleading requirement upon those plaintiffs, without any advance notice as to who those plaintiffs are. After Ashcroft v. Iqbal, 556 U.S. 662 (2009), as before, “Rule 8(a)’s simplified pleading standard applies to all civil actions, with [only] limited exceptions.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513 (2002) (emphasis added); see Starr v. Baca, 652 F.3d 1202, 1215-16 (9th Cir. 2011) (discussing how to reconcile Iqbal and Swierkiewicz). Under this standard, a plaintiff need only plead “sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively,” and “the factual allegations that are taken as true must plausibly suggest an entitlement to relief.” Starr, 652 F.3d at 1216. There is no authority for altering the pleading requirements for a given statutory claim for some plaintiffs making that claim and not for others.

Second, there would be no principled way to determine which plaintiffs should be required to plead tender in the complaint. Yamamoto and its predecessors indicate that major factors as to whether to require tender in advance of rescission are the strength of any defense to rescission and the egregiousness of any TILA violation. Neither of these considerations can be evaluated before the creditor advances its defense, factually and legally. Nor do we see how the other “case-by-case” considerations pertinent under Yamamoto can be set out in such a way as to notify TILA plaintiffs in advance of any special, heightened pleading requirements applicable to them in particular.

For all these reasons, we hold that plaintiffs can state a claim for rescission under TILA without pleading that they have tendered, or that they have the ability to tender, the value of their loan. Only at the summary judgment stage may a court order the statutory sequence altered and require tender before rescission — and then only on a “case-by-case basis,” Yamamoto, 329 F.3d at 1173, once the creditor has established a potentially viable defense.

In light of this holding, we reverse the district court’s Rule 12(b)(6) dismissal of the Merritts’ TILA rescission claim and remand for further proceedings on that claim.

B. The RESPA Section 8 claims

Congress enacted RESPA in 1974 in response to abusive practices that inflate the cost of real estate transactions. 12 U.S.C. § 2601(a); see Sosa v. Chase Manhattan Mortg. Corp., 348 F.3d 979, 981 (11th Cir. 2003). Section 8 of RESPA prohibits kickbacks and unearned fees and may be enforced criminally or civilly. 12 U.S.C. § 2607. Civil actions under this section must be brought within one year of the alleged violation. Id. § 2614. The district court dismissed the Merritts’ claims under Section 8 of RESPA as “barred by the one-year statute of limitations because Plaintiffs filed suit nearly three years after closing on their loan.” The district court held that “the [RESPA] limitations period begins to run as of the date of the closing,” and did not address whether the statute might have been equitably tolled to the date in 2009 when the Merritts allege that they actually received their loan documents.

There is no direct precedent in this court on the RESPA equitable tolling issue, although we have held that the closely similar TILA limitations period provision may be equitably tolled. See King v. California, 784 F.2d 910, 914-15 (9th Cir. 1986). Before proceeding to the question whether we should reach the same conclusion as to tolling under RESPA as we did under TILA, we first consider whether we should pretermit that issue by affirming on a separate ground.

1. Plaintiffs’ RESPA Section 8 claims

We may affirm a dismissal on any properly preserved ground supported in the record. Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008); Papa v. United States, 281 F.3d 1004, 1009 (9th Cir. 2002). However, we are not required to do so, “and as a prudential matter can properly remand to the district court” rather than “decide ab initio issues that the district court has not had an opportunity to consider and that present questions of first impression in our circuit.” Badea v. Cox, 931 F.2d 573, 575 n.2 (9th Cir. 1991) (internal quotation marks omitted).

After considering the two RESPA Section 8 claims briefly, we have determined, as we shall explain shortly, that each raises fairly complex legal questions of first impression in this circuit neither decided by the district court nor fully briefed before this court. We therefore conclude that prudence counsels against addressing those claims on the merits in advance of any district court decision on them.

Plaintiffs alleged two theories of liability under Section 8 of RESPA, which we address in turn.

a. Section 8(b)

RESPA Section 8(b) prohibits the “giv[ing] . . . [of] any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service . . . other than for services actually performed.” 12 U.S.C. § 2607(b). The Merritts allege that defendants violated Section 8(b) by “charg[ing] [them] . . . cost[s] for copying, insurance and other costs associated with the loan, which cost Defendants significantly less,” thereby “pass[ing] on charges which falls within the definition of `markups’ and were charges not actually earned for any service.”

A case closely similar, but not identical, to this one as to the RESPA Section 8 “markup” issue, Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549, 553 (9th Cir. 2010), held that RESPA Section 8(b) “prohibits only the practice of giving or accepting money where no service whatsoever is performed in exchange for that money” (emphasis added). “By negative implication, Section 8(b) cannot be read to prohibit charging fees, excessive or otherwise, when those fees are for services that were actually performed.” Id. at 553-54.

The plaintiffs in Martinez did not press a third-party “markup” theory on appeal — that is, a theory that depended on the provision of services by a party other than by the defendant who charged the fee and collected it from the consumer. See id. at 552 n.2. The Merritts, therefore, urge us to distinguish Martinez and follow the Second Circuit’s decision in Kruse v. Wells Fargo Home Mortg., Inc., 383 F.3d 49 (2d Cir. 2004). Kruse held that while straight overcharges are not actionable under Section 8(b), markups for services provided by a third party are actionable. Id. at 58-62.

The circuits are divided on the third-party markup issue under RESPA. In holding that third-party markups were actionable under Section 8(b), Kruse held that the statute itself was ambiguous and therefore deferred to a HUD policy statement interpreting the provision to prohibit markups. See Kruse, 383 F.3d at 57. Santiago v. GMAC Mortg. Corp., Inc., 417 F.3d 384, 388-89 (3d Cir. 2005), like Kruse, held that markups are actionable under Section 8(b), although it relied on the statutory language as unambiguous, rather than on an agency interpretation of an ambiguous statute. In contrast, several circuits have held or strongly implied that third-party markups are not actionable under RESPA Section 8(b). See Freeman v. Quicken Loans, Inc., 626 F.3d 799, 804 (5th Cir. 2010) (“RESPA is an anti-kickback statute, not an anti-price gouging statute”); Haug v. Bank of Am., N.A., 317 F.3d 832, 836 (8th Cir. 2003) (holding that charging plaintiffs more for third-party services than defendant paid for them, “standing alone, does not violate Section 8(b) of RESPA”); Boulware v. Crossland Mortg. Corp., 291 F.3d 261, 266, 268 (4th Cir. 2002) (“§ 8(b) requires fee-splitting or a kickback”; “Congress chose to leave markups . . . to the free market”); Krzalic v. Republic Title Co., 314 F.3d 875, 881 (7th Cir. 2002) (holding that markups are not actionable under RESPA, which “is not a price-control statute”).[9]

This question, which raises complicated issues of statutory interpretation and administrative law of first impression in this circuit, was not addressed by the district court and only minimally briefed before this court. We therefore decline to decide the question in the first instance on appeal.

b. Section 8(a)

Section 8(a) prohibits the “giv[ing] . . . [of] any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” 12 U.S.C. § 2607(a). Plaintiffs’ theory of Section 8(a) liability is that Countrywide referred appraisal business to the appraiser, Benson, in exchange for a “thing of value,” namely, an inflated appraisal.

At oral argument, defendants disputed the facts underlying the Section 8(a) claim. Specifically, defendants argued that the Merritts have admitted that the appraisal referral was made “before [they] first contacted Countrywide.” These factual claims rely on documents that were not before the district court, and in any event, are unavailing in light of this court’s duty to accept the plaintiffs’ allegations as true at the pleading stage of the litigation. Contrary to defendants’ representation at oral argument, the operative complaint alleges that the Merritts were in contact with their Countrywide agent as early as February 2006, and that the agent and the appraiser were in contact in early March. To the extent that there are possible inconsistencies in the timeline alleged in the complaint, the district court as well as this court must construe the complaint in the light most favorable to the plaintiffs and grant leave to amend if any defects could be cured. See Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th Cir. 1995) (per curiam) (pro se complaints should be dismissed without leave to amend only if it is clear that deficiencies could not be cured by amendment).

Countrywide also argued in its brief that the Merritts’ Section 8(a) claim cannot survive dismissal because the statute only provides for liability “to the person or persons charged for the settlement service involved in the violation,” 12 U.S.C. § 2607(d)(2), and the Merritts did not allege that they were charged for the appraisal. However, this failing could be cured if the Merritts were granted leave to amend the complaint to allege that, as they contend in their reply brief, they paid the appraiser directly.

A more complicated question is whether an inflated appraisal would qualify as a “thing of value” as that term is defined for RESPA purposes. The answer is not self-evident, the parties briefed this question only in passing, and the district court did not decide it. Moreover, the determination of this question may depend on factual development as to the precise structure of the agreement and the sequence of events. We therefore do not decide this question in the first instance either. We conclude only that we are not prepared to affirm at this juncture on the ground that the inflated appraisal was not a “thing of value” for RESPA purposes, and so must reach the limitations issue.

2. Equitable tolling

The district court dismissed the Merritts’ claims under Section 8 of RESPA as “barred by the one-year statute of limitations because Plaintiffs filed suit nearly three years after closing on their loan,” and, although the issue was raised, did not consider whether the statute might have been equitably tolled to the date in 2009 when the Merritts allege that they actually received their loan documents. Only at that time, the Merritts allege, did they learn about the markups charged, as well as key information about their loan that could help to tip them off to the appraisal kickback scheme, including that the individual they thought had been the home’s selling agent was actually also its owner.

The pertinent RESPA limitations provision states:

Jurisdiction of courts; limitations. Any action pursuant to the provisions . . . of this title may be brought in the United States district court or in any other court of competent jurisdiction, for the district in which the property involved is located, or where the violation is alleged to have occurred, within . . . 1 year in the case of a violation of section 2607 . . . of this title from the date of the occurrence of the violation

. . . .

12 U.S.C. § 2614.

We have not previously decided whether the RESPA statutory limitations period may be equitably tolled. King did, however, address a closely similar question concerning the TILA limitations period. King, 784 F.2d 910. King held that the TILA limitations period was subject to equitable tolling. Id. at 195. We reach the same conclusion here with regard to the RESPA limitations period.

There has, however, been considerable development since King in the general principles governing the availability of equitable tolling of statutory limitations periods. Consequently, we conduct a somewhat more extensive analysis of the pertinent considerations than did King, albeit with the same result.

Our departure point under post-King case law is the proposition that “[t]ime requirements in lawsuits between private litigants are customarily subject to `equitable tolling.’” Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 95 (1990) (citing Hallstrom v. Tillamook Cnty., 493 U.S. 20, 27 (1989)). To determine whether the RESPA limitations period falls within that customary rule, we must first determine whether it is jurisdictional; courts “[have] no authority to create equitable exceptions to jurisdictional requirements.” Bowles v. Russell, 551 U.S. 205, 214 (2007). If the RESPA limitations period is non-jurisdictional, we must assess whether Congress has clearly precluded equitable tolling. See United States v. Brockamp, 519 U.S. 347, 350 (1997).

a. The RESPA limitations period is not jurisdictional

In a series of recent cases, the Supreme Court has “pressed a strict[] distinction between truly jurisdictional rules, which govern `a court’s adjudicatory authority,’ and nonjurisdictional `claim-processing rules,’ which do not.” Gonzalez v. Thaler, 132 S. Ct. 641, 648 (2012) (quoting Kontrick v. Ryan, 540 U.S. 443, 454-55 (2004)). In doing so, the Court has clarified that “the term `jurisdictional’ properly applies only to prescriptions delineating the classes of cases (subject-matter jurisdiction) and the persons (personal jurisdiction) implicating [the court's adjudicatory] authority.” Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 160-61 (2010) (emphasis added) (internal quotation marks omitted). Moreover, a rule is “jurisdictional” only if “Congress has `clearly state[d]‘ that the rule is jurisdictional.” Sebelius v. Auburn Reg’l Med. Ctr., 133 S. Ct. 817, 824 (2013) (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 515-516 (2006) (alteration in original)). To determine whether Congress clearly intended a statutory restriction to be jurisdictional, courts review factors such as the statute’s language, “context, and relevant historical treatment.” Reed Elsevier, 559 U.S. at 166. Applying this test, the Court has repeatedly held that “filing deadlines ordinarily are not jurisdictional; indeed, [the Court has] described them as `quintessential claim-processing rules.’” Sebelius, 133 S. Ct. at 825 (quoting Henderson ex rel. Henderson v. Shinseki, 131 S. Ct. 1197, 1203 (2011)). With these precepts in mind, we proceed to examine the relevant factors.

i. Language

By its terms, § 2614 provides that any RESPA Section 8 action “may be brought . . . within 1 year . . . from the date of the occurrence of the violation.” 12 U.S.C. § 2614 (emphasis added). This non-mandatory language is far more permissive than several limitations provisions that have been held amenable to equitable tolling. For example, the limitations provision held to be non-jurisdictional and tollable in Henderson, 131 S. Ct. at 1204, stated that a claimant “shall file . . . within 120 days” (emphasis added). If not all “mandatory prescriptions, however emphatic, are . . . properly typed jurisdictional,” Henderson, 131 S. Ct. at 1205 (emphasis added) (internal quotation marks omitted), then the use of permissive, non-mandatory language such as RESPA’s “may file” language weighs considerably against a finding that the limitations period is jurisdictional.

ii. Statutory placement

In examining whether or not a rule is jurisdictional, a few of the Supreme Court’s recent cases have assigned some significance to whether the rule is “located in a jurisdictiongranting provision.” Reed Elsevier, 559 U.S. at 166; see also Henderson, 131 S. Ct. 1205; Payne v. Peninsula Sch. Dist., 653 F.3d 863, 870-71 (9th Cir. 2011) (en banc), overruled in part on other grounds by Albino v. Baca, 747 F.3d 1162 (9th Cir. 2014). Countrywide primarily relied upon this factor to support its argument against equitable tolling, citing the D.C. Circuit’s holding that “the [RESPA] time limitation is a jurisdictional prerequisite to suit and as such not subject to equitable tolling.” Hardin v. City Title & Escrow Co., 797 F.2d 1037, 1038 (D.C. Cir. 1986). To reach its conclusion, Hardin relied upon the placement of the RESPA time limitation in “the same sentence” that, in Hardin‘s characterization, “creates federal and state court jurisdiction” under RESPA, and upon the subtitle of the section, “Jurisdiction of Courts.” See id. at 1039.

In light of Supreme Court cases decided since Hardin, we cannot agree with the D.C. Circuit that the RESPA time limitation is placed in a sentence that “creates federal and state court jurisdiction.” It is true that the provision appears under the heading “Jurisdiction of courts; limitations.” But, as the Supreme Court has noted in recent years, “jurisdiction” has “many, too many meanings.” Arbaugh, 546 U.S. at 510. In particular, use of the word “jurisdiction” does not make a provision “jurisdiction-granting.Reed Elsevier so indicated, rejecting the argument that the “presence of the word `jurisdiction’” in a provision renders the entire provision jurisdictional. 559 U.S. at 163. Moreover, “[a] requirement we would otherwise classify as nonjurisdictional . . . does not become jurisdictional simply because it is placed in a section of a statute that also contains jurisdictional provisions.” Sebelius, 133 S. Ct. at 825 (citing Gonzalez, 132 S. Ct. at 651-52). “Mere proximity will not turn a rule that speaks in nonjurisdictional terms into a jurisdictional hurdle.” Gonzalez, 132 S. Ct. 651.

Here, although the RESPA limitations period appears in a provision that references the court’s “jurisdiction,” the section, read as a whole, is not a “jurisdiction-granting provision.” Reed Elsevier, 559 U.S. at 166 (emphasis added). The provision’s reference to “United States district court[s]. . . [and] other court[s] of competent jurisdiction” implies, instead, that the source of the referenced courts’ “competent jurisdiction” lies elsewhere. And that is in fact the case with regard to federal district courts, which have jurisdiction to hear claims “arising under” RESPA because it is a “law[]. . . of the United States.” See 28 U.S.C. § 1331. Other than providing for a limitations period, then, the RESPA provision at 12 U.S.C. § 2614 simply clarifies that, when determining in which court of competent jurisdiction they will file their claim, RESPA litigants have a choice of venue: either “the district in which the property involved is located,” or, if it differs, “where the violation is alleged to have occurred.” 12 U.S.C. § 2614.

iii. Historical treatment

In some statutory contexts, there is a venerable, consistent line of Supreme Court cases construing whether a particular limitations provision is jurisdictional. See, e.g., Bowles, 551 U.S. at 210-13; John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 137-39 (2008). Here we have no such historical guidance, as the Supreme Court has not addressed whether RESPA’s limitations period is jurisdictional, nor has our court. In the absence of Supreme Court precedents the case for deference to historical guidance is much weaker here than in cases such as Bowles, 551 U.S. 205.

We do, however, have pertinent established law in this circuit, namely King, 784 F.2d 910; see also Ramadan v. Chase Manhattan Corp., 156 F.3d 499, 501-05 (3d Cir. 1998) (following King‘s holding as to TILA). King is precedent in this circuit, and is persuasive authority in this case.

King construed TILA’s similarly worded limitations period, and held it amenable to equitable tolling. The TILA limitations provision is as follows:

(e) Jurisdiction of courts; limitations on actions; State attorney general enforcement

Except as provided in the subsequent sentence, any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. . . .

15 U.S.C. § 1640(e). Like the RESPA limitations period, then, the parallel TILA provision appears in the same sentence as a reference to “jurisdiction” and under the heading “Jurisdiction of courts; limitations on actions.”[10]

King was decided without the benefit of the Supreme Court’s recent admonitions against “profligate use” of the term “jurisdiction[al].” Payne, 653 F.3d at 868 (internal quotation marks omitted); see Arbaugh, 546 U.S. at 510. But King necessarily relied upon an understanding that the TILA limitations period was non-jurisdictional; otherwise, King could not have held the limitations period contained in the subsection subject to equitable tolling. Reflecting that understanding of King, the Seventh Circuit, in Lawyers Title Insurance Corp. v. Dearborn Title Corp., 118 F.3d 1157 (7th Cir. 1997), relied in part upon King‘s reasoning when it expressly declined to follow the D.C. Circuit’s contrary holding in Hardin. Lawyers Title held, instead, that the RESPA limitations period is not jurisdictional and may be equitably tolled. See Lawyers Title, 118 F.3d at 1166-67.[11]

Countrywide argues that Judge Posner’s opinion for the court in Lawyers Title is not persuasive, because it relies upon the premise that federal limitations periods “are universally. . . nonjurisdictional” unless they involve “actions against the United States.” Id. at 1166 (quoting Cent. States, Se. & Sw. Areas Pension Fund v. Navco, 3 F.3d 167, 173 (7th Cir. 1993)). The Supreme Court’s more recent equitable tolling jurisprudence indicates that the line is not quite so bright. For example, in Bowles, the Court held that “time limits for filing a notice of appeal are jurisdictional in nature.” 551 U.S. at 206.

But Irwin, decided before Lawyers Title, began from a similar premise — that “time requirements in lawsuits between private litigants are customarily subject to `equitable tolling.’” Irwin, 498 U.S. at 95. The difference between the “universally” adverb in Lawyers Title, 118 F.3d at 1166, and the “customarily” adverb in Irwin, 489 U.S. at 95, appears to reflect hyperbole in the former, but not a difference in fundamental concept. In contrast, Hardin applied the sort of rigidly formalistic jurisdictional analysis that the Supreme Court’s recent cases have eschewed.

All of these factors point towards a conclusion that the RESPA limitations period does not “implicat[e] [the district court's adjudicatory] authority,” Reed Elsevier, 559 U.S. at 161, but, instead, is an ordinary “filing deadline,” a “quintessential claim-processing rule[].” See Sebelius, 133 S. Ct. at 825. We so conclude.

b. The presumption of equitable tolling applies

As the RESPA limitations period is not jurisdictional, RESPA claims are presumptively amenable to equitable tolling, see Irwin, 489 U.S. at 95, unless Congress has clearly indicated otherwise. There is no such indication in the statute.

Many of the considerations on which we relied as to the jurisdictional issue, particularly the permissive language used in the limitations provision, also help to negate any clear barrier to equitable tolling. In addition, we are guided by the analysis in King, 784 F.2d 910, which applied an approach with respect to equitable tolling generally consistent with the recent cases. King‘s logic with regard to the TILA limitation period applies equally to the parallel RESPA provision.

King began by asking “whether tolling the statute in certain situations [would] effectuate the congressional purpose” of the statute, always “our basic inquiry” when determining whether a limitations period may be equitably tolled. Id. at 914-15. Because TILA is a broadly remedial consumer-protection statute, King reasoned, “an inflexible rule that bars suit one year after consummation [of the loan]” would be “inconsistent with legislative intent.” Id. at 914. King also recognized, however, that Congress did not intend to expose lenders “to a prolonged and unforeseeable liability.” Id. King therefore struck the balance between consumer protection and predictable liability by holding that the TILA limitations period could, “in the appropriate circumstances,” be equitably tolled, but only “until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action.” Id. at 915.

As we have recently recognized, RESPA is, like TILA, “intended . . . to serve consumer-protection purposes.” Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 665 (9th Cir. 2012). Consistent with those purposes, we have concluded that “RESPA’s provisions relating to loan servicing procedures should be construed liberally to serve the statute’s remedial purpose.” Id. at 665-66 (internal quotation marks omitted). By the same token, “tolling the statute [of limitations] in certain situations [would] effectuate the congressional purpose” of protecting consumers. King, 784 F.2d at 915. There may be situations in which a consumer is unable to file suit within the statutory limitations period precisely because of a real estate service provider’s obfuscation or failure to disclose.

We hold, therefore, that although the limitations period in 12 U.S.C. § 2614 ordinarily runs from the date of the alleged RESPA violation, “the doctrine of equitable tolling may, in the appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover” the violation. King, 784 F.2d at 915. Just as for TILA claims, district courts may evaluate RESPA claims case-by-case “to determine if the general rule would be unjust or frustrate the purpose of the Act and adjust the limitations period accordingly.” Id.

* * *

The district court dismissed plaintiffs’ RESPA Section 8 claims as time-barred, holding that “the [RESPA] limitations period begins to run as of the date of closing,” and thereby assuming that the period could not be equitably tolled. Rather than “decide ab initio issues that the district court has not had an opportunity to consider and that present questions of first impression in our circuit,” Badea, 931 F.2d at 575 n.2, we decline, for the reasons explained, to affirm the dismissal of the Merritts’ Section 8 claims on alternate grounds. Instead, we reach the issue that was the basis for dismissal, failure to comply with the statutory limitations period. In light of our holding today regarding equitable tolling, we vacate the dismissal of the Section 8 claims on limitations grounds and remand for reconsideration. On remand, the district court may consider such evidence as it deems appropriate to determine on what date the Merritts discovered or had reasonable opportunity to discover the alleged Section 8 violations and whether they filed their complaint within a year of that date. If the district court determines that the plaintiffs’ RESPA Section 8 claims are not time-barred, it should permit substantive amendment of the claims upon an appropriate request and continue with further proceedings consistent with this opinion. See Lucas, 66 F.3d at 248 (“Unless it is absolutely clear that no amendment can cure the defect . . . a pro se litigant is entitled to notice of the complaint’s deficiencies and an opportunity to amend.”).

Conclusion

We reverse the district court’s dismissal of plaintiffs’ TILA rescission claim and remand for further proceedings on that claim. As to plaintiffs’ RESPA Section 8 claims, we vacate the dismissal and remand to the district court for further consideration in accordance with this opinion.

REVERSED IN PART, VACATED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.

KLEINFELD, Senior Circuit Judge, dissenting:

I respectfully dissent.

We review a 12(b)(6) dismissal de novo,[1] and can affirm on any ground, regardless of whether the district court relied on it.[2]

This complaint violated Federal Rule of Civil Procedure 8(a)(2). The Rule requires a “short and plain statement of the claim showing that the pleader is entitled to relief.”[3] We are indulgent with pro se complaints, but even for them, there are limits.

The Merritt complaint is neither “short” nor “plain.” It is 68 pages long, 398 paragraphs. Nor were they deprived of opportunities to clarify what their claims were. Though they call the complaint their “Second Amended Complaint,” the truth is that it is their fifth version. They got leave to file this version of their complaint by filing a motion explaining that the amendments would be “clarifications,” along with a “stipulation” to which Countrywide did not stipulate. The leave to amend they thus obtained mooted out Countrywide’s pending motion to dismiss, so it was not adjudicated. The plaintiffs then filed their amended complaint which was materially different from the one submitted to the district court with their motion for leave to amend. Far from “clarifying” their previous complaints, this new complaint added an additional 69 paragraphs, 16 pages, and yet another cause of action.

We have articulated five factors for evaluating whether a plaintiff should be given leave to amend: “(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) whether plaintiff has previously amended his complaint.[4] We have held that the “district court’s discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint.”[5] Here, the Merritts have submitted five different complaints to the district court. Further amendment would unduly prejudice the defendants. The defendants have responded to two of the Merritts’ five prolix, incomprehensible complaints, doubtless at great expense for their own lawyers. Defendants have filed numerous motions addressing those complaints, for violation of Rule 8, misrepresentations, failure to state claims upon which relief may be granted, and lack of appropriate service. That is a lot of wasted money. Plaintiffs imposed this unfair prejudice on defendants by their vague prolixity and multiple filings.

The Merritts’ most recent amendments made their complaint even more prolix, and less “short and plain.” Countrywide’s combined motion to strike and dismiss placed the Merritts on notice that their complaint failed to comply with Rule 8, but they made no attempt to bring their complaint into compliance with the rules. Because of this history, dismissal with prejudice was justified. Although dismissal with prejudice for failure to comply with the rules requires consideration of less drastic alternatives,[6] here there were none, as it did not appear that plaintiffs were prepared, even after five tries, to make a short and plain statement of claims for which they were entitled to relief. Their misleading stipulation had already burdened Countrywide with the need to brief a second motion to dismiss. Allowing the Merritts a sixth attempt to plainly state their claims would be too prejudicial to the defendants to be a fair alternative under these circumstances.

The majority opinion does a heroic job of stating claims clearly on behalf of the Merritts. But plaintiffs did not state them. It is not fair to defendants to perform these legal services for plaintiffs, even pro se plaintiffs, where the plaintiffs do not evidently have good claims. “Prolix, confusing complaints such as the ones plaintiffs filed in this case impose unfair burdens on litigants and judges. As a practical matter, the judge and opposing counsel, in order to perform their responsibilities, cannot use a complaint such as the one plaintiffs filed, and must prepare outlines to determine who is being sued for what. Defendants are then put at risk that their outline differs from the judge’s, that plaintiffs will surprise them with something new at trial which they reasonably did not understand to be in the case at all, and that res judicata effects of settlement or judgment will be different from what they reasonably expected. [T]he rights of the defendants to be free from costly and harassing litigation must be considered.”[7]

If plaintiffs had what looked like a strong claim that ought to be adjudicated on the merits, judicial creation of a complaint for them might not be so unfairly prejudicial.[8] But they do not. What they appear to be saying in their 398-paragraph complaint is that they bought a $729,000 house, and borrowed $739,000 for it, because the seller lowballed them into thinking they were going to get the house for $719,000. They seem to be saying that Countrywide’s agent persuaded them to lie, which they did, in their loan application, such as by saying that Mrs. Merritt was employed when she was actually receiving disability payments (later terminated). And they seem to be saying that because they were minorities they were offered a more ample adjustable rate mortgage instead of a less ample fixed rate mortgage loan than they would otherwise be entitled to.

Were we limited to 12(b)(6) dismissal, we would have to assume for purposes of decision that the plausible factual statements (but not the legal conclusions and editorializing rhetoric) in the complaint were true.[9] We are not so limited under Rule 8 analysis, which I suggest ought to be applied. Under Rule 12 analysis, some of the claims are plausible at least in part. Obviously, if Countrywide did not properly provide the loan papers to the Merritts, a claim if timely could be made. Tender of the full amount received is not in all circumstances a sine qua non for a pleading claiming rescission, though some sort of equitable judgment requiring tender must be made if rescission is granted, to assure that the plaintiff does not get to keep what it bought and also get all the money back.[10]

It is hard to say whether plaintiffs even seek a rescission remedy that could be allowed. The prayer in their complaint seeks a return of all the money they have “invested in their property,” plus compensatory damages, plus $2,000,000 in punitive damages, plus a “prime loan at current market rates” (far lower than the housing bubble interest rates that prevailed when they bought their $729,000 house), or for them to be able to walk away with the reimbursements and damages. Their appellate brief is more modest, but was not before the district court.

Their pleading seems to say that they have been living in a $729,000 house for what is now almost six years without paying anything toward the price. If they got past their Rule 8 problems, and their Rule 12 problems, their equities appear to be weak. The Merritts have had five chances to state this claim. Prejudice and futility counsel against giving them a sixth try. We ought to let the dismissal with prejudice stand.

[*] The Honorable William E. Smith, District Judge for the U.S. District Court the District of Rhode Island, sitting by designation.

[1] The district court dismissed the claims not on Rule 8 grounds but on the merits for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6). The dissent suggests we affirm on the basis of Rule 8(a)(2). The enforcement of Rule 8 rests within the district court’s discretion, and defendants do not raise any Rule 8(a)(2) questions before us. Under these circumstances, it would be improper for us to affirm on Rule 8 grounds. See Gillibeau v. City of Richmond, 417 F.2d 426, 431 (9th Cir. 1969).

[2] We address the Merritts’ other claims, and the parties’ motions for judicial notice, in a memorandum disposition issued concurrently with his opinion.

[3] As is generally true in California, the legal instrument for the Merritts’ home loan was a deed of trust and not, technically speaking, a mortgage. See Siegel v. Am. Savings & Loan Ass’n, 258 Cal. Rptr. 746, 747 (Cal. Ct. App. 1989) (defining a deed of trust); 27 Cal. Jur. 3d Deeds of Trust § 1 (2011) (same); Cal. Civ. Code § 2920(b) (distinguishing mortgage from deed of trust for certain purposes under California state law). We refer to the Merritts’ home loan throughout this opinion as a mortgage, because that is how the parties have referred to it in their pleadings and briefs, and the precise financing instrument is not legally material to the issues addressed in this opinion.

[4] Because we are evaluating a district court’s dismissal pursuant to Rule 12(b)(6), we take the facts from the Merritts’ complaint and assume that they are true. See Cervantes v. United States, 330 F.3d 1186, 1187 (9th Cir. 2003).

[5] Countrywide had, in the meantime, been acquired by Bank of America. The Merritts’ loan was eventually sold to Wells Fargo.

[6] We refer to the amended complaint throughout simply as “the complaint.”

[7] Plaintiffs’ TILA claims relate solely to their home-equity line of credit, or “HELOC.” TILA does not apply to residential mortgages used to finance the initial acquisition or construction of a dwelling. See 15 U.S.C. §§ 1635(e)(1) & 1602(x). Countrywide presents for the first time on appeal the argument that plaintiffs’ HELOC falls within this residential mortgage exception. Because this argument was not previously raised in the district court, we do not address it here.

[8] Indeed, even in a common-law equitable rescission action where the plaintiff is required to tender first, the plaintiff need not necessarily plead ability to tender in the complaint. See 1 Dan B. Dobbs, Law of Remedies: Damages—Equity—Restitution § 4.8, at 463 (2d ed. 1993).

[9] The Eleventh Circuit has reserved whether a third-party markup theory might be viable under RESPA Section 8(b). See Sosa, 348 F.3d at 982-84.

[10] There is one distinction. The TILA limitations provision, as passed by Congress, appeared as one subsection in a section headed “Civil liability.” See Consumer Credit Protection Act, Pub. L. 90-321, § 130(e), 82 Stat. 146, 157 (1968). The subheading “Jurisdiction of courts” was added in the codification process. In contrast, the RESPA limitations provision, as passed by Congress, appeared under the heading “Jurisdiction of Courts.” See Real Estate Settlement Procedures Act of 1974, Pub. L. 93-534, § 16, 88 Stat. 1724, 1731 (1974). We do not ascribe significance to this distinction for present purposes. Whatever its origin, the heading just identifies a subject matter; it does not identify the subsection as jurisdiction-creating.

[11] Two other circuits have reserved the question of whether RESPA’s limitations period may be equitably tolled. See Egerer v. Woodland Realty, Inc., 556 F.3d 415, 424 n.18 (6th Cir. 2009); Snow v. First Am. Title Ins. Co., 332 F.3d 356, 361 n.7 (5th Cir. 2003).

[1] Edwards v. Marin Park, Inc., 356 F.3d 1058, 1061 (9th Cir. 2004).

[2] Janicki Logging Co. v. Mateer, 42 F.3d 561, 564 (9th Cir. 1994). The majority cites dicta in Gillibeau v. City of Richmond, 417 F.2d 426, 431 (9th Cir. 1969), a 1969 case, for the proposition that we should not, in the first instance, affirm a dismissal on Rule 8 grounds where the district court did not act upon the Rule 8 motions. On the other hand, we said, possibly in dicta, but possibly in holding, in a 1988 case, Sparling v. Hoffman Construction Co., 864 F.2d 635, 640 (9th Cir. 1988), that even if the pleading did state a claim upon which relief could be granted, “the complaint would be deficient under Rule 8(a) of the Federal Rules of Civil Procedure which requires `a short and plain statement of the claim showing that the pleader is entitled to relief.’” In the case before us, the court noted that the Merritts’ second amended complaint was “mostly unintelligible.” The district court further noted that the Merritts’ allegations and claims purported to be “made, at least in part, `hypothetically.’” It took note of the defendant’s motion to dismiss under Rule 8, but treated it as moot, because of the dismissal for failure to state a claim under Rule 12. I think we should affirm on Rule 8 grounds, and may, under Sparling.

[3] Fed. R. Civ. P. 8(a)(2).

[4] Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (emphasis added).

[5] Id. (quoting Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989)).

[6] See, e.g., Nevijel v. N. Coast Life Ins. Co., 651 F.2d 671, 674 (9th Cir. 1981).

[7] McHenry v. Renne, 84 F.3d 1172, 1179-80 (9th Cir. 1996) (internal quotation marks omitted) (alteration in original).

[8] See, e.g., Von Poppenheim v. Portland Boxing & Wrestling Comm’n, 442 F.2d 1047, 1052 n.4 (9th Cir. 1971) (“Since harshness is a key consideration in the district judge’s exercise of discretion, it is appropriate that he consider the strength of a plaintiff’s case if such information is available to him before determining whether dismissal with prejudice is appropriate.”).

[9] Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012).

[10] See Yamamoto v. Bank of New York, 329 F.3d 1167, 1171, 1173 (9th Cir. 2003).

Merritt v. Countrywide Financial Corp.

Docket: 09-17678 Opinion Date: July 16, 2014
Judge: Berzon
Areas of Law: Banking, Real Estate & Property Law

Plaintiffs filed suit against Countrywide and others involved in their residential mortgage, alleging violations of numerous federal statutes. The district court dismissed the claims with prejudice and plaintiffs appealed. The court held that plaintiffs can state a claim for rescission under the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., without pleading that they have tendered, or that they have the ability to tender, the value of their loan; only at the summary judgment stage may a court order the statutory sequence altered and require tender before rescission – and then only on a case-by-case basis; and, therefore, the court reversed the district court’s dismissal of plaintiffs’ rescission claim and remanded for further proceedings. The court held that, although the limitations period in the Real Estate Settlement Practices Act (RESPA), 12 U.S.C. 2614, ordinarily runs from the date of the alleged RESPA violation, the doctrine of equitable tolling may, in the appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the violation; just as for TILA claims, district courts may evaluate RESPA claims case-by-case; and, therefore, in this case, the court vacated the dismissal of plaintiffs’ Section 8 of RESPA claims on limitations grounds and remanded for reconsideration.

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A California couple did not have to show that they could pay back a home-equity loan before legally challenging an allegedly predatory Countrywide mortgage, the 9th Circuit ruled Wednesday.
     After the lender refused to let them rescind a more-than $700,000 home loan and home equity line of credit, David and Salma Merritt sued Countrywide Financial Corp under the Truth in Lending Act (TILA) in 2009
     The Merritts claimed that their Countrywide agent had lied to them in 2006 about the details of their loan, promising a relatively low monthly payment but then jacking it up nearly threefold days before closing. They said that the agent also had failed to inform them that the final $4,400 monthly mortgage payment for their Sunnyvale home was based on “teaser rate,” and that their payments would rise even higher in the coming years.
     Countrywide’s agent, the home’s seller and an appraiser also all faced allegations of having conspired to inflate the value of the home in violation of the Real Estate Settlement Practices Act (RESPA). The couple further argued that the agent had failed to provide proper loan documentation, and that the home’s owner had lied about being the “selling agent.”

[COURTHOUSE NEWS]

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AG Coakley Sues Fannie Mae and Freddie Mac Over Their Refusal to Engage in Foreclosure Buyback Programs

AG Coakley Sues Fannie Mae and Freddie Mac Over Their Refusal to Engage in Foreclosure Buyback Programs

For Immediate Release – June 02, 2014

AG Coakley Sues Fannie Mae and Freddie Mac Over Their Refusal to Engage in Foreclosure Buyback Programs

Lawsuit Alleges Violation of State’s 2012 Anti-Foreclosure Law

BOSTON – Saying its refusal to engage in foreclosure buyback programs is unfairly and illegally causing Massachusetts families to lose their homes, Attorney General Martha Coakley has s ued the Federal Housing Finance Agency (FHFA) and the mortgage giants Fannie Mae and Freddie Mac pdf format of Commonweath v FHFA et al. file size 5MB for violating the state’s 2012 foreclosure prevention law.

Filed today in Suffolk Superior Court, the complaint pdf format of Commonweath v FHFA et al. file size 5MB alleges that Fannie Mae and Freddie Mac, currently under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law An Act to Prevent Unnecessary and Unreasonable Foreclosures. The first-in-the-nation law was proposed by AG Coakley and passed by the Legislature in response to the foreclosure crisis in an effort to prevent unnecessary foreclosures. Among other provisions, it prohibits creditors from blocking home sales to non-profits simply because the non-profit intends to resell the property back to the former homeowner.

One example of a buyback program, as cited in the complaint, is Boston Community Capital’s (BCC) “Stabilizing Urban Neighborhoods” Initiative (SUN). As part of the program, the organization buys foreclosed, bank-owned homes at their present market value and sells the properties back to the original homeowners if they qualify for affordable financing. Buyback programs like SUN prevent needless displacement of families that through an arrangement with a non-profit can afford to stay in their homes. Fannie Mae and Freddie Mac have continued to block buybacks even though they lose money in the process.

“It makes no sense for our federal government to stand in the way of this work to help struggling families stay in their homes, and it is illegal for Fannie and Freddie to do this in Massachusetts,” AG Coakley said. “For too long, Fannie and Freddie have been roadblocks to progress in addressing this foreclosure crisis, and I urge them to immediately reverse their policy on this common-sense program.”

Since 2012, AG Coakley has encouraged principal reduction by Fannie and Freddie as a critical foreclosure prevention tool. In an April 2012 letter to then-Acting FHFA Director Edward DeMarco, AG Coakley was joined by 10 other Attorneys General urging Fannie and Freddie to permit principal reduction in loan modifications. Despite a change in leadership, Fannie and Freddie continue to prohibit principal reduction.

AG Coakley sent another letter last month to FHFA’s new Director, Melvin Watt, stating that the current policies are in direct conflict with Massachusetts law and represent an economic loss for taxpayer-owned Fannie and Freddie.

In the complaint, filed today and citing the case Suero v. Freddie Mac, AG Coakley alleges that two of FHFA’s policies violate state law. Fannie and Freddie’s “arm’s length transaction” policy prohibits property sales to non-profits who resell to the original homeowner. The “make whole” policy has the same effect, as it prevents Fannie and Freddie from accepting anything less than the outstanding loan amount from the former homeowner or anyone seeking to resell or rent to the former homeowner.

Both SUN and the 2012 law were cited in a decision by the U.S District Court to issue a preliminary injunction in Suero v. Freddie Mac, preventing the foreclosure and sale of the Suero’s home in Dorchester. The decision also referenced a February 2013 letter the AG’s office sent to FHFA explaining that Massachusetts law now explicitly forbids banks and other servicers from rejecting offers from legitimate buyback programs merely because the property will be resold to the former homeowner.

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source: http://www.mass.gov

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LETTER | AG Coakley Urges, Threatens to Sue FHFA to Use Buyback Programs and Principal Reductions to Keep People in Their Homes

LETTER | AG Coakley Urges, Threatens to Sue FHFA to Use Buyback Programs and Principal Reductions to Keep People in Their Homes

AG to Review All Legal Options if FHFA Does Not Comply With Massachusetts Law

BOSTON – Saying in a letter pdf format of FHFA Letter 051414 file size 2MB today that the use of buyback programs and principal reductions are “key to helping homeowners recover from this foreclosure crisis,” Attorney General Martha Coakley urged the new director of the Federal Housing Finance Agency (FHFA) to use buybacks or face legal action.

“We believe that buyback programs implemented by credible not-for-profit institutions, and loan modification programs that permit principal reductions for distressed borrowers, are key to helping homeowners recover from this foreclosure crisis and restoring a healthy economy,” AG Coakley said in the letter to Melvin Watt, the new director of FHFA.

AG Coakley states that her office is reviewing all legal options as the mortgage giants Fannie Mae and Freddie Mac, currently under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law An Act to Prevent Unnecessary and Unreasonable Foreclosures.

The groundbreaking law requires that creditors not prohibit sales to non-profits like Boston Community Capital’s “Stabilizing Urban Neighborhoods” program (SUN). Through this initiative, BCC purchases a home that is typically owned by a lending bank at its current market value and finances its immediate resale to the former homeowner. Fannie Mae and Freddie Mac have continued to block buybacks even though they lose money in the process.

In the case Suero v. Freddie Mac, SUN and the 2012 Massachusetts law were both referenced in the decision by the U.S District Court to issue a preliminary injunction pdf format of Court Order 10-30-13 which prevented the foreclosure and sale of the plaintiff’s home in Dorchester. The decision also referenced a February 2013 letter pdf format of FHFA Letter 02-11-13 the AG’s office sent to FHFA explaining that Massachusetts law now explicitly forbids banks from refusing to consider offers from legitimate buyback programs merely because the property will be resold to the former homeowner.

Because FHFA has refused to change its policy, AG Coakley sent a new letter to Director Watt, stating that the current FHFA policy of prohibiting such sales, even at fair market value, is in direct conflict with the Massachusetts law and represents an economic loss for taxpayer-owned Fannie and Freddie.

“To date, [Fannie Mae and Freddie Mac] have not complied with this provision, which has unfortunately impeded the ability of buyback programs to maximize the number of borrowers they can assist, which in turn has hindered the broader goals of neighborhood stabilization and revitalization,” AG Coakley said. “Our office is considering all available legal avenues, including litigation, to ensure compliance with Massachusetts law, should FHFA fail to promptly amend its policies to allow Fannie Mae and Freddie Mac to participate in credible buyback programs.”

Buyback programs such as the SUN Initiative adhere to strict and conservative underwriting standards. For example, SUN provides only 30 year fixed-rate mortgages and as a result, financing is only extended to homeowners who can truly afford to stay in their homes, preventing displacement and avoiding neighborhood blight.

The letter also continues the push for principal reductions. Since 2012, AG Coakley has  encouraged principal reduction  by Fannie and Freddie as a critical foreclosure prevention tool. In an April 2012  letter  to then-Acting FHFA Director Edward DeMarco, AG Coakley was joined by 10 other Attorneys General urging Fannie and Freddie to permit principal reduction in loan modifications. Despite a change in leadership, Fannie and Freddie continues to prohibit principal reduction as a means of keeping people in their homes.

#########

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Posted in STOP FORECLOSURE FRAUD3 Comments

Fannie Mae Would Need New Bailout in Downturn, FHFA Says

Fannie Mae Would Need New Bailout in Downturn, FHFA Says

Bloomberg-

Fannie Mae and Freddie Mac (FMCC) could require an additional bailout of as much as $190 billion in a severe economic downturn, according to the results of stress tests released by the regulator for the U.S.-owned companies.

The two mortgage-finance giants, which have already taken $187.5 billion in taxpayer aid since 2008, would need more funds to stay afloat if home prices plummeted in a severe downturn, the Federal Housing Finance Agency said in a report today. The stress tests, mandated by the Dodd-Frank Act, use the same assumptions that the Federal Reserve does in gauging the ability of the nation’s largest banks to withstand a recession.

The results reflect the terms of the companies’ bailout, which require them to send to the Treasury all of their quarterly profits above a minimum net worth threshold. That money, counted as a return on the U.S. investment, prevents them from rebuilding capital or paying down debt to taxpayers.

“These results of the severely adverse scenario are not surprising given the company’s limited capital,” Fannie Mae (FNMA) Senior Vice President Kelli Parsons said in a statement. “Under the terms of the senior preferred stock purchase agreement, Fannie Mae is not permitted to retain capital to withstand a sudden, unexpected economic shock of the magnitude required by the stress test.”

The companies would need $84 billion to $190 billion by the end of 2015 in the worst circumstances, depending on accounting assumptions, the tests showed.

[BLOOMBERG]

FHFA Announces Results of Fannie Mae and Freddie Mac Stress Tests

FOR IMMEDIATE RELEASE
4/30/2014

Washington, DC – The Federal Housing Finance Agency (FHFA) today released a report providing updated information on possible ranges of future financial results of Fannie Mae and Freddie Mac under specified scenarios.  The report, Projections of the Enterprises’ Financial Performance, reflects results of stress tests Fannie Mae and Freddie Mac are required to conduct, starting this year, under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The stress tests are designed to determine whether Fannie Mae and Freddie Mac could absorb losses as a result of adverse economic conditions. 

The report also contains the results of annual financial results projections that FHFA has published since 2010 (the “FHFA scenarios”).  The FHFA scenarios reflect forward-looking financial projections across three possible house price paths and were developed in conjunction with Fannie Mae and Freddie Mac.  Next year, only the Dodd-Frank Act Stress Tests will be required.

Projections of the Enterprises’ Financial Performance

Additional links:

2014 Summary Instructions and Guidance
2014 Scenario Assumptions (PDF)
2014 Scenario Assumptions (spreadsheet)
2014 Global Market Shock Assumptions (spreadsheet)
2014 Reporting Templates – Enterprises (spreadsheet)

2014 Reporting Templates – Scenario Variables and Assumptions (spreadsheet)

© 2010-14 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






Posted in STOP FORECLOSURE FRAUD1 Comment

S.1187: Mortgage Forgiveness Tax Relief Act and Very Big Deal | AFR Sign On Letter Tax Relief Act

S.1187: Mortgage Forgiveness Tax Relief Act and Very Big Deal | AFR Sign On Letter Tax Relief Act

Hi Damian

I’ve attached a pretty powerful letter that was sent to Congress last week by Americans for Financial Reform on behalf of just about everybody in the country, according to the multiple signature pages. It urges quick action by legislators to extend and expand the mortgage debt tax relief provisions that expired at 12/31/2013. I hope you can post it.

Also, in case you think your readers might want to weigh in themselves, here’s a link to a website where they can track bills and quickly send letters of support or opposition directly to their elected representatives.
http://www.opencongress.org/bill/s1187-113/show

Surfing this site and reading the personalized letters suggests there was deliberate delay by various lenders in processing all sorts of pipeline deals before year-end (short sales, mods, refis). Therefore it looks like a lot of borrowers got stuck in a very bad tax place for 2014 through no fault of their own.

Just FYI, right now, this mortgage debt relief provision is also included in the more comprehensive “tax extenders” bill, S 1859 (also tabled), with about 50 other tax provisions that expired at 12/31/2013. Those are the provisions that Ron Wyden wants to work on with Orrin Hatch (Senate Finance Committee) this “spring.” But even if they can get the House to go along (Paul Ryan et al), it’s not clear which of the 50+ “extenders” will survive in a version that might become law.

To make those decisions, legislators will be paying close attention to the letters they get from constituents and funders, starting right about now. That’s because everything on the Hill will pretty much grind to a halt mid-summer until after the mid-term elections. After that, what will happen is anyone’s guess.

By the way, there’s been a lot of misinformation about who will get hit with big tax bills if the relief doesn’t get extended for 2014. Folks who truly have nothing will likely NOT be in trouble because they are “insolvent” for both IRS and Chapter 7 Br purposes.

But here’s the danger – Anyone who is still hanging on is probably not destitute. These folks probably have wages and/or assets that are vulnerable at some level to either the IRS or the Bankruptcy Court. So there may be no way out for them unless Congress acts.

For example, older workers who have qualified retirement plan savings (IRAs 401s 457s, etc) could lose them because they are not off-limits to the IRS the same way as they would be for bankruptcy. They might even have to pay big early withdrawal penalties if those savings have to be used to pay the IRS.

The attached letter explains how younger families who took cash-out refis during the boom are also vulnerable.

Down Load PDF of This Case

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Onewest Bank, FSB v Dewer | NYSC – MERS Assignment/Note Fail, Charles Boyle Affidavit Fail, FDIC, as the receiver for IndyMac to OneWest Bill of Sale Fail

Onewest Bank, FSB v Dewer | NYSC – MERS Assignment/Note Fail, Charles Boyle Affidavit Fail, FDIC, as the receiver for IndyMac to OneWest Bill of Sale Fail

NEW YORK SUPREME COURT – QUEENS COUNTY

ONEWEST BANK, FSB,
Plaintiff,

-against-

YVONNE G. DEWER, ET AL.,
Defendants.

Plaintiff commenced this action on September 10, 2010 to reform and foreclose a
mortgage encumbering the real property known as 119-22 Inwood Street, Jamaica, New York
given by defendants Dewer as security for the payment of a note, evidencing an obligation
in the principal amount of $403,750.00 plus interest. The mortgage names IndyMac Bank,
F.S.B. (IndyMac), as the lender and Mortgage Electronic Registration Systems, Inc. (MERS),
as the nominee for the lender and the lender’s successors and assigns, and as the mortgagee
of record for the purpose of recording the mortgage. Plaintiff alleged in its complaint that
it is the holder of the note and subject mortgage, and that defendants Dewer defaulted under
the terms of the mortgage and note, and as a consequence, it elected to accelerate the entire
mortgage debt. It also alleged that, due to a clerical error, the mortgage was recorded without
a legal description included, and the legal description corresponding to the address of the
property should be incorporated into the mortgage nunc pro tunc.

Defendants Dewer served a combined answer, asserting various affirmative defenses,
including lack of standing, and interposing counterclaims. Plaintiff served a reply to the
counterclaims. Plaintiff did not cause defendants “John Doe” and “Jane Doe” to be served
with process because plaintiff determined that they are unnecessary party defendants.
That branch of the motion by plaintiff for leave to amend the caption deleting
reference to defendants “John Doe” and “Jane Doe” is granted.

It is ORDERED that the caption shall read as follows:

SUPREME COURT OF THE STATE OF NEW YORK
QUEENS COUNTY
—————————————————————
ONEWEST BANK, FSB, Index No. 23000 2010
Plaintiff,

-against-

YVONNE G. DEWER, BRIAN K. DEWER, and
ELIZABETH DEWER,
Defendants.
—————————————————————-

It is well established that the proponent of a summary judgment motion “must make
a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient
evidence to demonstrate the absence of any material issues of fact” (Alvarez v
Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York,
49 NY2d 557 [1980]). To establish a prima facie case in an action to foreclose a mortgage,
the plaintiff must produce the mortgage, the unpaid note, bond or obligation and evidence
of default (see Baron Assoc., LLC v Garcia Group Enters., Inc., 96 AD3d 793 [2d Dept
2012]; Citibank, N.A. v Van Brunt Props., LLC, 95 AD3d 1158 [2d Dept 2012]). Where
standing is put into issue by the defendant, the plaintiff must prove its standing in order to
be entitled to relief (see Deutsche Bank Nat. Trust Co. v Haller, 100 AD3d 680 [2d Dept
2012]; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753 [2d Dept 2009]; Wells Fargo Bank
Minn., N.A. v Mastropaolo, 42 AD3d 239, 242 [2d Dept 2007]). A plaintiff establishes its
standing in a mortgage foreclosure action by demonstrating that it is both the holder or
assignee of the subject mortgage and the holder or assignee of the underlying note at the time
the action is commenced (see Deutsche Bank Natl. Trust Co. v Rivas, 95 AD3d 1061,
1061-1062 [2d Dept 2012]; Bank of N.Y. v Silverberg, 86 AD3d 274, 279 [2d Dept 2011];
see Homecomings Fin., LLC v Guldi, 108 AD3d 506 [2d Dept 2013]; US Bank N.A. v Cange,
96 AD3d 825, 826 [2d Dept 2012]; U.S. Bank, N.A. v Collymore, 68 AD3d at 753-754;
Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept 2009]). “Either a written
assignment of the underlying note or the physical delivery of the note prior to the
commencement of the foreclosure action is sufficient to transfer the obligation, and the
mortgage passes with the debt as an inseparable incident” (U.S. Bank, N.A. v Collymore,
68 AD3d at 754; see HSBC Bank USA v Hernandez, 92 AD3d 843 [2d Dept 2012]; see
Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 108 [2d Dept 2011]).

In support of that branch of the motion for summary judgment, plaintiff offers, among
other things, a copy of the pleadings, affidavits of service upon defendants Dewer, an
affirmation of regularity by its counsel, a copy of the subject mortgage, underlying note, an
assignment dated August 26, 2010, and the bill of sale providing for the sale of certain assets
of IndyMac by the Federal Deposit Insurance Company (FDIC), as the receiver for IndyMac
to plaintiff, and an affidavit dated June 21, 2013 of Charles Boyle, an officer of plaintiff. In
his affidavit, Mr. Boyle states plaintiff is the holder and in possession of the original note,
and that plaintiff is the assignee of the “security instrument” for the loan, and defendants
Dewer defaulted in paying the monthly mortgage installment due under the mortgage on
June 1, 2009 and thereafter. The copy of the note presented includes an undated endorsement
in blank, without recourse, by Vincent Dombrowski, as the vice president of IndyMac.

Defendants Dewer oppose the motion, asserting that plaintiff has failed to make a
prima facie showing of standing to commence this action.

To the extent plaintiff contends it is the assignee of the mortgage and note by virtue
of an assignment executed by MERS, plaintiff has failed to show MERS had been the holder
of the note and mortgage, or that MERS had been given an interest in the underlying note by
the lender or specifically authorized to assign the subject note (see Bank of N.Y. v Silverberg,
86 AD3d at 283). In addition, although Mr. Boyle makes reference to the possession of the
note by plaintiff, his affidavit does not give any factual details of a physical delivery of the
note and when the note was endorsed in blank (see Homecomings Fin., LLC v Guldi,
108 AD3d 506 [2d Dept 2013]; HSBC Bank USA v Hernandez, 92 AD3d 843). The
affirmation of plaintiff’s counsel dated July 10, 2013, furthermore, does not indicate it is
based upon personal knowledge and lacks detail as to when the note was endorsed and
physically came into possession by plaintiff. That a copy of the note with the endorsement
was annexed as an exhibit to the complaint filed with the summons does not, without more,
establish that the original note with the endorsement was in physical possession of plaintiff
or its counsel at the time of the institution of the action. To the extent plaintiff additionally
relies upon the bill of sale to demonstrate it had standing to bring this action, the court
declines its invitation to search the internet to verify that the subject mortgage was part of the
assets sold by the FDIC to plaintiff. More importantly, the copy of the bill 1 of sale does not
itself establish that plaintiff was the holder or assignee of the subject mortgage and note or
had physical possession of the note endorsed in blank at the time of the transfer of the assets
by the FDIC to plaintiff or the time of the commencement of this action (cf. JP Morgan
Chase Bank Nat. Assn. v Miodownik, 91 AD3d 546 [1st Dept 2012], lv to appeal dismissed
19 NY3d 1017 [2012]; JP Morgan Chase Bank, N.A. v Shapiro, 104 AD3d 411, 412
[1st Dept 2013]). Under such circumstances, plaintiff has failed to show how or when it
became the lawful holder of the note either by delivery or valid assignment of the note to it
(see Citimortgage, Inc. v Stosel, 89 AD3d 887, 888 [2d Dept 2011]; Bank of N.Y. v
Silverberg, 86 AD3d at 283). As such, that branch of the motion by plaintiff for summary
judgment against defendants Dewer is denied.

With respect to that branch of the motion by plaintiff to strike the affirmative defenses
asserted by defendants Dewer in their answer, plaintiff bears the burden of demonstrating
that the defenses are without merit as a matter of law (see Butler v Catinella, 58 AD3d 145,
157-148 [2d Dept 2008]; Vita v New York Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept
2006]).

With respect to the first affirmative defense and the first counterclaim asserted by
defendants Dewer in their answer, defendants Dewer assert they are entitled to rescind the
loan agreement pursuant the Federal Truth in Lending Act (15 USC § 1601 et seq.) (TILA),
and the TILA implementing regulations (found in Federal Reserve Board Regulation Z
[Regulation Z] at 12 CFR 226), and seek to recover actual and statutory damages for
violations of TILA, in addition to rescission. Defendants Dewer also seek as a second and
third counterclaim a judgment declaring the subject mortgage to be void. Plaintiff offers
evidence that the subject loan transaction was exempt from the requirements of TILA at the
time of the making of the loan because the non-exempt total points and fees charged in
relation to the loan did not exceed 8% of the entire principal loan amount (see
former 15 USC § 1602 [aa] [1] [B]; see also 15 USC § 1605 [e]; 12 CFR 226.4). In addition,
plaintiff offers evidence that it provided the required material disclosures to defendants
Dewer in compliance with TILA at the closing and, therefore, any right to rescind was not
extended to three years after the date of the consummation of the transaction
(see 15 USC § 1635 [f]). Defendants Dewer have failed to come forward with any proof to
show TILA was applicable to the subject loan at the time of its making, or that any material
written representations or disclosures made to them were in conflict with the terms of the
subject mortgage and note. Under such circumstances, that branch of the motion by plaintiff
to dismiss the first affirmative defense and the counterclaims asserted by defendants Dewer
is granted.

That branch of the motion by plaintiff to dismiss the second affirmative defense
asserted by defendants Dewer in their answer based upon failure to state a cause of action is
granted. On its face, the complaint states causes of action for foreclosure and reformation
of the mortgage.

That branch of the motion by plaintiff to dismiss the third, fourth, fifth, twelfth,
thirteenth, nineteenth, and twentieth affirmative defenses based upon unjust enrichment,
estoppel, “condonation and ratification,” the doctrine of unclean hands, waiver, “consent to
Defendants’ conduct,” and participation in wrongdoing, respectively, is granted. They have
failed to allege or prove any facts supporting these conclusions of law (see Moran
Enterprises, Inc. v Hurst, 96 AD3d 914 [2d Dept 2012]; Glenesk v Guidance Realty Corp.,
36 AD2d 852 [2d Dept 1971], abrogated on other grounds by Butler v Catinella,
58 AD3d 145; MacIver v George Braziller, Inc., 32 Misc 2d 477 [Sup Ct, NY County 1961];
CPLR 3018 [b]).

That branch of the motion by plaintiff to dismiss the seventh, eighth, ninth and
eighteenth affirmative defenses of defendants Dewer based upon negligence and assumption
of risk, culpable conduct of third parties and plaintiff, and lack of proximate cause,
respectively, is granted. The concepts of negligence, assumption of risk, culpable conduct
and proximate cause are related to tort. The claims asserted by plaintiff herein relate to a
default under the mortgage and reformation of the mortgage, as opposed to tortious conduct
and thus, any affirmative defense based upon a notion of culpable or tortious conduct
is unavailable herein (see CPLR 1401; Pilweski v Solymosy, 266 AD2d 83 [1st Dept 1999];
Nastro Contracting Inc. v Agusta, 217 AD2d 874 [3d Dept 1995]; Schmidt’s Wholesale, Inc.
v Miller & Lehman Const., Inc., 173 AD2d 1004 [3d Dept 1991]; Castleton Holding Corp.
v Forde, 15 Misc 3d 1111[A] [Sup Ct, Kings County 2007]).

The branch of the motion by plaintiff to dismiss the sixth, fifteenth, sixteenth and
seventeenth affirmative defenses asserted by defendants Dewer is granted. These defenses
are based upon allegations that plaintiff failed to exercise good business judgment,
unjustifiably relied on representations and misrepresentations, and failed to perform due
diligence and make proper inquiry. Such allegations, without more, do not constitute a
defense to a foreclosure action. The legal relationship between a borrower and a lending
bank is normally one of debtor and creditor (see Trustco Bank, Nat. Assn. v Cannon Bldg.
of Troy Assocs., 246 AD2d 797 [3d Dept 1998]), and defendants Dewer have failed to allege
any facts which would demonstrate that a duty of care was owed to them by the lender in the
origination of the loan.

That branch of the motion by plaintiff to dismiss the tenth and fourteenth affirmative
defenses asserted by defendants Dewer based upon failure to mitigate damages and lack of
damages is granted. Mitigation of damages is not an affirmative defense to an action to
foreclose a mortgage. Any dispute as to the exact amount owed plaintiff pursuant to the
mortgage and note, may be resolved after a reference pursuant to RPAPL § 1321 (see
Crest/Good Mfg. Co, v Baumann, 160 AD2d 831 [2d Dept 1990]).

Defendants Dewer assert as an eleventh affirmative defense that plaintiff is guilty of
laches in bringing this action. Laches is not a defense to a mortgage foreclosure proceeding
where, as here, the action was commenced within the statute of limitations (CPLR 213 [4];
see New York State Mtge. Loan Enforcement & Admin. Corp. v North Town Phase II Houses,
Inc., 191 AD2d 151 [1st Dept 1993]; Schmidt’s Wholesale, Inc. v Miller & Lehman Const.,
Inc., 173 AD2d 1004 [3d Dept 1991]). Even if the defense was available here, defendants
Dewer have not shown that they changed their position, or failed to take some action to their
prejudice as a result of the alleged delay.

The allegation that plaintiff suffered no damage because it was insolvent does not
constitute an affirmative defense to a foreclosure action. That branch of the motion by
plaintiff to dismiss the twenty-first affirmative defense asserted by defendants Dewer is
granted.

That branch of the motion by plaintiff to dismiss the twenty-second affirmative
defense asserted by defendants Dewer based upon lack of standing is denied (supra at 3-4).

Accordingly, the branch of plaintiff’s motion for an order amending the caption is
granted, as ordered, supra. The branch of the motion for an order granting plaintiff summary
judgment is denied. Those branches of the motion for an order dismissing the first, second,
third, fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth,
fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth, twentieth, and twentyfirst
affirmative defenses, and all counterclaims are granted.

Dated: February 6, 2014
J.S.C.

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Posted in STOP FORECLOSURE FRAUD1 Comment

This is the Story of a botch Mello Roos Offering, the first for the City of Indio

This is the Story of a botch Mello Roos Offering, the first for the City of Indio

CROSS POSTED w/ PERMISSION Of Terralago Mello Roos -

Indio CFD 2004-3


This is the Story of a botch Mello Roos Offering, the first for the City of Indio.

Indio Community Facilities District (CFD) 2004-3 is a Mello Roos Tax District issued by The City of Indio California, and it was their very first.  An Intro to Mello Roos Tax Districts


Mello Roos Tax is an extra tax that a City may place on new development and the City gets say $26.3 million and splits it with the Developer.

Here they took $26.3 million, and used it for things that did not help the development.

It was 98% completed.

It was used to help another undeveloped area.

It was used to help the Indio Water Authority build its own infrastructure.

But should the undeveloped area pay it back?  


The City says no.

That does not pass the smell test.  Why would the City do that?  

Rooftops, yes they want homes in Indio.

They now have a new developer and have worked out a secret deal which uses Area 1 money as credits for the new developer to build.

The builder will have no Mello Roos Tax.  
The houses will sell for $70,000 more without the Mello Roos Tax.  

Won’t that hurt Area 1 home sales?  

Yes, that is why the fight.

 

by K. Hovnanian’s® Four Seasons at Terra Lago
New homes coming soon
 

K. Hovnanian’s Four Seasons at Terra Lago in Indio is our newest upcoming community for those 55 and better! This brand new collection of homes at Terra Lago will feature single family homes up to approximately 2,747 square feet and up to 4 bedrooms. These open home designs feature spacious living areas perfect for functional living. K. Hovnanian’s Four Seasons is known for its resort-style living, and that’s just what you’ll find at The Lodge clubhouse. Here you will experience incredible amenities such as a state-of-the-art fitness center with an aerobics/yoga studio, ballroom, beauty salon with massage room, and an indoor pool. Outdoors, you will find a resort-style pool with spa and cabanas, a bocce ball court, tennis courts, and so much more! This active adult community features fun activities, clubs and events for all of your interests including crafting, games, and more. Join our VIP Interest list to be among the first to receive updates on this exciting new community and start planning your move now! Call 888-408-6590! less

How is that possible?

The City issues a bond for the money and future residents or homeowners, who move in pay back the money over 30 years.

It is not easy to understand.

If there is a missed payment then the City can sell their house.

I forgot to mention, the Developer/landowner votes for the tax before they meet you.

It is hard to understand.  When questioned by Area 1 home owners the City says.  You signed the paper. Desert Sun February 4, 2014 by Tatiana Sanchez

I guess investors signed Bernie Madoff’s papers acknowledging they may loose money, but is it legal?

Why did this confusing tax happen in the first place?

It was created because California Proposition 13 limited property tax to 1%.  Proposition 13 and Mello Roos Taxes

So California Cities needed money, and the California Government passed the Mello Roos Act in 1986.  The Mello Roos Code CA Government Code 53311 – 53368

This allows Developers and a City uses their tax exempt status to help issue bonds and every deal is done behind closed doors, and there is no oversight.  

None? 

No None!  


Is there a Mello Roos Police?  No and believe you me I have begged for help to expose the problem.

No one other than the lawyers who make money from it who understand it.  

Sounds like that should change.  

I am trying, but I need help.  All work done for free because it is right to do it.     THE PETITION TO CHANGE THE RATE AND METHOD OF THE TAX


The Idea for the City (“ME”) to have instant money in their pockets and have future residents pay the bill over 30 years is appealing.  To the City and Developer.

So what happened here?

It is really bad, and it would take a long to explain it.

So read this:  The Petition to Amend CFD 2004-3 Rate Method and Apportionment (“RMA”)

If that interests you there is much more.

What happened here is really unfair, and the City appears to have mismanaged $26.3 million. 

 You mean they did not follow the rules?  

YesCFD 2004-3 Formation Issues.

 

 

Luckily the property owners woke up in time before there was another shady dealing, and the City says “Trust Me”.  Letters to City for to help Area 1 homeowners

If you look at the map of Indio below, only 1 community pays $360.00 per month for 30 years.  Or for that matter any Mello Roos Tax.

It paid for Wyndham Resorts Water problems and $9 million for others.  

Certainly someone wants to pay them back.  Don’t They?  I mean it is only fair.

But who owns the properties?

 Rabobank Na.A. in one of their various Limited Liability Companies
RB Indio Holdings, LLC or RB Terra Lago or even another with the builder K-Hovanian.

But they should be able to afford to pay more than the homeowners, shouldn’t they as they are a Bank and a major developer.

I guess we will see.
Area 1 Red – Area 2 Green -Wyndham Top

 

 


AREA 1 HOMEOWNERS PAY $360.00 PER MONTH FOR 30 YEARS AND ALL THE STREETS ARE PRIVATE.


98% of the infrastructures were in by the September 2005 $26.3 million funding.

And whats worse, there are also 110 lots owned by Rabobank, N.A. around the lake – &- they don’t pay either.

The City has made us fight to get anything.


Why would the City of Indio be afraid if they did all of this correctly and the money spent as they say?


Why would they not do a Forensic Audit?


Why not get a Bond Counsel Involved instead of the City Attorney?


Those are good questions and the City just ignores those questions.

If you just watch the recent council meeting on February 4, 2014, you would see what I believe are lies that the City Attorney is spouting or pontificating.


But what are you going to do?

Keep Fighting.

I bet you are getting paid alot to do this aren’t you?

No I am sorry to say but someone must do it so other will be protected, the Mello Roos Laws certainly don’t do it.

We  must fight again.

WHO GOT THE MONEY – - -THE CITY OF INDIO.

AREA 1 LEFT EMPTY 110 LOTS AROUND THE LAKE.  THEY DO NOT PAY ANYTHING.  AREA 2 AND WYNDHAM RESORT PAY NOTHING AND BENEFIT.

CROSS POSTED w/ PERMISSION Of Terralago Mello Roos -

© 2010-14 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






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Lainey Hashorva: Stealing Home

Lainey Hashorva: Stealing Home

Well at this point it’s pretty common knowledge that all the bloated banksters in the cartel are literally sucking the soul out of us, homeowner by homeowner, house by house, city by city, state by state. Puffing themselves up like the Pillsbury Doughboy that ate Godzilla and Manhattan. Picking their teeth with our land records.

So where are the Attorneys General? Where is that, oh geez, what was it called again? Oh yeah, The Mortgage Fraud Task Force. What ever happened to that? Maybe Jamie Dimon bought it for his daughter and commemorated it into a nice little holiday snow globe for his 2013 holiday party give away bags.

In California we have the oh so special California Homeowner Bill of Rights. AG Kamala Harris beamed, eyes glistening at the signing of that photo op behind Gov Jerry Brown, as if she’d just handed over the mega lottery loot to a homeless family of twelve. Kamala Harris is always camera ready, always ready for her next sound bite on CNN or PR release in front of the state flag. Her career path looks promising, maybe the Supreme Court, DOJ or Governor. But try to engage her in anything that actually has any real teeth to it, like say for example, millions of Californians losing their homes to Fraudclosure, neighborhoods being decimated by empty homes and neglected properties, a second tsunami of fraudclosures looming, and she’ll block you from her Facebook page. The Homeowner “Bill of Rights” offers Californians false hope of surviving the Homeowner Hunger Games. New rules and all that. It’s like telling Tony Soprano’s men that they can’t whack you while Pauly Walnuts is still raping you. Wait your turn.

But I digress. Where does a homeowner actually get anyone to really hear them out? To fully understand the soul sucking misery that we find ourselves in when trying to work with these mega banks that are on robotic search and destroy mode? Who really understands the complexities? The anguish and the insanity of the matrix we are placed in when following the “rules” in place to try to save what is ours in these unprecedented times; Our homes. Our investment. Our legal rights in a complex bloody labyrinth of red tape and manufactured BS.

We try our congressional office, they smile and nod with compassion and knowing. Tsk tsk sigh. They act as if they’ll try their best to intervene on our behalf, set you up with a special Single Point Of Contact (aka SPOC) in the “executive offices” that have a little more accountability since it’s a US Congressional office letterhead and all. Sorta put more time constraints on Pauly Walnuts to respond to our requests and the infinite supply of paperwork we fax, mail, Fed Ex and produce time after time after time after time after time. We have turned into a paper producing incoherent human copy machine, holding the tiniest pessimistic optimism somewhere in the back of our minds that this time we have a “complete package” with every T crossed. We have become wild eyed Vegas strip junkies gambling the entire nest egg at this point. Come on baby, ten times is the charm. I’m due damn it I’m due. Alright one more time….

“What is it?” we wonder. How did we get here? This abyss of systematic bureaucratic bankster abuse.

It’s epic. The stakes are as high as it gets. We are in deep. We begin to realize that our congressional offices are as useful as a confession to a child molester posing as a priest. We realize our letters to the AGs, the Consumer Financial Protection Agency, the Office of the Comptroller of the Currency, Oprah, Obama, Jill Biden’s manicurist, the HOPE hotline. (How sad is that? The HOPE hotline?) No answers there either.

We somehow break through the imposed shame that everyone keeps to themselves as homeowners in this position been conveniently branded as “deadbeats”. We feel like losers. We feel so alone, so lost in this matrix of complexities, legalities, and consequences. The stakes are so high, our faith is so fragmented.

We begin to talk about it with friends and family. We start to put it out there little by little as to how much we are struggling with these obstacles, these unprecedented times, these impenetrable banks that supposedly have programs in place to assist us in “Making Home Affordable”. Banks have rules right? Our govt has laws right? Where are we in this big picture? Don’t we as homeowners and citizens have a right to stand our ground, to keep what we built against false claims and lack of standing, aka “show me the note” dude?

Who is there for us in this vapid game we’ve been pulled into in good faith to save our homes? Our investments, our retirement? Who?

WE are. We are there for each other. We start to connect and talk about the lawlessness, the impossible inarticulate anguish and insanity we’ve been exposed to in the guise of sustaining our homes. We start to listen to each other’s stories and the similarities begin to reflect clear patterns of abuse. Clear patterns of harm and of our undoing by instruction. Step by step, we have blindly and diligently in all good faith followed the instructions we were given by the servicing bank that tells us we won’t be considered as having a legitimate hardship unless we are in default, that we need to miss a few payments to receive assistance, submit and resubmit hundreds of pages of documents again and again and again until we start to realize it’s all rigged. A big fat hoax. The biggest Ponzi scheme since Bernie Madoff, only this is multiplied times millions of families and individuals. Millions of titles and altered titles. This scam is unprecedented. The biggest financial sting in our history. The modern day bankster business plan. Wells Fargo, “Together we’ll go far”. Welcome to modern day psychological terrorism. Who’s gonna be the last man or woman standing? Who’s more likely to run out of money, stamina, steam and wherewithal first?

Yes indeed, Wells Fargo Sucks, and so does Bank of America, Chase, Citi, Ocwen, Nationstar, Penny Mack. What a coincidence huh? Ever get the feeling they’re the same criminal enterprise? The same robo signing Caligraphy workshops. The same bank rebranding themselves hand over fist, trying to erase their tracks, complicate what they confiscate unlawfully. They all seem to be playing the same shell game, the same abuses and patterns in place ultimately to bring about the swift demise of the American Homeowner. The modification of the middle class, the mastication and regurgitation of the American dream. “Here ya go, sorry for the confusion. Here’s a few thousand dollars for the relocation. Three days to vacate. Your house has been auctioned off. Don’t worry, if you’re lucky maybe we’ll rent it back to you. Sign here. Love, Linda Green.”

Yes, #WellsFargo#Sucks. Hashtag that #John Stumpf and all the pathetic SPOCs that service your robo signing, loss of docs, cubicle monkeys selling their souls for a Bed Bath and Beyond gift card, dressing as homeless people at your Halloween office parties, SPOCs assisting in the take-down of the American homeowner, SPOCs that redirect us, disconnect us and are complicit in the zombie fee collecting business plan to abusively foreclose us into oblivion. “This call will be monitored and recorded. This is an attempt to collect a debt”. Really? Show me the money? Show me the note. Show me the securitized debt. “Hello. Hello?”

Not only did the worlds biggest banks and their henchmen the Department of Justice, the AGs, the lack of hope on the Hope hotline take down the world economy, the business plan in place is to cut us off at the knees as we attempt (by following their rules) to stagger to our feet. To speak truth to corrupt power.

Well guess what. We are on our feet. We are talking to one another, networking, building coalitions, groups of activists. Home grown ground troops. We are comparing notes, robo signer names, editorial email lists, servicing abuses, patterns of fraud. We are deciphering the complexities in the lack of standing these big bad blowhards have in the homeowner hunger games. We are armed with the power of what stubborn strong willed fighters on a mission have in common. We are taking names and blasting them out to every Facebook group, Twitter feed and Instagram stream we can muster – all day every day. The TRUTH. WE the people are showing up for each other and it is a powerful force to reckon with. The truth is a potent undeniable living thing, and if you present the truth in regard to the law, even Pauly Walnuts goes to the big house at some point or sleeps with the fish. Occupy the truth. Move your money from these criminal institutions to smaller community banks and credit unions. Demand everything in writing, record calls, put them on defense and stay on offense. Share share share with like minded others. Yes it’s the Homeowner Hunger games, but we are hungry and we have nothing to lose. Time to bite the vampire and bleed them out. Wake up and join us. They are coming for us, but much to their astonishment we are not running anywhere but directly AT them. WE are coming for them.

Join us at “Wells Fargo Sucks” (group) and “Fraudclosure Fighters” (group pages) on Facebook. Several other groups as well (Home Defenders League, Occupy Our Homes, Bank Fraud Revealed, and many many more) in which we network, cross reference, decipher, support, take names, graph charts, network with auditing forensic experts and attorneys, Occupy and serve one another in the common quest to dismantle the Fraudclosure machine, expose the servicing abuses, bringing the truth HOME in seeking justice and saving ourselves against an arrogant out of control Goliath that never saw us coming.

We are the heroes we’ve been waiting for. Join us.

Lainey Hashorva

Please forgive typos – my brain is faster than my fangers.

.

Lainey Hashorva is a Social Media Activist, Investigative Journalist and Entrepreneur. Join the discussion on Facebook in her group, Fraudclosure Fighters with like minded others. Please visit her ETSY store LaineyBean.

 

© 2010-14 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






Posted in STOP FORECLOSURE FRAUD9 Comments

CFPB Finance & Services Complaints Center

CFPB Finance & Services Complaints Center

CFPB Complaints

 

Scroll down and if you have an issue be sure to file a complaint.

 

 

 

 

 

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Company Name More Information About
1st Alliance Lending Click Here 1st Alliance Lending complaint, 1st Alliance Lending complaints, 1st Alliance Lending dispute, 1st Alliance Lending disputes
1st Fidelity Loan Servicing Click Here 1st Fidelity Loan Servicing complaint, 1st Fidelity Loan Servicing complaints, 1st Fidelity Loan Servicing dispute, 1st Fidelity Loan Servicing disputes
1st Franklin Financial Corporation Click Here 1st Franklin Financial Corporation complaint, 1st Franklin Financial Corporation complaints, 1st Franklin Financial Corporation dispute, 1st Franklin Financial Corporation disputes
1st Maryland Mortgage Corporation Click Here 1st Maryland Mortgage Corporation complaint, 1st Maryland Mortgage Corporation complaints, 1st Maryland Mortgage Corporation dispute, 1st Maryland Mortgage Corporation disputes
1st Midwest Mortgage Corp Click Here 1st Midwest Mortgage Corp complaint, 1st Midwest Mortgage Corp complaints, 1st Midwest Mortgage Corp dispute, 1st Midwest Mortgage Corp disputes
21st Mortgage Corporation Click Here 21st Mortgage Corporation complaint, 21st Mortgage Corporation complaints, 21st Mortgage Corporation dispute, 21st Mortgage Corporation disputes
360 Mortgage Click Here 360 Mortgage complaint, 360 Mortgage complaints, 360 Mortgage dispute, 360 Mortgage disputes
Able Mortgage Click Here Able Mortgage complaint, Able Mortgage complaints, Able Mortgage dispute, Able Mortgage disputes
Absolute Mortgage Company Inc. Click Here Absolute Mortgage Company Inc. complaint, Absolute Mortgage Company Inc. complaints, Absolute Mortgage Company Inc. dispute, Absolute Mortgage Company Inc. disputes
Academy Mortgage Click Here Academy Mortgage complaint, Academy Mortgage complaints, Academy Mortgage dispute, Academy Mortgage disputes
Access Group Click Here Access Group complaint, Access Group complaints, Access Group dispute, Access Group disputes
ACE Cash Express Inc. Click Here ACE Cash Express Inc. complaint, ACE Cash Express Inc. complaints, ACE Cash Express Inc. dispute, ACE Cash Express Inc. disputes
Acopia, LLC Click Here Acopia, LLC complaint, Acopia, LLC complaints, Acopia, LLC dispute, Acopia, LLC disputes
Acre Mortgage Click Here Acre Mortgage complaint, Acre Mortgage complaints, Acre Mortgage dispute, Acre Mortgage disputes
ACS Education Services Click Here ACS Education Services complaint, ACS Education Services complaints, ACS Education Services dispute, ACS Education Services disputes
Advance Mortgage Corporation Click Here Advance Mortgage Corporation complaint, Advance Mortgage Corporation complaints, Advance Mortgage Corporation dispute, Advance Mortgage Corporation disputes
Advance Title & Abstract, Inc. Click Here Advance Title & Abstract, Inc. complaint, Advance Title & Abstract, Inc. complaints, Advance Title & Abstract, Inc. dispute, Advance Title & Abstract, Inc. disputes
AES/PHEAA Click Here AES/PHEAA complaint, AES/PHEAA complaints, AES/PHEAA dispute, AES/PHEAA disputes
Alabama Housing Finance Authority Click Here Alabama Housing Finance Authority complaint, Alabama Housing Finance Authority complaints, Alabama Housing Finance Authority dispute, Alabama Housing Finance Authority disputes
Alaska Commission on Post Secondary Education Click Here Alaska Commission on Post Secondary Education complaint, Alaska Commission on Post Secondary Education complaints, Alaska Commission on Post Secondary Education dispute, Alaska Commission on Post Secondary Education disputes
Allen Tate Mortgage Services, Inc. Click Here Allen Tate Mortgage Services, Inc. complaint, Allen Tate Mortgage Services, Inc. complaints, Allen Tate Mortgage Services, Inc. dispute, Allen Tate Mortgage Services, Inc. disputes
Allied International Credit Corporation Click Here Allied International Credit Corporation complaint, Allied International Credit Corporation complaints, Allied International Credit Corporation dispute, Allied International Credit Corporation disputes
Allied Mortgage Group Click Here Allied Mortgage Group complaint, Allied Mortgage Group complaints, Allied Mortgage Group dispute, Allied Mortgage Group disputes
Ally Bank Click Here Ally Bank complaint, Ally Bank complaints, Ally Bank dispute, Ally Bank disputes
Alpine Mortgage Services, LLC Click Here Alpine Mortgage Services, LLC complaint, Alpine Mortgage Services, LLC complaints, Alpine Mortgage Services, LLC dispute, Alpine Mortgage Services, LLC disputes
Amcap Mortgage, Ltd. Click Here Amcap Mortgage, Ltd. complaint, Amcap Mortgage, Ltd. complaints, Amcap Mortgage, Ltd. dispute, Amcap Mortgage, Ltd. disputes
Amegy Bank Click Here Amegy Bank complaint, Amegy Bank complaints, Amegy Bank dispute, Amegy Bank disputes
American Advisors Group Click Here American Advisors Group complaint, American Advisors Group complaints, American Advisors Group dispute, American Advisors Group disputes
American Credit Acceptance, LLC Click Here American Credit Acceptance, LLC complaint, American Credit Acceptance, LLC complaints, American Credit Acceptance, LLC dispute, American Credit Acceptance, LLC disputes
American Eagle Mortgage Co., LLC Click Here American Eagle Mortgage Co., LLC complaint, American Eagle Mortgage Co., LLC complaints, American Eagle Mortgage Co., LLC dispute, American Eagle Mortgage Co., LLC disputes
American Equity Mortgage, Inc. Click Here American Equity Mortgage, Inc. complaint, American Equity Mortgage, Inc. complaints, American Equity Mortgage, Inc. dispute, American Equity Mortgage, Inc. disputes
American Federal Mortgage Corporation Click Here American Federal Mortgage Corporation complaint, American Federal Mortgage Corporation complaints, American Federal Mortgage Corporation dispute, American Federal Mortgage Corporation disputes
American Fidelity Mortgage Services, Inc. Click Here American Fidelity Mortgage Services, Inc. complaint, American Fidelity Mortgage Services, Inc. complaints, American Fidelity Mortgage Services, Inc. dispute, American Fidelity Mortgage Services, Inc. disputes
American Finance House of Lariba Click Here American Finance House of Lariba complaint, American Finance House of Lariba complaints, American Finance House of Lariba dispute, American Finance House of Lariba disputes
American Financial Lending, Inc. Click Here American Financial Lending, Inc. complaint, American Financial Lending, Inc. complaints, American Financial Lending, Inc. dispute, American Financial Lending, Inc. disputes
American Financial Network, Inc. Click Here American Financial Network, Inc. complaint, American Financial Network, Inc. complaints, American Financial Network, Inc. dispute, American Financial Network, Inc. disputes
American Financial Resources, Inc. Click Here American Financial Resources, Inc. complaint, American Financial Resources, Inc. complaints, American Financial Resources, Inc. dispute, American Financial Resources, Inc. disputes
American Financing Corporation Click Here American Financing Corporation complaint, American Financing Corporation complaints, American Financing Corporation dispute, American Financing Corporation disputes
American Honda Finance Corporation Click Here American Honda Finance Corporation complaint, American Honda Finance Corporation complaints, American Honda Finance Corporation dispute, American Honda Finance Corporation disputes
American Internet Mortgage, Inc Click Here American Internet Mortgage, Inc complaint, American Internet Mortgage, Inc complaints, American Internet Mortgage, Inc dispute, American Internet Mortgage, Inc disputes
American Lending Solutions, LLC Click Here American Lending Solutions, LLC complaint, American Lending Solutions, LLC complaints, American Lending Solutions, LLC dispute, American Lending Solutions, LLC disputes
American Pacific Mortgage Corporation Click Here American Pacific Mortgage Corporation complaint, American Pacific Mortgage Corporation complaints, American Pacific Mortgage Corporation dispute, American Pacific Mortgage Corporation disputes
American Southwest Mortgage Corpration Click Here American Southwest Mortgage Corpration complaint, American Southwest Mortgage Corpration complaints, American Southwest Mortgage Corpration dispute, American Southwest Mortgage Corpration disputes
Americash Click Here Americash complaint, Americash complaints, Americash dispute, Americash disputes
AmeriFirst Financial, Inc. Click Here AmeriFirst Financial, Inc. complaint, AmeriFirst Financial, Inc. complaints, AmeriFirst Financial, Inc. dispute, AmeriFirst Financial, Inc. disputes
AmeriFirst Home Mortgage Click Here AmeriFirst Home Mortgage complaint, AmeriFirst Home Mortgage complaints, AmeriFirst Home Mortgage dispute, AmeriFirst Home Mortgage disputes
Amerisave Click Here Amerisave complaint, Amerisave complaints, Amerisave dispute, Amerisave disputes
Amerivest Mortgages Click Here Amerivest Mortgages complaint, Amerivest Mortgages complaints, Amerivest Mortgages dispute, Amerivest Mortgages disputes
Amex Click Here Amex complaint, Amex complaints, Amex dispute, Amex disputes
Andesite Finance Company, LLC Click Here Andesite Finance Company, LLC complaint, Andesite Finance Company, LLC complaints, Andesite Finance Company, LLC dispute, Andesite Finance Company, LLC disputes
Apex Home Loans, Inc. Click Here Apex Home Loans, Inc. complaint, Apex Home Loans, Inc. complaints, Apex Home Loans, Inc. dispute, Apex Home Loans, Inc. disputes
Arbor Mortgage Click Here Arbor Mortgage complaint, Arbor Mortgage complaints, Arbor Mortgage dispute, Arbor Mortgage disputes
Arbor Residential Mortgage LLC Click Here Arbor Residential Mortgage LLC complaint, Arbor Residential Mortgage LLC complaints, Arbor Residential Mortgage LLC dispute, Arbor Residential Mortgage LLC disputes
Ark-La-Tex Financial Services, LLC Click Here Ark-La-Tex Financial Services, LLC complaint, Ark-La-Tex Financial Services, LLC complaints, Ark-La-Tex Financial Services, LLC dispute, Ark-La-Tex Financial Services, LLC disputes
Army and Air Force Exchange Service Click Here Army and Air Force Exchange Service complaint, Army and Air Force Exchange Service complaints, Army and Air Force Exchange Service dispute, Army and Air Force Exchange Service disputes
Arvest Bank Click Here Arvest Bank complaint, Arvest Bank complaints, Arvest Bank dispute, Arvest Bank disputes
Aspen Home Mortgage Group Click Here Aspen Home Mortgage Group complaint, Aspen Home Mortgage Group complaints, Aspen Home Mortgage Group dispute, Aspen Home Mortgage Group disputes
Assent Inc. Click Here Assent Inc. complaint, Assent Inc. complaints, Assent Inc. dispute, Assent Inc. disputes
Associated Bank Click Here Associated Bank complaint, Associated Bank complaints, Associated Bank dispute, Associated Bank disputes
Associated Mortgage Corporation Click Here Associated Mortgage Corporation complaint, Associated Mortgage Corporation complaints, Associated Mortgage Corporation dispute, Associated Mortgage Corporation disputes
Astoria Federal Click Here Astoria Federal complaint, Astoria Federal complaints, Astoria Federal dispute, Astoria Federal disputes
Atlantic Home Loans, Inc. Click Here Atlantic Home Loans, Inc. complaint, Atlantic Home Loans, Inc. complaints, Atlantic Home Loans, Inc. dispute, Atlantic Home Loans, Inc. disputes
Atlantic Mortgage Direct LLC Click Here Atlantic Mortgage Direct LLC complaint, Atlantic Mortgage Direct LLC complaints, Atlantic Mortgage Direct LLC dispute, Atlantic Mortgage Direct LLC disputes
Atlantis National Services, Inc. Click Here Atlantis National Services, Inc. complaint, Atlantis National Services, Inc. complaints, Atlantis National Services, Inc. dispute, Atlantis National Services, Inc. disputes
Aurora Financial Group Inc. Click Here Aurora Financial Group Inc. complaint, Aurora Financial Group Inc. complaints, Aurora Financial Group Inc. dispute, Aurora Financial Group Inc. disputes
Avante Click Here Avante complaint, Avante complaints, Avante dispute, Avante disputes
Axia Financial, LLC Click Here Axia Financial, LLC complaint, Axia Financial, LLC complaints, Axia Financial, LLC dispute, Axia Financial, LLC disputes
Banco Popular de Puerto Rico Click Here Banco Popular de Puerto Rico complaint, Banco Popular de Puerto Rico complaints, Banco Popular de Puerto Rico dispute, Banco Popular de Puerto Rico disputes
Banco Popular North America Click Here Banco Popular North America complaint, Banco Popular North America complaints, Banco Popular North America dispute, Banco Popular North America disputes
Banco Santander Puerto Rico Click Here Banco Santander Puerto Rico complaint, Banco Santander Puerto Rico complaints, Banco Santander Puerto Rico dispute, Banco Santander Puerto Rico disputes
BancorpSouth Bank Click Here BancorpSouth Bank complaint, BancorpSouth Bank complaints, BancorpSouth Bank dispute, BancorpSouth Bank disputes
Bank of America Click Here Bank of America complaint, Bank of America complaints, Bank of America dispute, Bank of America disputes
Bank of China USA Click Here Bank of China USA complaint, Bank of China USA complaints, Bank of China USA dispute, Bank of China USA disputes
Bank of Hawaii Click Here Bank of Hawaii complaint, Bank of Hawaii complaints, Bank of Hawaii dispute, Bank of Hawaii disputes
Bank of the West Click Here Bank of the West complaint, Bank of the West complaints, Bank of the West dispute, Bank of the West disputes
BankUnited Click Here BankUnited complaint, BankUnited complaints, BankUnited dispute, BankUnited disputes
Barclays Click Here Barclays complaint, Barclays complaints, Barclays dispute, Barclays disputes
Bay Equity Click Here Bay Equity complaint, Bay Equity complaints, Bay Equity dispute, Bay Equity disputes
Bay Valley Mortgage Group Click Here Bay Valley Mortgage Group complaint, Bay Valley Mortgage Group complaints, Bay Valley Mortgage Group dispute, Bay Valley Mortgage Group disputes
Bayview Loan Servicing, LLC Click Here Bayview Loan Servicing, LLC complaint, Bayview Loan Servicing, LLC complaints, Bayview Loan Servicing, LLC dispute, Bayview Loan Servicing, LLC disputes
BB&T Financial Click Here BB&T Financial complaint, BB&T Financial complaints, BB&T Financial dispute, BB&T Financial disputes
BBVA Compass Click Here BBVA Compass complaint, BBVA Compass complaints, BBVA Compass dispute, BBVA Compass disputes
BBVA Puerto Rico Click Here BBVA Puerto Rico complaint, BBVA Puerto Rico complaints, BBVA Puerto Rico dispute, BBVA Puerto Rico disputes
Bill Henson Co, Inc. Click Here Bill Henson Co, Inc. complaint, Bill Henson Co, Inc. complaints, Bill Henson Co, Inc. dispute, Bill Henson Co, Inc. disputes
BluFi Lending Click Here BluFi Lending complaint, BluFi Lending complaints, BluFi Lending dispute, BluFi Lending disputes
BMO Harris Click Here BMO Harris complaint, BMO Harris complaints, BMO Harris dispute, BMO Harris disputes
BMW Financial Services Click Here BMW Financial Services complaint, BMW Financial Services complaints, BMW Financial Services dispute, BMW Financial Services disputes
BNY Mellon Click Here BNY Mellon complaint, BNY Mellon complaints, BNY Mellon dispute, BNY Mellon disputes
Bogman, Inc Click Here Bogman, Inc complaint, Bogman, Inc complaints, Bogman, Inc dispute, Bogman, Inc disputes
BOK Financial Corp Click Here BOK Financial Corp complaint, BOK Financial Corp complaints, BOK Financial Corp dispute, BOK Financial Corp disputes
Bond Corporation Click Here Bond Corporation complaint, Bond Corporation complaints, Bond Corporation dispute, Bond Corporation disputes
Boulder Lending Group Click Here Boulder Lending Group complaint, Boulder Lending Group complaints, Boulder Lending Group dispute, Boulder Lending Group disputes
Brady Distributing Company Click Here Brady Distributing Company complaint, Brady Distributing Company complaints, Brady Distributing Company dispute, Brady Distributing Company disputes
Brandywine Professional Services Click Here Brandywine Professional Services complaint, Brandywine Professional Services complaints, Brandywine Professional Services dispute, Brandywine Professional Services disputes
Brazos Higher Education Servicing Click Here Brazos Higher Education Servicing complaint, Brazos Higher Education Servicing complaints, Brazos Higher Education Servicing dispute, Brazos Higher Education Servicing disputes
Brazos Loan Servicing Click Here Brazos Loan Servicing complaint, Brazos Loan Servicing complaints, Brazos Loan Servicing dispute, Brazos Loan Servicing disputes
Bridgelock Capital Click Here Bridgelock Capital complaint, Bridgelock Capital complaints, Bridgelock Capital dispute, Bridgelock Capital disputes
Budget Mortgage Corp. Click Here Budget Mortgage Corp. complaint, Budget Mortgage Corp. complaints, Budget Mortgage Corp. dispute, Budget Mortgage Corp. disputes
Business Starters, Inc Click Here Business Starters, Inc complaint, Business Starters, Inc complaints, Business Starters, Inc dispute, Business Starters, Inc disputes
Byrider Franchising, LLC Click Here Byrider Franchising, LLC complaint, Byrider Franchising, LLC complaints, Byrider Franchising, LLC dispute, Byrider Franchising, LLC disputes
C & A Mortgage Services of Florence, Inc. Click Here C & A Mortgage Services of Florence, Inc. complaint, C & A Mortgage Services of Florence, Inc. complaints, C & A Mortgage Services of Florence, Inc. dispute, C & A Mortgage Services of Florence, Inc. disputes
Caliber Funding LLC Click Here Caliber Funding LLC complaint, Caliber Funding LLC complaints, Caliber Funding LLC dispute, Caliber Funding LLC disputes
Caliber Home Loans, Inc Click Here Caliber Home Loans, Inc complaint, Caliber Home Loans, Inc complaints, Caliber Home Loans, Inc dispute, Caliber Home Loans, Inc disputes
California Bank & Trust Click Here California Bank & Trust complaint, California Bank & Trust complaints, California Bank & Trust dispute, California Bank & Trust disputes
Capital Benefit, Inc. Click Here Capital Benefit, Inc. complaint, Capital Benefit, Inc. complaints, Capital Benefit, Inc. dispute, Capital Benefit, Inc. disputes
Capital One Click Here Capital One complaint, Capital One complaints, Capital One dispute, Capital One disputes
Carbucks of Delaware, Inc Click Here Carbucks of Delaware, Inc complaint, Carbucks of Delaware, Inc complaints, Carbucks of Delaware, Inc dispute, Carbucks of Delaware, Inc disputes
Carrington Mortgage Click Here Carrington Mortgage complaint, Carrington Mortgage complaints, Carrington Mortgage dispute, Carrington Mortgage disputes
Cascade Mortgage, Inc. Click Here Cascade Mortgage, Inc. complaint, Cascade Mortgage, Inc. complaints, Cascade Mortgage, Inc. dispute, Cascade Mortgage, Inc. disputes
Cash Call Click Here Cash Call complaint, Cash Call complaints, Cash Call dispute, Cash Call disputes
Castle & Cooke Mortgage Click Here Castle & Cooke Mortgage complaint, Castle & Cooke Mortgage complaints, Castle & Cooke Mortgage dispute, Castle & Cooke Mortgage disputes
Cathay Bank Click Here Cathay Bank complaint, Cathay Bank complaints, Cathay Bank dispute, Cathay Bank disputes
Century Financial Group Click Here Century Financial Group complaint, Century Financial Group complaints, Century Financial Group dispute, Century Financial Group disputes
CF Funding Click Here CF Funding complaint, CF Funding complaints, CF Funding dispute, CF Funding disputes
CFAM Financial Services, LLC Click Here CFAM Financial Services, LLC complaint, CFAM Financial Services, LLC complaints, CFAM Financial Services, LLC dispute, CFAM Financial Services, LLC disputes
CFG Financial Solutions Inc. Click Here CFG Financial Solutions Inc. complaint, CFG Financial Solutions Inc. complaints, CFG Financial Solutions Inc. dispute, CFG Financial Solutions Inc. disputes
CGB Agri Financial Services Click Here CGB Agri Financial Services complaint, CGB Agri Financial Services complaints, CGB Agri Financial Services dispute, CGB Agri Financial Services disputes
Charles Schwab Bank Click Here Charles Schwab Bank complaint, Charles Schwab Bank complaints, Charles Schwab Bank dispute, Charles Schwab Bank disputes
Charlottesville Settlement Company Click Here Charlottesville Settlement Company complaint, Charlottesville Settlement Company complaints, Charlottesville Settlement Company dispute, Charlottesville Settlement Company disputes
Cherry Creek Mortgage Click Here Cherry Creek Mortgage complaint, Cherry Creek Mortgage complaints, Cherry Creek Mortgage dispute, Cherry Creek Mortgage disputes
Churchill Mortgage Corporation Click Here Churchill Mortgage Corporation complaint, Churchill Mortgage Corporation complaints, Churchill Mortgage Corporation dispute, Churchill Mortgage Corporation disputes
Cimmaron Escrow Inc. Click Here Cimmaron Escrow Inc. complaint, Cimmaron Escrow Inc. complaints, Cimmaron Escrow Inc. dispute, Cimmaron Escrow Inc. disputes
CIS Direct Lending Click Here CIS Direct Lending complaint, CIS Direct Lending complaints, CIS Direct Lending dispute, CIS Direct Lending disputes
Citibank Click Here Citibank complaint, Citibank complaints, Citibank dispute, Citibank disputes
Citizens Savings & Loan Corporation Click Here Citizens Savings & Loan Corporation complaint, Citizens Savings & Loan Corporation complaints, Citizens Savings & Loan Corporation dispute, Citizens Savings & Loan Corporation disputes
City National Bank Click Here City National Bank complaint, City National Bank complaints, City National Bank dispute, City National Bank disputes
Citywide Mortgage Associates, Inc. Click Here Citywide Mortgage Associates, Inc. complaint, Citywide Mortgage Associates, Inc. complaints, Citywide Mortgage Associates, Inc. dispute, Citywide Mortgage Associates, Inc. disputes
Cleveland Home Title Agency Click Here Cleveland Home Title Agency complaint, Cleveland Home Title Agency complaints, Cleveland Home Title Agency dispute, Cleveland Home Title Agency disputes
Clifton Mortgage Services, LLC Click Here Clifton Mortgage Services, LLC complaint, Clifton Mortgage Services, LLC complaints, Clifton Mortgage Services, LLC dispute, Clifton Mortgage Services, LLC disputes
CMG Financial Click Here CMG Financial complaint, CMG Financial complaints, CMG Financial dispute, CMG Financial disputes
Coast Professional, Inc. Click Here Coast Professional, Inc. complaint, Coast Professional, Inc. complaints, Coast Professional, Inc. dispute, Coast Professional, Inc. disputes
Coastal Finance Company, Inc. Click Here Coastal Finance Company, Inc. complaint, Coastal Finance Company, Inc. complaints, Coastal Finance Company, Inc. dispute, Coastal Finance Company, Inc. disputes
Coastal States Mortgage Click Here Coastal States Mortgage complaint, Coastal States Mortgage complaints, Coastal States Mortgage dispute, Coastal States Mortgage disputes
Cobalt Mortgage Click Here Cobalt Mortgage complaint, Cobalt Mortgage complaints, Cobalt Mortgage dispute, Cobalt Mortgage disputes
College Loan Corporation Click Here College Loan Corporation complaint, College Loan Corporation complaints, College Loan Corporation dispute, College Loan Corporation disputes
Colonial Mortgage Service Co. Of America Click Here Colonial Mortgage Service Co. Of America complaint, Colonial Mortgage Service Co. Of America complaints, Colonial Mortgage Service Co. Of America dispute, Colonial Mortgage Service Co. Of America disputes
Colorado Housing and Finance Authority Click Here Colorado Housing and Finance Authority complaint, Colorado Housing and Finance Authority complaints, Colorado Housing and Finance Authority dispute, Colorado Housing and Finance Authority disputes
Comerica Click Here Comerica complaint, Comerica complaints, Comerica dispute, Comerica disputes
Commerce Bank Click Here Commerce Bank complaint, Commerce Bank complaints, Commerce Bank dispute, Commerce Bank disputes
Common Fund Mortgage Click Here Common Fund Mortgage complaint, Common Fund Mortgage complaints, Common Fund Mortgage dispute, Common Fund Mortgage disputes
Community Home Lending Click Here Community Home Lending complaint, Community Home Lending complaints, Community Home Lending dispute, Community Home Lending disputes
ConServe Click Here ConServe complaint, ConServe complaints, ConServe dispute, ConServe disputes
Consumer Education Services, Inc. Click Here Consumer Education Services, Inc. complaint, Consumer Education Services, Inc. complaints, Consumer Education Services, Inc. dispute, Consumer Education Services, Inc. disputes
Consumer Financial Services Click Here Consumer Financial Services complaint, Consumer Financial Services complaints, Consumer Financial Services dispute, Consumer Financial Services disputes
Consumer Portfolio Services Click Here Consumer Portfolio Services complaint, Consumer Portfolio Services complaints, Consumer Portfolio Services dispute, Consumer Portfolio Services disputes
Consumer Protection Assistance Coalition, Inc Click Here Consumer Protection Assistance Coalition, Inc complaint, Consumer Protection Assistance Coalition, Inc complaints, Consumer Protection Assistance Coalition, Inc dispute, Consumer Protection Assistance Coalition, Inc disputes
Consumer Real Estate Finance Co. Click Here Consumer Real Estate Finance Co. complaint, Consumer Real Estate Finance Co. complaints, Consumer Real Estate Finance Co. dispute, Consumer Real Estate Finance Co. disputes
Continental Home Loans Inc. Click Here Continental Home Loans Inc. complaint, Continental Home Loans Inc. complaints, Continental Home Loans Inc. dispute, Continental Home Loans Inc. disputes
Convergent Outsourcing Click Here Convergent Outsourcing complaint, Convergent Outsourcing complaints, Convergent Outsourcing dispute, Convergent Outsourcing disputes
CoreScore Report by CoreLogic Credco Click Here CoreScore Report by CoreLogic Credco complaint, CoreScore Report by CoreLogic Credco complaints, CoreScore Report by CoreLogic Credco dispute, CoreScore Report by CoreLogic Credco disputes
Cornerstone Home Lending Inc. Click Here Cornerstone Home Lending Inc. complaint, Cornerstone Home Lending Inc. complaints, Cornerstone Home Lending Inc. dispute, Cornerstone Home Lending Inc. disputes
Cornerstone Mortgage, Inc. Click Here Cornerstone Mortgage, Inc. complaint, Cornerstone Mortgage, Inc. complaints, Cornerstone Mortgage, Inc. dispute, Cornerstone Mortgage, Inc. disputes
CountryPlace Acceptance Corporation Click Here CountryPlace Acceptance Corporation complaint, CountryPlace Acceptance Corporation complaints, CountryPlace Acceptance Corporation dispute, CountryPlace Acceptance Corporation disputes
Credit Acceptance Corporation Click Here Credit Acceptance Corporation complaint, Credit Acceptance Corporation complaints, Credit Acceptance Corporation dispute, Credit Acceptance Corporation disputes
Credit Technology, Inc. Click Here Credit Technology, Inc. complaint, Credit Technology, Inc. complaints, Credit Technology, Inc. dispute, Credit Technology, Inc. disputes
Credit Union Mortgage Association Click Here Credit Union Mortgage Association complaint, Credit Union Mortgage Association complaints, Credit Union Mortgage Association dispute, Credit Union Mortgage Association disputes
CRL Home Loans Click Here CRL Home Loans complaint, CRL Home Loans complaints, CRL Home Loans dispute, CRL Home Loans disputes
CrossCountry Mortgage Inc. Click Here CrossCountry Mortgage Inc. complaint, CrossCountry Mortgage Inc. complaints, CrossCountry Mortgage Inc. dispute, CrossCountry Mortgage Inc. disputes
Daiyaan, Inc Click Here Daiyaan, Inc complaint, Daiyaan, Inc complaints, Daiyaan, Inc dispute, Daiyaan, Inc disputes
DAS Acquisition Company, LLC Click Here DAS Acquisition Company, LLC complaint, DAS Acquisition Company, LLC complaints, DAS Acquisition Company, LLC dispute, DAS Acquisition Company, LLC disputes
Data Mortgage Inc. Click Here Data Mortgage Inc. complaint, Data Mortgage Inc. complaints, Data Mortgage Inc. dispute, Data Mortgage Inc. disputes
Deutsche Bank Click Here Deutsche Bank complaint, Deutsche Bank complaints, Deutsche Bank dispute, Deutsche Bank disputes
Deval LLC Click Here Deval LLC complaint, Deval LLC complaints, Deval LLC dispute, Deval LLC disputes
DeWitt Mortgage Services and Property Management, LLC Click Here DeWitt Mortgage Services and Property Management, LLC complaint, DeWitt Mortgage Services and Property Management, LLC complaints, DeWitt Mortgage Services and Property Management, LLC dispute, DeWitt Mortgage Services and Property Management, LLC disputes
DHI Mortgage Click Here DHI Mortgage complaint, DHI Mortgage complaints, DHI Mortgage dispute, DHI Mortgage disputes
Direct Lenders, LLC Click Here Direct Lenders, LLC complaint, Direct Lenders, LLC complaints, Direct Lenders, LLC dispute, Direct Lenders, LLC disputes
Direct Mortgage Loans, LLC Click Here Direct Mortgage Loans, LLC complaint, Direct Mortgage Loans, LLC complaints, Direct Mortgage Loans, LLC dispute, Direct Mortgage Loans, LLC disputes
Doral Capital Corporation Click Here Doral Capital Corporation complaint, Doral Capital Corporation complaints, Doral Capital Corporation dispute, Doral Capital Corporation disputes
Dovenmuehle Mortgage Inc. Click Here Dovenmuehle Mortgage Inc. complaint, Dovenmuehle Mortgage Inc. complaints, Dovenmuehle Mortgage Inc. dispute, Dovenmuehle Mortgage Inc. disputes
DriveTime Click Here DriveTime complaint, DriveTime complaints, DriveTime dispute, DriveTime disputes
E*Trade Bank Click Here E*Trade Bank complaint, E*Trade Bank complaints, E*Trade Bank dispute, E*Trade Bank disputes
East West Bank Click Here East West Bank complaint, East West Bank complaints, East West Bank dispute, East West Bank disputes
Edfinancial Services Click Here Edfinancial Services complaint, Edfinancial Services complaints, Edfinancial Services dispute, Edfinancial Services disputes
Embrace Home Loans Inc Click Here Embrace Home Loans Inc complaint, Embrace Home Loans Inc complaints, Embrace Home Loans Inc dispute, Embrace Home Loans Inc disputes
Empire Home Mortgage, Inc Click Here Empire Home Mortgage, Inc complaint, Empire Home Mortgage, Inc complaints, Empire Home Mortgage, Inc dispute, Empire Home Mortgage, Inc disputes
Enter Mortgage Inc Click Here Enter Mortgage Inc complaint, Enter Mortgage Inc complaints, Enter Mortgage Inc dispute, Enter Mortgage Inc disputes
Envoy Mortgage Ltd. Click Here Envoy Mortgage Ltd. complaint, Envoy Mortgage Ltd. complaints, Envoy Mortgage Ltd. dispute, Envoy Mortgage Ltd. disputes
Equidata, Inc. Click Here Equidata, Inc. complaint, Equidata, Inc. complaints, Equidata, Inc. dispute, Equidata, Inc. disputes
Equifax Click Here Equifax complaint, Equifax complaints, Equifax dispute, Equifax disputes
EverBank Click Here EverBank complaint, EverBank complaints, EverBank dispute, EverBank disputes
Evesham Mortgage, LLC Click Here Evesham Mortgage, LLC complaint, Evesham Mortgage, LLC complaints, Evesham Mortgage, LLC dispute, Evesham Mortgage, LLC disputes
Executive Lending Group, LLC Click Here Executive Lending Group, LLC complaint, Executive Lending Group, LLC complaints, Executive Lending Group, LLC dispute, Executive Lending Group, LLC disputes
Exeter Finance Corp Click Here Exeter Finance Corp complaint, Exeter Finance Corp complaints, Exeter Finance Corp dispute, Exeter Finance Corp disputes
Experian Click Here Experian complaint, Experian complaints, Experian dispute, Experian disputes
Expert Global Solutions, Inc. Click Here Expert Global Solutions, Inc. complaint, Expert Global Solutions, Inc. complaints, Expert Global Solutions, Inc. dispute, Expert Global Solutions, Inc. disputes
Express Aviation Click Here Express Aviation complaint, Express Aviation complaints, Express Aviation dispute, Express Aviation disputes
Fairway Consumer Discount Company Click Here Fairway Consumer Discount Company complaint, Fairway Consumer Discount Company complaints, Fairway Consumer Discount Company dispute, Fairway Consumer Discount Company disputes
Fay Servicing, LLC Click Here Fay Servicing, LLC complaint, Fay Servicing, LLC complaints, Fay Servicing, LLC dispute, Fay Servicing, LLC disputes
FCI Lender Services Inc. Click Here FCI Lender Services Inc. complaint, FCI Lender Services Inc. complaints, FCI Lender Services Inc. dispute, FCI Lender Services Inc. disputes
Fidelity National Financial, Inc Click Here Fidelity National Financial, Inc complaint, Fidelity National Financial, Inc complaints, Fidelity National Financial, Inc dispute, Fidelity National Financial, Inc disputes
Fifth Third Bank Click Here Fifth Third Bank complaint, Fifth Third Bank complaints, Fifth Third Bank dispute, Fifth Third Bank disputes
Financial Freedom Mortgage Inc Click Here Financial Freedom Mortgage Inc complaint, Financial Freedom Mortgage Inc complaints, Financial Freedom Mortgage Inc dispute, Financial Freedom Mortgage Inc disputes
Fink & McGregor Mortgage, LC Click Here Fink & McGregor Mortgage, LC complaint, Fink & McGregor Mortgage, LC complaints, Fink & McGregor Mortgage, LC dispute, Fink & McGregor Mortgage, LC disputes
First Advantage Corporation Click Here First Advantage Corporation complaint, First Advantage Corporation complaints, First Advantage Corporation dispute, First Advantage Corporation disputes
First American Mitigators, PLLC. Click Here First American Mitigators, PLLC. complaint, First American Mitigators, PLLC. complaints, First American Mitigators, PLLC. dispute, First American Mitigators, PLLC. disputes
First Associates Loan Servicing LLC Click Here First Associates Loan Servicing LLC complaint, First Associates Loan Servicing LLC complaints, First Associates Loan Servicing LLC dispute, First Associates Loan Servicing LLC disputes
First California Mortgage Co Click Here First California Mortgage Co complaint, First California Mortgage Co complaints, First California Mortgage Co dispute, First California Mortgage Co disputes
First Centennial Mortgage Corporation Click Here First Centennial Mortgage Corporation complaint, First Centennial Mortgage Corporation complaints, First Centennial Mortgage Corporation dispute, First Centennial Mortgage Corporation disputes
First Choice Loan Services, Inc. Click Here First Choice Loan Services, Inc. complaint, First Choice Loan Services, Inc. complaints, First Choice Loan Services, Inc. dispute, First Choice Loan Services, Inc. disputes
First Citizens Click Here First Citizens complaint, First Citizens complaints, First Citizens dispute, First Citizens disputes
First Colony Mortgage Click Here First Colony Mortgage complaint, First Colony Mortgage complaints, First Colony Mortgage dispute, First Colony Mortgage disputes
First County Mortgage, LLC Click Here First County Mortgage, LLC complaint, First County Mortgage, LLC complaints, First County Mortgage, LLC dispute, First County Mortgage, LLC disputes
First Data Corporation Click Here First Data Corporation complaint, First Data Corporation complaints, First Data Corporation dispute, First Data Corporation disputes
First Financial Services, Inc. Click Here First Financial Services, Inc. complaint, First Financial Services, Inc. complaints, First Financial Services, Inc. dispute, First Financial Services, Inc. disputes
First Guaranty Mortgage Corporation Click Here First Guaranty Mortgage Corporation complaint, First Guaranty Mortgage Corporation complaints, First Guaranty Mortgage Corporation dispute, First Guaranty Mortgage Corporation disputes
First Hawaiian Bank Click Here First Hawaiian Bank complaint, First Hawaiian Bank complaints, First Hawaiian Bank dispute, First Hawaiian Bank disputes
First Home Mortgage Corp Click Here First Home Mortgage Corp complaint, First Home Mortgage Corp complaints, First Home Mortgage Corp dispute, First Home Mortgage Corp disputes
First Marblehead Education Resources Click Here First Marblehead Education Resources complaint, First Marblehead Education Resources complaints, First Marblehead Education Resources dispute, First Marblehead Education Resources disputes
First Midwest Financial Click Here First Midwest Financial complaint, First Midwest Financial complaints, First Midwest Financial dispute, First Midwest Financial disputes
First Mortgage Company, LLC Click Here First Mortgage Company, LLC complaint, First Mortgage Company, LLC complaints, First Mortgage Company, LLC dispute, First Mortgage Company, LLC disputes
First Mortgage Corporation Click Here First Mortgage Corporation complaint, First Mortgage Corporation complaints, First Mortgage Corporation dispute, First Mortgage Corporation disputes
First Mortgage Solutions Click Here First Mortgage Solutions complaint, First Mortgage Solutions complaints, First Mortgage Solutions dispute, First Mortgage Solutions disputes
First National Bank of Omaha Click Here First National Bank of Omaha complaint, First National Bank of Omaha complaints, First National Bank of Omaha dispute, First National Bank of Omaha disputes
First Niagara Bank Click Here First Niagara Bank complaint, First Niagara Bank complaints, First Niagara Bank dispute, First Niagara Bank disputes
First Republic Bank Click Here First Republic Bank complaint, First Republic Bank complaints, First Republic Bank dispute, First Republic Bank disputes
First Southwestern Financial Services, LLC Click Here First Southwestern Financial Services, LLC complaint, First Southwestern Financial Services, LLC complaints, First Southwestern Financial Services, LLC dispute, First Southwestern Financial Services, LLC disputes
First Tennessee Bank Click Here First Tennessee Bank complaint, First Tennessee Bank complaints, First Tennessee Bank dispute, First Tennessee Bank disputes
First Wholesale Lending, Inc Click Here First Wholesale Lending, Inc complaint, First Wholesale Lending, Inc complaints, First Wholesale Lending, Inc dispute, First Wholesale Lending, Inc disputes
FirstBank Click Here FirstBank complaint, FirstBank complaints, FirstBank dispute, FirstBank disputes
FirstBank of Puerto Rico Click Here FirstBank of Puerto Rico complaint, FirstBank of Puerto Rico complaints, FirstBank of Puerto Rico dispute, FirstBank of Puerto Rico disputes
FirstMerit Bank Click Here FirstMerit Bank complaint, FirstMerit Bank complaints, FirstMerit Bank dispute, FirstMerit Bank disputes
FirsTrust Mortgage, Inc. Click Here FirsTrust Mortgage, Inc. complaint, FirsTrust Mortgage, Inc. complaints, FirsTrust Mortgage, Inc. dispute, FirsTrust Mortgage, Inc. disputes
FIS Global Click Here FIS Global complaint, FIS Global complaints, FIS Global dispute, FIS Global disputes
Flagship Financial Group Click Here Flagship Financial Group complaint, Flagship Financial Group complaints, Flagship Financial Group dispute, Flagship Financial Group disputes
Flagstar Bank Click Here Flagstar Bank complaint, Flagstar Bank complaints, Flagstar Bank dispute, Flagstar Bank disputes
Flat Branch Mortgage, Inc. Click Here Flat Branch Mortgage, Inc. complaint, Flat Branch Mortgage, Inc. complaints, Flat Branch Mortgage, Inc. dispute, Flat Branch Mortgage, Inc. disputes
Fleet Mortgage Corp Click Here Fleet Mortgage Corp complaint, Fleet Mortgage Corp complaints, Fleet Mortgage Corp dispute, Fleet Mortgage Corp disputes
Florida Equity Capital Click Here Florida Equity Capital complaint, Florida Equity Capital complaints, Florida Equity Capital dispute, Florida Equity Capital disputes
Ford Motor Credit Company Click Here Ford Motor Credit Company complaint, Ford Motor Credit Company complaints, Ford Motor Credit Company dispute, Ford Motor Credit Company disputes
Franklin American Mortgage Company Click Here Franklin American Mortgage Company complaint, Franklin American Mortgage Company complaints, Franklin American Mortgage Company dispute, Franklin American Mortgage Company disputes
Franklin Credit Management Click Here Franklin Credit Management complaint, Franklin Credit Management complaints, Franklin Credit Management dispute, Franklin Credit Management disputes
Franklin Mortgage Solutions, LLC Click Here Franklin Mortgage Solutions, LLC complaint, Franklin Mortgage Solutions, LLC complaints, Franklin Mortgage Solutions, LLC dispute, Franklin Mortgage Solutions, LLC disputes
Frederick J. Hanna & Associates, P.C. Click Here Frederick J. Hanna & Associates, P.C. complaint, Frederick J. Hanna & Associates, P.C. complaints, Frederick J. Hanna & Associates, P.C. dispute, Frederick J. Hanna & Associates, P.C. disputes
Freedom Mortgage Click Here Freedom Mortgage complaint, Freedom Mortgage complaints, Freedom Mortgage dispute, Freedom Mortgage disputes
Frontier Financial, Inc. Click Here Frontier Financial, Inc. complaint, Frontier Financial, Inc. complaints, Frontier Financial, Inc. dispute, Frontier Financial, Inc. disputes
Frost Bank Click Here Frost Bank complaint, Frost Bank complaints, Frost Bank dispute, Frost Bank disputes
Galin Mortgage Lending, LLC Click Here Galin Mortgage Lending, LLC complaint, Galin Mortgage Lending, LLC complaints, Galin Mortgage Lending, LLC dispute, Galin Mortgage Lending, LLC disputes
Gateway Funding Click Here Gateway Funding complaint, Gateway Funding complaints, Gateway Funding dispute, Gateway Funding disputes
Gateway Mortgage Group, LLC Click Here Gateway Mortgage Group, LLC complaint, Gateway Mortgage Group, LLC complaints, Gateway Mortgage Group, LLC dispute, Gateway Mortgage Group, LLC disputes
GC Services Limited Partnership Click Here GC Services Limited Partnership complaint, GC Services Limited Partnership complaints, GC Services Limited Partnership dispute, GC Services Limited Partnership disputes
GE Capital Retail Click Here GE Capital Retail complaint, GE Capital Retail complaints, GE Capital Retail dispute, GE Capital Retail disputes
GenEquity Mortgage, Inc Click Here GenEquity Mortgage, Inc complaint, GenEquity Mortgage, Inc complaints, GenEquity Mortgage, Inc dispute, GenEquity Mortgage, Inc disputes
General Information Services, Inc Click Here General Information Services, Inc complaint, General Information Services, Inc complaints, General Information Services, Inc dispute, General Information Services, Inc disputes
Generation Mortgage Click Here Generation Mortgage complaint, Generation Mortgage complaints, Generation Mortgage dispute, Generation Mortgage disputes
Genesis Lending Click Here Genesis Lending complaint, Genesis Lending complaints, Genesis Lending dispute, Genesis Lending disputes
Genworth Financial Click Here Genworth Financial complaint, Genworth Financial complaints, Genworth Financial dispute, Genworth Financial disputes
Georgia Student Finance Authority Click Here Georgia Student Finance Authority complaint, Georgia Student Finance Authority complaints, Georgia Student Finance Authority dispute, Georgia Student Finance Authority disputes
GM Financial Click Here GM Financial complaint, GM Financial complaints, GM Financial dispute, GM Financial disputes
GMFS LLC Click Here GMFS LLC complaint, GMFS LLC complaints, GMFS LLC dispute, GMFS LLC disputes
Goldman Sachs Bank USA Click Here Goldman Sachs Bank USA complaint, Goldman Sachs Bank USA complaints, Goldman Sachs Bank USA dispute, Goldman Sachs Bank USA disputes
Granite State Management & Resources Click Here Granite State Management & Resources complaint, Granite State Management & Resources complaints, Granite State Management & Resources dispute, Granite State Management & Resources disputes
Grassland Financial Services, LLC Click Here Grassland Financial Services, LLC complaint, Grassland Financial Services, LLC complaints, Grassland Financial Services, LLC dispute, Grassland Financial Services, LLC disputes
Great Lakes Click Here Great Lakes complaint, Great Lakes complaints, Great Lakes dispute, Great Lakes disputes
Green Tree Mortgage Company, LP Click Here Green Tree Mortgage Company, LP complaint, Green Tree Mortgage Company, LP complaints, Green Tree Mortgage Company, LP dispute, Green Tree Mortgage Company, LP disputes
Green Tree Servicing, LLC Click Here Green Tree Servicing, LLC complaint, Green Tree Servicing, LLC complaints, Green Tree Servicing, LLC dispute, Green Tree Servicing, LLC disputes
Greenlight Financial Click Here Greenlight Financial complaint, Greenlight Financial complaints, Greenlight Financial dispute, Greenlight Financial disputes
GreenPlanet Servicing, LLC Click Here GreenPlanet Servicing, LLC complaint, GreenPlanet Servicing, LLC complaints, GreenPlanet Servicing, LLC dispute, GreenPlanet Servicing, LLC disputes
Gryphon Corp Click Here Gryphon Corp complaint, Gryphon Corp complaints, Gryphon Corp dispute, Gryphon Corp disputes
GSF Mortgage Corporation Click Here GSF Mortgage Corporation complaint, GSF Mortgage Corporation complaints, GSF Mortgage Corporation dispute, GSF Mortgage Corporation disputes
GTL Investments, Inc. Click Here GTL Investments, Inc. complaint, GTL Investments, Inc. complaints, GTL Investments, Inc. dispute, GTL Investments, Inc. disputes
Guaranteed Home Mortgage Company, Inc. Click Here Guaranteed Home Mortgage Company, Inc. complaint, Guaranteed Home Mortgage Company, Inc. complaints, Guaranteed Home Mortgage Company, Inc. dispute, Guaranteed Home Mortgage Company, Inc. disputes
Guaranteed Rate Click Here Guaranteed Rate complaint, Guaranteed Rate complaints, Guaranteed Rate dispute, Guaranteed Rate disputes
Guardian Mortgage Company Click Here Guardian Mortgage Company complaint, Guardian Mortgage Company complaints, Guardian Mortgage Company dispute, Guardian Mortgage Company disputes
Guild Mortgage Click Here Guild Mortgage complaint, Guild Mortgage complaints, Guild Mortgage dispute, Guild Mortgage disputes
Habitat for Humanity Click Here Habitat for Humanity complaint, Habitat for Humanity complaints, Habitat for Humanity dispute, Habitat for Humanity disputes
Hallmark Home Mortgage, LLC Click Here Hallmark Home Mortgage, LLC complaint, Hallmark Home Mortgage, LLC complaints, Hallmark Home Mortgage, LLC dispute, Hallmark Home Mortgage, LLC disputes
Hamilton National Mortgage Company Click Here Hamilton National Mortgage Company complaint, Hamilton National Mortgage Company complaints, Hamilton National Mortgage Company dispute, Hamilton National Mortgage Company disputes
Heartland Payment Systems Click Here Heartland Payment Systems complaint, Heartland Payment Systems complaints, Heartland Payment Systems dispute, Heartland Payment Systems disputes
Higher Education Student Assistance Authority (HESAA) Click Here Higher Education Student Assistance Authority (HESAA) complaint, Higher Education Student Assistance Authority (HESAA) complaints, Higher Education Student Assistance Authority (HESAA) dispute, Higher Education Student Assistance Authority (HESAA) disputes
HireRight Solutions, Inc. Click Here HireRight Solutions, Inc. complaint, HireRight Solutions, Inc. complaints, HireRight Solutions, Inc. dispute, HireRight Solutions, Inc. disputes
Home Finance of America Inc. Click Here Home Finance of America Inc. complaint, Home Finance of America Inc. complaints, Home Finance of America Inc. dispute, Home Finance of America Inc. disputes
Home Financing Center Click Here Home Financing Center complaint, Home Financing Center complaints, Home Financing Center dispute, Home Financing Center disputes
Home Loan Center Inc f/k/a LendingTree Click Here Home Loan Center Inc f/k/a LendingTree complaint, Home Loan Center Inc f/k/a LendingTree complaints, Home Loan Center Inc f/k/a LendingTree dispute, Home Loan Center Inc f/k/a LendingTree disputes
Home Servicing LLC Click Here Home Servicing LLC complaint, Home Servicing LLC complaints, Home Servicing LLC dispute, Home Servicing LLC disputes
Hometown Equity Mortage Click Here Hometown Equity Mortage complaint, Hometown Equity Mortage complaints, Hometown Equity Mortage dispute, Hometown Equity Mortage disputes
HomeTown Lenders, LLC Click Here HomeTown Lenders, LLC complaint, HomeTown Lenders, LLC complaints, HomeTown Lenders, LLC dispute, HomeTown Lenders, LLC disputes
Hometown Mortgage Services, Inc. Click Here Hometown Mortgage Services, Inc. complaint, Hometown Mortgage Services, Inc. complaints, Hometown Mortgage Services, Inc. dispute, Hometown Mortgage Services, Inc. disputes
Hometrust Mortgage Company Click Here Hometrust Mortgage Company complaint, Hometrust Mortgage Company complaints, Hometrust Mortgage Company dispute, Hometrust Mortgage Company disputes
Honolulu HomeLoans, Inc. Click Here Honolulu HomeLoans, Inc. complaint, Honolulu HomeLoans, Inc. complaints, Honolulu HomeLoans, Inc. dispute, Honolulu HomeLoans, Inc. disputes
House of Finance Corp. Click Here House of Finance Corp. complaint, House of Finance Corp. complaints, House of Finance Corp. dispute, House of Finance Corp. disputes
HSBC Click Here HSBC complaint, HSBC complaints, HSBC dispute, HSBC disputes
Hudson City Savings Bank Click Here Hudson City Savings Bank complaint, Hudson City Savings Bank complaints, Hudson City Savings Bank dispute, Hudson City Savings Bank disputes
Hunter Financial Group Click Here Hunter Financial Group complaint, Hunter Financial Group complaints, Hunter Financial Group dispute, Hunter Financial Group disputes
Hyundai Capital America Click Here Hyundai Capital America complaint, Hyundai Capital America complaints, Hyundai Capital America dispute, Hyundai Capital America disputes
IBERIABANK Click Here IBERIABANK complaint, IBERIABANK complaints, IBERIABANK dispute, IBERIABANK disputes
IDA, Inc. Click Here IDA, Inc. complaint, IDA, Inc. complaints, IDA, Inc. dispute, IDA, Inc. disputes
Imortgage.com, Inc. Click Here Imortgage.com, Inc. complaint, Imortgage.com, Inc. complaints, Imortgage.com, Inc. dispute, Imortgage.com, Inc. disputes
Innovis Click Here Innovis complaint, Innovis complaints, Innovis dispute, Innovis disputes
Integra Holdings Inc. Click Here Integra Holdings Inc. complaint, Integra Holdings Inc. complaints, Integra Holdings Inc. dispute, Integra Holdings Inc. disputes
Integrity First Financial Click Here Integrity First Financial complaint, Integrity First Financial complaints, Integrity First Financial dispute, Integrity First Financial disputes
Integrity Home Loan Click Here Integrity Home Loan complaint, Integrity Home Loan complaints, Integrity Home Loan dispute, Integrity Home Loan disputes
Integrity Solution Services, Inc. Click Here Integrity Solution Services, Inc. complaint, Integrity Solution Services, Inc. complaints, Integrity Solution Services, Inc. dispute, Integrity Solution Services, Inc. disputes
Interbank Mortgage Company Click Here Interbank Mortgage Company complaint, Interbank Mortgage Company complaints, Interbank Mortgage Company dispute, Interbank Mortgage Company disputes
Interlinc Mortgage Services, LLC Click Here Interlinc Mortgage Services, LLC complaint, Interlinc Mortgage Services, LLC complaints, Interlinc Mortgage Services, LLC dispute, Interlinc Mortgage Services, LLC disputes
International City Mortgage, Inc. Click Here International City Mortgage, Inc. complaint, International City Mortgage, Inc. complaints, International City Mortgage, Inc. dispute, International City Mortgage, Inc. disputes
Investment Management Company, LLC Click Here Investment Management Company, LLC complaint, Investment Management Company, LLC complaints, Investment Management Company, LLC dispute, Investment Management Company, LLC disputes
Investors Bank Click Here Investors Bank complaint, Investors Bank complaints, Investors Bank dispute, Investors Bank disputes
Iowa Student Loan Click Here Iowa Student Loan complaint, Iowa Student Loan complaints, Iowa Student Loan dispute, Iowa Student Loan disputes
iServe Trust Click Here iServe Trust complaint, iServe Trust complaints, iServe Trust dispute, iServe Trust disputes
Ivan Brown Click Here Ivan Brown complaint, Ivan Brown complaints, Ivan Brown dispute, Ivan Brown disputes
J Martinez Investments LLC Click Here J Martinez Investments LLC complaint, J Martinez Investments LLC complaints, J Martinez Investments LLC dispute, J Martinez Investments LLC disputes
James B. Nutter & Company Click Here James B. Nutter & Company complaint, James B. Nutter & Company complaints, James B. Nutter & Company dispute, James B. Nutter & Company disputes
JKS Mortgage, LLC Click Here JKS Mortgage, LLC complaint, JKS Mortgage, LLC complaints, JKS Mortgage, LLC dispute, JKS Mortgage, LLC disputes
JLM R.E. Investments Click Here JLM R.E. Investments complaint, JLM R.E. Investments complaints, JLM R.E. Investments dispute, JLM R.E. Investments disputes
Jonsue, LLC Click Here Jonsue, LLC complaint, Jonsue, LLC complaints, Jonsue, LLC dispute, Jonsue, LLC disputes
JPay Inc. Click Here JPay Inc. complaint, JPay Inc. complaints, JPay Inc. dispute, JPay Inc. disputes
JPMorgan Chase Click Here JPMorgan Chase complaint, JPMorgan Chase complaints, JPMorgan Chase dispute, JPMorgan Chase disputes
K & B Capital Corp Click Here K & B Capital Corp complaint, K & B Capital Corp complaints, K & B Capital Corp dispute, K & B Capital Corp disputes
K. Hovnanian American Mortgage, L.L.C. Click Here K. Hovnanian American Mortgage, L.L.C. complaint, K. Hovnanian American Mortgage, L.L.C. complaints, K. Hovnanian American Mortgage, L.L.C. dispute, K. Hovnanian American Mortgage, L.L.C. disputes
KeyBank NA Click Here KeyBank NA complaint, KeyBank NA complaints, KeyBank NA dispute, KeyBank NA disputes
Kirkston Mortgage Lending LLC Click Here Kirkston Mortgage Lending LLC complaint, Kirkston Mortgage Lending LLC complaints, Kirkston Mortgage Lending LLC dispute, Kirkston Mortgage Lending LLC disputes
Kondaur Capital Corporation Click Here Kondaur Capital Corporation complaint, Kondaur Capital Corporation complaints, Kondaur Capital Corporation dispute, Kondaur Capital Corporation disputes
Kramer & Frank, P.C. Click Here Kramer & Frank, P.C. complaint, Kramer & Frank, P.C. complaints, Kramer & Frank, P.C. dispute, Kramer & Frank, P.C. disputes
Kwik Mortgage Corporation Click Here Kwik Mortgage Corporation complaint, Kwik Mortgage Corporation complaints, Kwik Mortgage Corporation dispute, Kwik Mortgage Corporation disputes
Ladera Lending, Inc Click Here Ladera Lending, Inc complaint, Ladera Lending, Inc complaints, Ladera Lending, Inc dispute, Ladera Lending, Inc disputes
Lakeview Mortgage Inc. Click Here Lakeview Mortgage Inc. complaint, Lakeview Mortgage Inc. complaints, Lakeview Mortgage Inc. dispute, Lakeview Mortgage Inc. disputes
Land/Home Financial Services Click Here Land/Home Financial Services complaint, Land/Home Financial Services complaints, Land/Home Financial Services dispute, Land/Home Financial Services disputes
LeaderOne Financial Corporation Click Here LeaderOne Financial Corporation complaint, LeaderOne Financial Corporation complaints, LeaderOne Financial Corporation dispute, LeaderOne Financial Corporation disputes
Lender Live Click Here Lender Live complaint, Lender Live complaints, Lender Live dispute, Lender Live disputes
Lenderfi, Inc. Click Here Lenderfi, Inc. complaint, Lenderfi, Inc. complaints, Lenderfi, Inc. dispute, Lenderfi, Inc. disputes
Lending Solutions Mortgage/ LSI Mortgage Click Here Lending Solutions Mortgage/ LSI Mortgage complaint, Lending Solutions Mortgage/ LSI Mortgage complaints, Lending Solutions Mortgage/ LSI Mortgage dispute, Lending Solutions Mortgage/ LSI Mortgage disputes
Liberty Home Equity Solutions, Inc Click Here Liberty Home Equity Solutions, Inc complaint, Liberty Home Equity Solutions, Inc complaints, Liberty Home Equity Solutions, Inc dispute, Liberty Home Equity Solutions, Inc disputes
Lincoln Mortgage Company Click Here Lincoln Mortgage Company complaint, Lincoln Mortgage Company complaints, Lincoln Mortgage Company dispute, Lincoln Mortgage Company disputes
Live Well Financial, Inc. Click Here Live Well Financial, Inc. complaint, Live Well Financial, Inc. complaints, Live Well Financial, Inc. dispute, Live Well Financial, Inc. disputes
Loan Care Click Here Loan Care complaint, Loan Care complaints, Loan Care dispute, Loan Care disputes
Loan Servicing Group Click Here Loan Servicing Group complaint, Loan Servicing Group complaints, Loan Servicing Group dispute, Loan Servicing Group disputes
Loan To Learn Click Here Loan To Learn complaint, Loan To Learn complaints, Loan To Learn dispute, Loan To Learn disputes
LoanDepot Click Here LoanDepot complaint, LoanDepot complaints, LoanDepot dispute, LoanDepot disputes
Lobel Financial Corporation Click Here Lobel Financial Corporation complaint, Lobel Financial Corporation complaints, Lobel Financial Corporation dispute, Lobel Financial Corporation disputes
Lynx Asset Services, LLC Click Here Lynx Asset Services, LLC complaint, Lynx Asset Services, LLC complaints, Lynx Asset Services, LLC dispute, Lynx Asset Services, LLC disputes
Lyons Mortgage Services, Inc Click Here Lyons Mortgage Services, Inc complaint, Lyons Mortgage Services, Inc complaints, Lyons Mortgage Services, Inc dispute, Lyons Mortgage Services, Inc disputes
M&T Bank Click Here M&T Bank complaint, M&T Bank complaints, M&T Bank dispute, M&T Bank disputes
Maine Educational Loan Authority (MELA) Click Here Maine Educational Loan Authority (MELA) complaint, Maine Educational Loan Authority (MELA) complaints, Maine Educational Loan Authority (MELA) dispute, Maine Educational Loan Authority (MELA) disputes
Market Place Mortgage Corp. Click Here Market Place Mortgage Corp. complaint, Market Place Mortgage Corp. complaints, Market Place Mortgage Corp. dispute, Market Place Mortgage Corp. disputes
Marsh Associates, Inc. Click Here Marsh Associates, Inc. complaint, Marsh Associates, Inc. complaints, Marsh Associates, Inc. dispute, Marsh Associates, Inc. disputes
MAS Associates, LLC Click Here MAS Associates, LLC complaint, MAS Associates, LLC complaints, MAS Associates, LLC dispute, MAS Associates, LLC disputes
McGlone Mortgage Company Click Here McGlone Mortgage Company complaint, McGlone Mortgage Company complaints, McGlone Mortgage Company dispute, McGlone Mortgage Company disputes
Medallion Mortgage Company LLC Click Here Medallion Mortgage Company LLC complaint, Medallion Mortgage Company LLC complaints, Medallion Mortgage Company LLC dispute, Medallion Mortgage Company LLC disputes
MEFA Click Here MEFA complaint, MEFA complaints, MEFA dispute, MEFA disputes
Megastar Financial Corp. Click Here Megastar Financial Corp. complaint, Megastar Financial Corp. complaints, Megastar Financial Corp. dispute, Megastar Financial Corp. disputes
Member Mortgage Services Click Here Member Mortgage Services complaint, Member Mortgage Services complaints, Member Mortgage Services dispute, Member Mortgage Services disputes
Mercedes-Benz Financial Services Click Here Mercedes-Benz Financial Services complaint, Mercedes-Benz Financial Services complaints, Mercedes-Benz Financial Services dispute, Mercedes-Benz Financial Services disputes
Mesce Associates, Inc. Click Here Mesce Associates, Inc. complaint, Mesce Associates, Inc. complaints, Mesce Associates, Inc. dispute, Mesce Associates, Inc. disputes
MetLife Bank Click Here MetLife Bank complaint, MetLife Bank complaints, MetLife Bank dispute, MetLife Bank disputes
Metro Capital Mortgage Corporation Click Here Metro Capital Mortgage Corporation complaint, Metro Capital Mortgage Corporation complaints, Metro Capital Mortgage Corporation dispute, Metro Capital Mortgage Corporation disputes
Metropolitan Home Mortgage, Inc. Click Here Metropolitan Home Mortgage, Inc. complaint, Metropolitan Home Mortgage, Inc. complaints, Metropolitan Home Mortgage, Inc. dispute, Metropolitan Home Mortgage, Inc. disputes
MicroBilt / PRBC (formerly CL Verify) Click Here MicroBilt / PRBC (formerly CL Verify) complaint, MicroBilt / PRBC (formerly CL Verify) complaints, MicroBilt / PRBC (formerly CL Verify) dispute, MicroBilt / PRBC (formerly CL Verify) disputes
Mid Valley Financial Click Here Mid Valley Financial complaint, Mid Valley Financial complaints, Mid Valley Financial dispute, Mid Valley Financial disputes
MidAmerica Mortgage Inc Click Here MidAmerica Mortgage Inc complaint, MidAmerica Mortgage Inc complaints, MidAmerica Mortgage Inc dispute, MidAmerica Mortgage Inc disputes
MID-ISLAND MORTGAGE CORP Click Here MID-ISLAND MORTGAGE CORP complaint, MID-ISLAND MORTGAGE CORP complaints, MID-ISLAND MORTGAGE CORP dispute, MID-ISLAND MORTGAGE CORP disputes
Midwest Loan Services, Inc. Click Here Midwest Loan Services, Inc. complaint, Midwest Loan Services, Inc. complaints, Midwest Loan Services, Inc. dispute, Midwest Loan Services, Inc. disputes
Midwest Mortgage Investments LTD Click Here Midwest Mortgage Investments LTD complaint, Midwest Mortgage Investments LTD complaints, Midwest Mortgage Investments LTD dispute, Midwest Mortgage Investments LTD disputes
Millenium Home Mortgage Click Here Millenium Home Mortgage complaint, Millenium Home Mortgage complaints, Millenium Home Mortgage dispute, Millenium Home Mortgage disputes
MLD Mortgage, Inc. Click Here MLD Mortgage, Inc. complaint, MLD Mortgage, Inc. complaints, MLD Mortgage, Inc. dispute, MLD Mortgage, Inc. disputes
Model Finance Company Click Here Model Finance Company complaint, Model Finance Company complaints, Model Finance Company dispute, Model Finance Company disputes
MOHELA Click Here MOHELA complaint, MOHELA complaints, MOHELA dispute, MOHELA disputes
Moneydart Global Services Inc. Click Here Moneydart Global Services Inc. complaint, Moneydart Global Services Inc. complaints, Moneydart Global Services Inc. dispute, Moneydart Global Services Inc. disputes
MoneyGram Click Here MoneyGram complaint, MoneyGram complaints, MoneyGram dispute, MoneyGram disputes
Morgan Stanley Click Here Morgan Stanley complaint, Morgan Stanley complaints, Morgan Stanley dispute, Morgan Stanley disputes
Moritz Partners L.P. Click Here Moritz Partners L.P. complaint, Moritz Partners L.P. complaints, Moritz Partners L.P. dispute, Moritz Partners L.P. disputes
Morris, Hardwick, Schneider, LLC Click Here Morris, Hardwick, Schneider, LLC complaint, Morris, Hardwick, Schneider, LLC complaints, Morris, Hardwick, Schneider, LLC dispute, Morris, Hardwick, Schneider, LLC disputes
Mortgage America, Inc. Click Here Mortgage America, Inc. complaint, Mortgage America, Inc. complaints, Mortgage America, Inc. dispute, Mortgage America, Inc. disputes
Mortgage Capital Associates, Inc. Click Here Mortgage Capital Associates, Inc. complaint, Mortgage Capital Associates, Inc. complaints, Mortgage Capital Associates, Inc. dispute, Mortgage Capital Associates, Inc. disputes
Mortgage Center, L. C. Click Here Mortgage Center, L. C. complaint, Mortgage Center, L. C. complaints, Mortgage Center, L. C. dispute, Mortgage Center, L. C. disputes
Mortgage Counseling Center Click Here Mortgage Counseling Center complaint, Mortgage Counseling Center complaints, Mortgage Counseling Center dispute, Mortgage Counseling Center disputes
Mortgage Investors Corporation Click Here Mortgage Investors Corporation complaint, Mortgage Investors Corporation complaints, Mortgage Investors Corporation dispute, Mortgage Investors Corporation disputes
Mortgage Lenders of America, LLC Click Here Mortgage Lenders of America, LLC complaint, Mortgage Lenders of America, LLC complaints, Mortgage Lenders of America, LLC dispute, Mortgage Lenders of America, LLC disputes
Mortgage Master Inc Click Here Mortgage Master Inc complaint, Mortgage Master Inc complaints, Mortgage Master Inc dispute, Mortgage Master Inc disputes
Mortgage Master Service Corp Click Here Mortgage Master Service Corp complaint, Mortgage Master Service Corp complaints, Mortgage Master Service Corp dispute, Mortgage Master Service Corp disputes
Mortgage Research Center, LLC Click Here Mortgage Research Center, LLC complaint, Mortgage Research Center, LLC complaints, Mortgage Research Center, LLC dispute, Mortgage Research Center, LLC disputes
Mortgage South of Tennessee Inc. Click Here Mortgage South of Tennessee Inc. complaint, Mortgage South of Tennessee Inc. complaints, Mortgage South of Tennessee Inc. dispute, Mortgage South of Tennessee Inc. disputes
Mortgage Unlimited L.L.C. Click Here Mortgage Unlimited L.L.C. complaint, Mortgage Unlimited L.L.C. complaints, Mortgage Unlimited L.L.C. dispute, Mortgage Unlimited L.L.C. disputes
Mountain West Financial, Inc Click Here Mountain West Financial, Inc complaint, Mountain West Financial, Inc complaints, Mountain West Financial, Inc dispute, Mountain West Financial, Inc disputes
MTH Lending Group, L.P. Click Here MTH Lending Group, L.P. complaint, MTH Lending Group, L.P. complaints, MTH Lending Group, L.P. dispute, MTH Lending Group, L.P. disputes
National Bank of Arizona Click Here National Bank of Arizona complaint, National Bank of Arizona complaints, National Bank of Arizona dispute, National Bank of Arizona disputes
National Education Servicing, LLC Click Here National Education Servicing, LLC complaint, National Education Servicing, LLC complaints, National Education Servicing, LLC dispute, National Education Servicing, LLC disputes
Nations Reliable Lending Click Here Nations Reliable Lending complaint, Nations Reliable Lending complaints, Nations Reliable Lending dispute, Nations Reliable Lending disputes
Nationstar Mortgage Click Here Nationstar Mortgage complaint, Nationstar Mortgage complaints, Nationstar Mortgage dispute, Nationstar Mortgage disputes
Nationwide Advantage Mortgage Company Click Here Nationwide Advantage Mortgage Company complaint, Nationwide Advantage Mortgage Company complaints, Nationwide Advantage Mortgage Company dispute, Nationwide Advantage Mortgage Company disputes
Nationwide Biweekly Administration, Inc Click Here Nationwide Biweekly Administration, Inc complaint, Nationwide Biweekly Administration, Inc complaints, Nationwide Biweekly Administration, Inc dispute, Nationwide Biweekly Administration, Inc disputes
Nationwide Direct Mortgage Click Here Nationwide Direct Mortgage complaint, Nationwide Direct Mortgage complaints, Nationwide Direct Mortgage dispute, Nationwide Direct Mortgage disputes
Nationwide Equities Corporation Click Here Nationwide Equities Corporation complaint, Nationwide Equities Corporation complaints, Nationwide Equities Corporation dispute, Nationwide Equities Corporation disputes
Navy FCU Click Here Navy FCU complaint, Navy FCU complaints, Navy FCU dispute, Navy FCU disputes
Neighborhood Assistance Corporation of America (“NACA”) Click Here Neighborhood Assistance Corporation of America (“NACA”) complaint, Neighborhood Assistance Corporation of America (“NACA”) complaints, Neighborhood Assistance Corporation of America (“NACA”) dispute, Neighborhood Assistance Corporation of America (“NACA”) disputes
Neighborhood Housing Services of Richmond, Inc Click Here Neighborhood Housing Services of Richmond, Inc complaint, Neighborhood Housing Services of Richmond, Inc complaints, Neighborhood Housing Services of Richmond, Inc dispute, Neighborhood Housing Services of Richmond, Inc disputes
Nelnet Click Here Nelnet complaint, Nelnet complaints, Nelnet dispute, Nelnet disputes
Network Capital Funding Corporation Click Here Network Capital Funding Corporation complaint, Network Capital Funding Corporation complaints, Network Capital Funding Corporation dispute, Network Capital Funding Corporation disputes
Network Funding, L.P. Click Here Network Funding, L.P. complaint, Network Funding, L.P. complaints, Network Funding, L.P. dispute, Network Funding, L.P. disputes
Nevada State Bank Click Here Nevada State Bank complaint, Nevada State Bank complaints, Nevada State Bank dispute, Nevada State Bank disputes
New American Funding Click Here New American Funding complaint, New American Funding complaints, New American Funding dispute, New American Funding disputes
New Cornerstone Mortgage, LLC Click Here New Cornerstone Mortgage, LLC complaint, New Cornerstone Mortgage, LLC complaints, New Cornerstone Mortgage, LLC dispute, New Cornerstone Mortgage, LLC disputes
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Online Mortgage Group, LLC Click Here Online Mortgage Group, LLC complaint, Online Mortgage Group, LLC complaints, Online Mortgage Group, LLC dispute, Online Mortgage Group, LLC disputes
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Pacific Residential Mortgage, LLC Click Here Pacific Residential Mortgage, LLC complaint, Pacific Residential Mortgage, LLC complaints, Pacific Residential Mortgage, LLC dispute, Pacific Residential Mortgage, LLC disputes
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Robert P. Tomasso Mortgage Company, Inc Click Here Robert P. Tomasso Mortgage Company, Inc complaint, Robert P. Tomasso Mortgage Company, Inc complaints, Robert P. Tomasso Mortgage Company, Inc dispute, Robert P. Tomasso Mortgage Company, Inc disputes
Rochester Home Equity, Inc. Click Here Rochester Home Equity, Inc. complaint, Rochester Home Equity, Inc. complaints, Rochester Home Equity, Inc. dispute, Rochester Home Equity, Inc. disputes
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Selene Finance Click Here Selene Finance complaint, Selene Finance complaints, Selene Finance dispute, Selene Finance disputes
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Union Bank Click Here Union Bank complaint, Union Bank complaints, Union Bank dispute, Union Bank disputes
Union National Mortgage Co Click Here Union National Mortgage Co complaint, Union National Mortgage Co complaints, Union National Mortgage Co dispute, Union National Mortgage Co disputes
United Fidelity Funding, Corp Click Here United Fidelity Funding, Corp complaint, United Fidelity Funding, Corp complaints, United Fidelity Funding, Corp dispute, United Fidelity Funding, Corp disputes
United Guaranty Click Here United Guaranty complaint, United Guaranty complaints, United Guaranty dispute, United Guaranty disputes
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Universal American Mortgage Company, LLC Click Here Universal American Mortgage Company, LLC complaint, Universal American Mortgage Company, LLC complaints, Universal American Mortgage Company, LLC dispute, Universal American Mortgage Company, LLC disputes
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VW Credit, Inc Click Here VW Credit, Inc complaint, VW Credit, Inc complaints, VW Credit, Inc dispute, VW Credit, Inc disputes
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Wallick and Volk Inc Click Here Wallick and Volk Inc complaint, Wallick and Volk Inc complaints, Wallick and Volk Inc dispute, Wallick and Volk Inc disputes
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Webster Bank Click Here Webster Bank complaint, Webster Bank complaints, Webster Bank dispute, Webster Bank disputes
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Wells Fargo Click Here Wells Fargo complaint, Wells Fargo complaints, Wells Fargo dispute, Wells Fargo disputes
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Westar Mortgage Corporation Click Here Westar Mortgage Corporation complaint, Westar Mortgage Corporation complaints, Westar Mortgage Corporation dispute, Westar Mortgage Corporation disputes
Western Union Click Here Western Union complaint, Western Union complaints, Western Union dispute, Western Union disputes
Westlake Services, LLC Click Here Westlake Services, LLC complaint, Westlake Services, LLC complaints, Westlake Services, LLC dispute, Westlake Services, LLC disputes
Whitney Bank Click Here Whitney Bank complaint, Whitney Bank complaints, Whitney Bank dispute, Whitney Bank disputes
Wholesale Capital Corporation Click Here Wholesale Capital Corporation complaint, Wholesale Capital Corporation complaints, Wholesale Capital Corporation dispute, Wholesale Capital Corporation disputes
Windermere Mortgage Services Series LLC Click Here Windermere Mortgage Services Series LLC complaint, Windermere Mortgage Services Series LLC complaints, Windermere Mortgage Services Series LLC dispute, Windermere Mortgage Services Series LLC disputes
World Omni Financial Corp. Click Here World Omni Financial Corp. complaint, World Omni Financial Corp. complaints, World Omni Financial Corp. dispute, World Omni Financial Corp. disputes
World Wide Land Transfer, Inc. Click Here World Wide Land Transfer, Inc. complaint, World Wide Land Transfer, Inc. complaints, World Wide Land Transfer, Inc. dispute, World Wide Land Transfer, Inc. disputes
WR Starkey Mortgage, LLP Click Here WR Starkey Mortgage, LLP complaint, WR Starkey Mortgage, LLP complaints, WR Starkey Mortgage, LLP dispute, WR Starkey Mortgage, LLP disputes
Yale Mortgage Corporation Click Here Yale Mortgage Corporation complaint, Yale Mortgage Corporation complaints, Yale Mortgage Corporation dispute, Yale Mortgage Corporation disputes
Zions First National Bank Click Here Zions First National Bank complaint, Zions First National Bank complaints, Zions First National Bank dispute, Zions First National Bank disputes

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DOLLENS v WELLS FARGO | NM 2nd Judicial District – Wrongful Foreclosure = $3.1 Million in Actual & Punitive Damages

DOLLENS v WELLS FARGO | NM 2nd Judicial District – Wrongful Foreclosure = $3.1 Million in Actual & Punitive Damages

STATE OF NEW MEXICO
SECOND JUDICIAL DISTRICT

Christopher Dollens et al.,

v

Wells Fargo Bank, N.A. et al.

LETTER DECISION

FACTUAL BACKGROUND

Decedent James Dollens (Decedent) purchased a home in 2003, with a loan from Wells Fargo
Home Mortgage (Wells Fargo) for $133,700. Decedent’s loan was in good standing until his
accidental death on August 18,2010 at his workplace.

Prior to Decedent’s death, he purchased a mortgage accidental death insurance policy in January
2010. The policy was marketed and sold through Wells Fargo, and underwritten by Minnesota
Life Insurance Company (Minnesota Life). The policy premium was $15.12 monthly, and was
added to Decedent’s monthly mortgage payment and collected by Wells Fargo. Wells Fargo was
both the insured and the policyholder.

After Decedent’s death his son, Christopher Dollens (Dollens), notified Wells Fargo and
Minnesota Life via telephone call of his death. He also made a claim under the accidental death
policy to Minnesota Life, and told Wells Fargo that he would be appointed personal
representative of his father’s estate. Additionally, Decedent’s widow, Dina Dollens, contacted
Wells Fargo and notified them of his death and the accidental death policy.

As a result of the death of Decedent, no payments were made for several months on the
mortgage. Wells Fargo sent monthly statements regarding the loan being in default. In
December 2010 counsel for Wells Fargo sent a demand and cure letter regarding the missed
mortgage payments. Dollens retained counsel to provide the necessary documentation to Wells
Fargo showing that he was the personal representative of his father’s estate, and to notify them
that a claim was being made under the accidental death policy. In a letter dated January 10,2011
Dollens’ counsel requested that Wells Fargo not pursue collections and foreclosure while the
claim was pending. Wells Fargo did not respond to the letter.

In February 2011 Minnesota Life also requested that Wells Fargo delay any adverse action on
the account while the claim was pending. Again, there was no response from Wells Fargo.
Minnesota Life initially denied the claim under the accidental death policy, but subsequently
reversed its decision and approved the claim. It sent a Notice of Death form to Wells Fargo
requesting the balance due on the account. Wells Fargo completed the form on February 16,
2011 and stated that the amount due on the account at the time of Decedent’s death was
$121,082.31.

Also, in February 2011, Wells Fargo initiated a foreclosure against Decedent’s home, in spite of
the request by the Personal Representative’s counsel and Minnesota Life to delay adverse action
on the mortgage. Wells Fargo hired foreclosure counsel, and costs and fees accrued as a result of
the foreclosure action being filed.

On October 5,2011 Wells Fargo received a check for $133,559.15 from Minnesota Life for the
proceeds due under the accidental death policy. Rather than post and apply the funds
immediately, Wells Fargo posted the funds five days later, on October 10, 2011, placed them
into a suspense account and paid costs and fees, before applying the payment to interest and the
outstanding principal. Applying the Minnesota Life payment in this manner led to a balance of
$4,416.45 still being owed on the account.

Although the investor, Freddie Mac, in August 2012 authorized a charge-off due to the low
balance on the account, Wells Fargo continued collection efforts for some time. As part of the
collection efforts, Wells Fargo demanded amounts due which were not owed or valid. Beverly
DeCaro (DeCaro), a Wells Fargo employee, testified that continuing collection efforts after the
charge-off and demanding amounts which were not owed, were “mistakes”. She also testified
that the manner in which this account was handled was in keeping with the customary practices
and procedures of Wells Fargo.

With regards to the manner in which the insurance proceeds were applied, Wells Fargo posited
that because of the fees and costs which accrued due to the default and foreclosure action, it did
not consider the insurance proceeds to be sufficient to payoff the account in full, thus it applied
the funds as if the account were reinstated rather than being paid off. However, Wells Fargo did
not notify the Estate that the account was reinstated, and, more significantly, did not dismiss the
foreclosure action.

Despite the October payment of$133,559.15 and testimony that Wells Fargo considered the loan
reinstated, the order of dismissal in the foreclosure action was not entered until March 20, 2012,
months after the insurance proceeds were applied to the account. Wells Fargo offered no valid
justification for its continuation of the foreclosure action for five months after being paid.

CLAIM FOR WRONGFUL FORECLOSURE AND BREACH OF THE COVENANT OF
GOOD FAITH AND FAIR DEALING

The Court was persuaded by Plaintiffs’ evidence as to this claim. The Court finds numerous
willful breaches of the covenant of good faith and fair dealing and the Court also finds that Wells
Fargo committed a wrongful foreclosure.

Plaintiffs presented significant and credible evidence that Wells Fargo marketed and sold
decedent the mortgage accidental death policy. After decedent purchased the policy, Defendant
sent decedent an acknowledgement letter stating that his application was approved and enclosing
the policy. In addition, the letter informed decedent that the policy “helps protect your family
family’s financial security”. (Stipulated Exhibit 3) There can be no doubt that the insurance
policy was marketed to homeowners and created an expectation that the balance of their
mortgage would be paid in the event of their death and was done to provide peace of mind to
decedent and to prevent financial hardship to decedent’s heirs. There can also be no doubt that
such an expectation is reasonable. Wells Fargo admitted that payment of the mortgage balance
was the purpose of the insurance. (Wells Fargo’s Answer to Request for Admission No.3)

In light of the fact that Wells Fargo represented and sold the insurance policy on behalfofMLlC,
collected the monthly premiums for the policy, and had proof of decedent’s death, it should have
taken into consideration the policy before proceeding to foreclose on the property. Wells Fargo
sold the insurance to prevent this very scenario.

In spite of the fact that Wells Fargo sold decedent the mortgage accidental death policy, and was
the policyholder and insured, upon receiving news of decedent’s death, it did nothing to assist
the Estate insofar as making a claim or appealing the denial of the claim. The Court finds that
upon learning of the death of decedent, Wells Fargo should have made a claim with MLlC for
the death benefit. Apparently, ignoring its ability to make a death benefit claim is typical of how
Wells Fargo deals with such situations. DeCaro testified that while many mortgagors die prior to
the expiration of the term of the mortgage, Wells Fargo has no policies or procedures in place to
make claims or otherwise assist estates. This is a systemic failure on the part of Wells Fargo.
Beyond the fact that it has no policies or procedures with regards to accounts with mortgage
accidental death polices, it failed in this case to even take that fact into account. The evidence
showed that both MLlC and counsel for the personal representative requested that Wells Fargo
delay adverse action on the account while the accidental death claim was pending. Instead,
Wells Fargo proceeded to foreclosure on February 9, 2011. Wells Fargo’s inability,
unwillingness, and failure to take action when requested by MLlC is shocking, particularly in
light of Wells Fargo’s ongoing commercial relationship with MLlC.

The Court also finds that Wells Fargo failed to follow the Freddie Mac servicer guidelines, to the
detriment of the Estate. As testified to by Plaintiff’s expert, Andrew Pizor, and Wells Fargo
witness DeCaro, the servicer guidelines are for the benefit of the borrower. Specifically, Wells
Fargo should have granted the Estate a forbearance on the mortgage, and it failed to do so.
Plaintiffs’ expert, Pizor, testified credibly that Wells Fargo should have granted forbearance
based on the Freddie Mac guidelines, and had it done so, late fees, attorneys’ fees, and costs
would not have been incurred, and the foreclosure would not have occurred. Furthermore, the
Estate would not have had to hire counsel to represent it in the foreclosure and incur attorneys’
fees. Thus, this misconduct by Wells Fargo caused the damages to the Estate.

The Court further finds that Wells Fargo’s application of the insurance proceeds was improper
and again to the detriment of the Estate. Rather than apply the proceeds to interest and principal,
as required by the Note, Wells Fargo paid its fees and expenses, which led to the result of the
insurance proceeds being insufficient to payoff the outstanding balance under the Note. This
practice, according to Wells Fargo employees, should not have occurred.

The typical procedure when such a check is received is to only use the funds to payoff the loan.
Wells Fargo employee , Luann Tupa, testified to the practice and procedure. In addition,
Stipulated Exhibit 27 is a series of emails among Wells Fargo employees that discusses the
practice. Apparently, the normal Wells Fargo practice is that when optional product funds (i.e.,
mortgage accidental death proceeds) are received, attorneys’ fees are waived so that the funds
can be used to payoff the loan. As noted in the emails, the reason for the practice is because of
“the incredibly high reputational risk associated with these loans. Wells Fargo actually markets
these Life Insurance products with our mortgage portfolio and we service them attached to the
loan itself…we are honoring those benefits and doing as much as we can to have the loan paid in
full per that policy.”

Yet, in this case, that practice was not followed. Instead, Wells Fargo put its interests before the
Estate and paid numerous other fees, many of which were not proper, with the result that the
insurance proceeds were insufficient to payoff the loan balance. Clearly, Wells Fargo did not
honor the trust and confidence decedent placed in it when he purchased the policy with the intent
of avoiding this very scenario. Wells Fargo Vice President, Robert Dudacek, stated that
decedent’s decision to purchase the mortgage accidental death policy ensured his “family’s
financial security.” (Stip. Exhibit 3) Unfortunately, Wells Fargo took a course of action that
was for its benefit rather than decedent’s family’s financial security. The conduct by Wells
Fargo was a breach of the covenant of good faith and fair dealing and resulted in a wrongful
foreclosure. Plaintiffs’ entitlement to damages is discussed separately.

CLAIM FOR VIOLATION OF THE UNFAIR PRACTICES ACT

The Court was persuaded by Plaintiffs’ evidence with regards to this claim. Specifically, the
Court finds that Wells Fargo violated the Act by marketing and selling mortgage accidental death
insurance to decedent for the purposes of protecting his “family’s financial security”, and then
after it received notice of decedent’s death, attempted to collect the mortgage payments, and
then instituted a foreclosure when it knew there was a mortgage accidental death policy in place,
for which it had collected premiums for some months. The Court finds that because Wells Fargo
was the “licensed agency representing … the insurer”, it had knowledge that the purpose of the
policy was to pay the mortgage balance in the event of the mortgagor’s accidental death. The
Court further finds that Wells Fargo also knew that the decedent’s Estate would not be liable for
the debt unless the claim was denied, after all appeals.

Wells Fargo marketed the life insurance policy knowing at the time it sold the policy that it had
no policies or procedures in place to make claims or otherwise assist estates. Wells Fargo took
advantage of a lack of knowledge, ability, experience or capacity of decedent’ and his family
members, and its actions tended to or did deceive decedent.

The previously set forth acts by Wells Fargo are also a violation of the UPA. In particular the
improper fees and costs assessed against the account and continuing to try to collect on the
account after the charge-off of the loan, and improperly claiming that the Estate owed more
money than was due are violations of the UPA.

There is no doubt that Wells Fargo’s conduct was intended to take advantage of a lack of
knowledge, ability, experience or capacity of decedent’s family members, and tended to or did
deceive. Further, its conduct caused damages to Plaintiffs for which they are entitled to
compensation.

CLAIM FOR BREACH OF CONTRACT

The previously set forth acts by Wells Fargo are also a breach of contract. Plaintiffs met their
burden on this claim. The Court finds that Wells Fargo breached the terms of the Note by
improperly assessing fees and costs, which resulted in assessment of additional interest, fees and
costs against the account. In fact, Wells Fargo concedes that approximately $400.00 of
inspections fees paid by the Estate shall be reimbursed by it. (Pretrial Order and #51 of Wells
Fargo’s closing argument)

The evidence established that Wells Fargo violated the terms of the Note by using the insurance
proceeds to pay its fees and costs first instead of interest and the balance due. This
misapplication of the insurance proceeds caused the Note to keep a balance after the proceeds
were applied, which resulted in the account going into default again, and Wells Fargo claiming a
debt when none would have existed, but for its misapplication of the insurance proceeds.
Plaintiffs are entitled to damages.

DAMAGES

Wells Fargo’s contention that Plaintiffs failed to mitigate their damages is unpersuasive. Wells
Fargo admits that the Estate should be reimbursed approximately $400.00 for improper fees, but
Wells Fargo has not paid that amount. Wells Fargo has not taken its own action that could have
lowered its damages or displayed any consideration for its customer/decedent’s heirs.

Plaintiffs I presented credible evidence of damages of$15,633.42 in improper late fees, improper
property preservation fees, corporate advance fees, monthly payments that would not have been
due had Wells Fargo properly applied the insurance proceeds and otherwise acted in compliance
with its duties to its customer. The Court finds each of these causes of action, Wrongful
Foreclosure; Breach of the Covenant of Good Faith and Fair Dealing; Breach of Contract; and
Unfair Trade Practices have identical damages of$15,633.42.

Undoubtedly, there was sufficient evidence presented to justify imposition of punitive damages
against Wells Fargo, or treble damages under the UPA. The evidence of Wells Fargo’s
misconduct was staggering. Certain evidence in particular highlights Wells Fargo’s indifference
to its customers. Wells Fargo charged the Estate for lawn care of the property (i.e., cutting the
grass), even though no grass was actually cut. The reason for this was that Wells Fargo claimed
that pursuant to the Freddie Mac guidelines, it was required to have the grass cut every 25-30
days; thus, it believed it was appropriate to bill the Estate for this regardless of whether it was
necessary. The property at issue did not have a lawn. This is but one of many facts supporting an
award of punitive damages.

Compelling evidence was presented that Wells Fargo acted intentionally by improperly assessing
fees and costs against the estate, misapplying the MLIC insurance proceeds check, failing to
follow the Freddie Mac servicer guidelines, failing to credit the account with the MLIC check
when it was received and assessing interest against the account for the five days it did not credit
the MLIC check, improperly initiating a foreclosure action, misrepresenting the status of the
foreclosure to the Court in pleadings, sending collection letters/monthly statements to the estate
claiming amounts not due, and improperly assessing fees against the estate for inspections which
were not necessary. All of Wells Fargo’s actions were designed to increase its profits without
regard for the decedent or his family, and in many instances, violated the terms of the Note.

Contrary to Wells Fargo’s arguments, the mistakes were not “minor.” During the pendency of the
litigation, and at trial, Wells Fargo used its computer-driven systems as an excuse for its
“mistakes”. However, the evidence established that this misconduct was systematic and not the
result of an isolated error, or an error because of some unique fact.

Plaintiffs expert testified that Wells Fargo has previously been assessed with significant punitive
damages or fines for improper behavior similar to the conduct that occurred in this matter. No
evidence was offered that Wells Fargo has changed its behavior as a result of any prior sanction
or punitive damage award. Instead the evidence was of ongoing systematic misconduct that
Wells Fargo prefers to label as “minor.”

The evidence in this case established that the type of conduct exhibited by Wells Fargo in this
case has happened repeatedly across the country. See e.g., In re Jones, 2012 WL 1155715
(Bkrtcy.E.D.La.,2012) (Wells Fargo assessed improper fees and charges, including for property
inspections and misapplied payments. Attorney fees and punitive damages awarded.); In Re
Stewart, 647 F.3 553 (5th Cir. 2011) (Assessed fees and costs against account prior to applying
mortgage payment, contrary to terms of the note.); Filson v. Wells Fargo Home Morg., Inc.,
2008 WL 3914899 (Tenn.Ct.App., 2008) (Wells Fargo wrongfully held funds in suspense
account instead of applying to mortgage balance which resulted in default and their subsequent
attempt to foreclose.); In Re Nibbelink, 403 B.R. 113 (M.D.Fla. 2009) (Wells Fargo charged
improper fees. Punitive damages and attorney fees awarded.); and De La Fuente v. Wells Fargo,
430 B.R. 764 (Bankr.S.D.Tex.2010) (Wells Fargo used bad accounting practices and failed to
correct its loan records. Punitive damages and attorney fees awarded).

Plaintiffs expert testified to an Office of the Comptroller of the Currency’s Consent Order which
found that Wells Fargo systematically mishandled foreclosures and applied payments
improperly. He further testified that what happened in this case is not an isolated incident.

While the Court cannot punish Wells Fargo for being “an unsavory individual or business”, it
nonetheless may consider its similar conduct when assessing reprehensibility as it relates to the
imposition of punitive damages. State Farm Mut. Auto. Ins. Co., v. Campbell, 538 U.S. 408,
422-23(2003). In addition, under New Mexico law, the conduct of the Defendant towards others
may be considered in the determining the nature and enormity of the wrongful conduct. UJI131827A,
NMRA.

The Court is aware that it cannot punish Wells Fargo for acts in other cases, or for conduct
outside this case. Likewise, Wells Fargo cannot be punished for acts for which it has already
been punished. However, the Court can consider the reprehensibility of Wells Fargo’s systemic
misconduct, Wells Fargo’s net worth, and the need for deterrence. The evidence of wrongful
conduct in this case merits significant punitive damages.

This Court finds that Plaintiffs’ argument is persuasive that the attorneys’ fees which were
incurred by them should be considered in factoring the amount of punitive damages that should
be awarded. Due to the egregious nature of the conduct of Wells Fargo, the Court will consider
the fees in its calculation of punitive damages.

This Court finds that but-for this misconduct by Wells Fargo, Plaintiffs would have incurred a
small amount of attorney fees. Attorney fees are a recoverable damage under the UPA and under
NMSA §48-7-24.

Despite having multiple opportunities to contest the reasonableness of Plaintiffs’ attorneys’ fees,
Defendant raised no objection to their hourly rate or the time expended on each task. In spite of
Defendant’s failure to object to the reasonableness of the fees claim, the Court reviewed each
page of the Attorney Fee Affidavit and finds that the fees claimed shall be reduced by
$15,164.00 due to the fact that there appeared to be duplication of work among the Plaintiffs’
counsel, or the work did not require the efforts of more than one counsel. The claimed 1470
hours was reduced by 51 hours for total hours expended of 1419 hours’. The Court denies the
request for costs for electronic filing and attorney travel expenses with the exception of travel
expenses incurred to depose Wells Fargo’s 30(b)(6) witnesses in St. Paul, Minnesota, but
otherwise awards all fees and costs as requested by Plaintiffs for an award of $439,051.44, plus
gross receipts taxes on the fees.

As for the attorneys’ travel expenses incurred for the deposition of Wells Fargo’s 30(b)(6)
witnesses, the Court finds that those expenses are recoverable in this circumstance. The
depositions were the subject of Plaintiffs’ Motion to Compel 30(b)(6) depositions, filed on
September 10, 2012. In response to the motion, Wells Fargo filed a Response and Motion for
Protective Order protesting the taking of the witnesses’ deposition in Albuquerque. The Court,
at that time, decided that Plaintiffs’ counsel would travel to St. Paul, Minnesota to take the
depositions. Plaintiffs’ counsel reserved the right to seek re-allocation of the costs. The Court
believes that it is appropriate for these expenses to be a recoverable cost due to Wells Fargo’s
unwillingness to reduce fees and expenses by objecting to the witnesses’ deposition being taken
in Albuquerque, in spite of Wells Fargo’s presence in Albuquerque. Further, Wells Fargo
brought two of the three witnesses to Albuquerque for trial. It was only when Plaintiffs wished
to reduce the fees/expenses in the litigation that Wells Fargo objected to them traveling to New
Mexico. Accordingly, the Court finds that the travel expenses of $3,071.07 for travel to St. Paul,
Minnesota, are recoverable and included that amount in the award of $439,051.44. The Court
finds damages of $15,633.42, plus attorneys’ fees and costs of $439,051.44, for a total of
$454,684.86.

The Court awards $2,728,109.16 in punitive damages. As stated above, the Court considered
attorneys’ fees and costs incurred in factoring the award of punitive damages. By the time of the
completion of the briefing on the attorney fees issue and responding to Defendant’s Motion to
Strike, attorneys’ fees and costs amounted to $439,051.44.

Mindful of the ratios to be considered with regards to punitive damages, the Court believes that
Wells Fargo’s conduct justifies a higher ratio. In light of the repeated, systematic nature of
Wells Fargo’s misconduct, the Court calculated the punitive damages at six times the
compensatory damages of $454,684.86. Awarding a ratio of 6 results in a punitive damages
award of $2,728,109.16. Total damages, without treble damages under the UPA, are
compensatory damages of $15,633.42, attorneys’ fees and costs of $439,051.44, and punitive
damages of$2,728,109.16, for a total damages award of$3,182,794.02.

If Plaintiffs elect to recover all of their relief under the UPA, the Court believes that pursuant to
Atherton v. Gopin, 272 P. 3d 700 (Ct. App. 2012), the fee award may also be trebled. Thus, if
Plaintiffs elect for a recovery under the UPA, the total award would be $1,364,054.58.

DEFENDANT’S MOTON TO WITHDRAW ADMISSIONS

At the time of trial, in response to Plaintiffs’ Motion for an Order Showing Admitted Facts As
Uncontroverted, Wells Fargo requested that it be allowed to withdraw the following admissions:

(2) In January of2010 Wells Fargo sold Mr. Dollens mortgage accidental death insurance under
the group policy with Minnesota Life. (Wells Fargo’s Answer to Plaintiffs’ Second Amended
Complaint, ‘il4, 73 and 99)

(18) Wells Fargo applied the Minnesota Life payment first to fees and costs assessed on
mortgage loan [sic], then to accrued interest and outstanding principal. (Wells Fargo’s Answer
to Plaintiffs’ Second Amended Complaint, ‘il51 and Ill.)

With regards to (2), Wells Fargo argued that this issue was contested by it and was mistakenly
admitted in its Answer. While Wells Fargo argued that its admission in the Answer to the
Second Amended Complaint was a mistake, the Court believes the facts belie the admission
being a mistake. For example, in the Answer to the Second Amended Complaint, Wells Fargo
admitted the fact three times. Also, in its Answer to the Amended Complaint, filed on March 12,
2012, (several months earlier) it admitted the very same fact. The Court believes that due to
Wells Fargo’s admission of this fact numerous times during the pendency of the litigation,
Plaintiffs were entitled to rely on it. Additionally, the admissions, coupled with the last-minute
request to withdraw the admissions, lead the Court to believe that Wells Fargo was attempting to
place Plaintiffs at a disadvantage for trial by attempting to change its defense strategy at a time
when Plaintiffs would have no opportunity to challenge the denial.

As for (18), Wells Fargo admitted the fact two separate times, and claims, yet again, that the
admission was a mistake. The Court was not persuaded that the admission was a mistake, but a
last-minute attempt to change strategy at trial. The Motion is denied.

DEFENDANT’S MOTION TO RECONSIDER RULING IN DUHIGG LAW FIRM V.
WELLS FARGO

At the conclusion of Plaintiffs’ evidence at trial, Wells Fargo moved for reconsideration of the
Court’s ruling in this companion case. 3 The Court denies the motion and its ruling stands as to
its denial of Defendant’s Motion to Dismiss the Unjust Enrichment claim.

As a result of that ruling, Plaintiffs’ counsel submitted an attorney fee affidavit to establish its
attorneys’ fees incurred due to pursuing the insurance proceeds under the Minnesota Life policy,
and fees incurred for having to file the lawsuit for unjust enrichment. The Court overrules Wells
Fargo’s objections as to the fees and concludes that the fees are reasonable, and prejudgment
interest of 15% is allowed. As for the costs, the Court finds that the itemized costs are
recoverable, with the exception of $26.00 in e-filing fees. Accordingly, fees and costs totaling
$51,879.08 up through April 16, 2013 should be awarded to Plaintiffs for those claims.

DEFENDANT’S MOTION TO STRIKE AND FOR SANCTIONS

In response to Plaintiffs filing an Attorney Fee Affidavit for attorneys’ fees incurred as an
element of damages due to Wells Fargo’s misconduct, rather than address the reasonableness of
the fees, Wells Fargo’s counsel instead chose to file the above-referenced Motion. The Court
deems Wells Fargo’s failure to object to the reasonableness of the fees as a waiver. For the
record, Wells Fargo misconstrued the Court’s ruling as to the issue of attorneys’ fees when the
matter was briefly discussed at the conclusion of trial. The Court does not believe that Plaintiffs’
counsel submission of the attorney fee affidavit is in violation of any ruling, nor does it merit
sanctions.

To the extent that an argument can be made that the evidence of the attorneys’ fees incurred
during the litigation was submitted after the close of evidence, the Court finds that neither of the
statutes under which the Court is awarding fees limit the recovery to the time evidence closes.
Even if this was the law, Plaintiffs’ counsel presented good cause for the evidence to be reopened
for this limited purpose. Wells Fargo failed to establish prejudice as a result of this
attorney fee affidavit being submitted during the closing argument briefing period. Moreover,
prior to Plaintiffs’ counsel filing the affidavit, they offered to counsel for Wells Fargo the
opportunity to file a sur-reply to the Closing Argument Reply. Wells Fargo’s counsel’s response
to this offer was that they were “not interested.” Thus, Wells Fargo waived the right to provide
rebuttal argument/evidence to the Court on this issue.

As for the remaining arguments that portions of Plaintiffs’ Closing Argument should be stricken,
the Court was not persuaded, except with regards to Footnote 8 of the Closing Argument Reply,
which Plaintiff s counsel agreed should not be considered by the Court.

The Motion to Strike and for Sanctions is denied.

EXHIBIT CE

The Court withheld ruling on the admissibility of this document to allow Plaintiffs’ counsel an
opportunity to review it. Plaintiffs’ counsel has informed the Court that it does not object to the
admission of the document, thus it is admitted.

Finally, the judgment that is entered in this matter should carry post-judgment interest at 15%.

A copy of this letter decision shall be placed in the Court file.

Beatrice . Brickhouse
District Judge

BJBlbjw

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Merritt v. Mozilo | The … judgments in favor of Bank of America and Lewis are REVERSED… In sum, the Merritts stated a cause of action for conspiracy to commit fraud against Bank of America and Lewis

Merritt v. Mozilo | The … judgments in favor of Bank of America and Lewis are REVERSED… In sum, the Merritts stated a cause of action for conspiracy to commit fraud against Bank of America and Lewis

. . . 

We conclude that this court lacks jurisdiction to consider the appeal as to Countrywide defendants and that the trial court did not err when it sustained the demurrers of First American and MERS. We also conclude that the trial court erred in sustaining the demurrers of Bank of America and Lewis. Accordingly, the judgments in favor of First American and MERS are affirmed and the judgments in favor of Bank of America and Lewis are reversed.

 . . .

On April 15, 2000, Does 2-30 of Bear Stearns and Lewis explained to Mozilo and other Countrywide officers that Bear Stearns and Bank of America “would provide Countrywide with the loan contract agreements” that they “needed Countrywide to get borrowers to sign, and such contracts required Mozilo to design loans in a way which would strip borrowers savings, income and property equity before leading to default and foreclosure after statute of limitations had run out on breach of contract, fraud and other civil limitations.” A month later, Does 2-30 of Bear Stearns and Lewis told Mozilo that Countrywide would have to conceal that it was acting as a broker for Bear Stearns or Bank of America. If Mozilo agreed to the terms discussed during the meetings, Bear Stearns would lend funds to borrowers for whom Mozilo brokered loans. Bear Stearns provided Mozilo with a “Master Repurchase Agreement” which committed Countrywide to broker loans for Bear Stearns and Bear Stearns would fund such loans as long as the terms of the loans met the specifications that Bank of America and Bear Stearns required. The Countrywide Board of Directors then authorized Mozilo and others to enter into agreements with Bear Stearns, Bank of America, Wells Fargo, MERS, and First American
 . . .
In sum, the Merritts stated a cause of action for conspiracy to commit fraud against Bank of America and Lewis. However, the trial court properly found that it failed to state a cause of action against First American and MERS
 
20

 . . .
IV. Disposition

The judgments in favor of First American and MERS are affirmed and the judgments in favor of Bank of America and Lewis are reversed. Costs are awarded to First American and MERS. Bank of America, Lewis, and the Merritts are to bear their own costs.

.

.

Filed 9/13/13 Merritt v. Mozilo CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

SALMA MERRITT et al., H037414
(Santa Clara County
Plaintiffs and Appellants, Super. Ct. No. CV159993)

v.

ANGELO MOZILO et al.,

Defendants and Respondents.

Plaintiffs Salma Merritt and David Merritt obtained two loans to purchase their
home. After the Merritts were unable to repay the loans, they filed an action against
multiple defendants for alleged predatory lending practices. The named defendants are
Angelo R. Mozilo, David Sambol, Michael Colyer, Countrywide Home Loans, Inc., and
Countrywide Financial Corporation (collectively Countrywide defendants), Kenneth
Lewis, and Bank of America Corporation (Bank of America), MERSCORP Holding, Inc.
(MERS), First American Title Company (First American), and Johnny Chen.1 The third
amended complaint alleged causes of action for conspiracy to commit the following:
fraud (first cause of action); breach of fiduciary duty (second cause of action); unfair
business practices (third, fourth, and fifth causes of action); breach of title insurance
contract (sixth cause of action); and intentional infliction of emotional distress (seventh

1
Johnny Chen is not a party to this appeal.
cause of action). The trial court overruled Countrywide defendants’ demurrer to four
causes of action and sustained their demurrer without leave to amend to three causes of
action. The trial court also sustained the demurrers of First American, MERS, Lewis, and
Bank of America without leave to amend to all causes of action.
On appeal, the Merritts contend that the trial court erred: (1) by failing to apply
the elements of conspiracy law; (2) by refusing the proffered amendment to the third
amended complaint and by failing to grant leave to amend; (3) by sustaining the
demurrers to the conspiracy to commit breach of fiduciary duty, conspiracy to commit
breach of title insurance contract, and conspiracy to inflict emotional distress causes of
action as to Lewis, Bank of America, MERS and First American; and (4) by sustaining
certain causes of action as to Countrywide defendants.
We conclude that this court lacks jurisdiction to consider the appeal as to
Countrywide defendants and that the trial court did not err when it sustained the
demurrers of First American and MERS. We also conclude that the trial court erred in
sustaining the demurrers of Bank of America and Lewis. Accordingly, the judgments in
favor of First American and MERS are affirmed and the judgments in favor of Bank of
America and Lewis are reversed.

I. Statement of Facts2
A. The Merritts’ Initial Loan Transaction
In February 2006, the Merritts entered into an agreement to purchase a townhouse
in Sunnyvale for $729,000. The Merritts spoke to one lender who offered to provide
2
The Merritts are representing themselves. The statement of facts is based on the
allegations in the 100-page third amended complaint. This court has augmented the
record on appeal to include 279 pages of exhibits that were attached to the third amended
complaint. We “ ‘accept as true both facts alleged in the text of the complaint and facts
appearing in exhibits attached to it. If the facts appearing in the attached exhibit
contradict those expressly pleaded, those in the exhibit are given precedence.
[Citations.]’ ” (Sarale v. Pacific Gas & Electric Co. (2010) 189 Cal.App.4th 225, 245.)
2
them with a loan with monthly payments of $4,600 per month while another offered a
loan with monthly payments of $4,800. The Merritts then contacted Colyer, who was
employed by Countrywide. Colyer told them that he could arrange a loan with payments
“maybe 40 percent lower” than what the other lenders had quoted. The Merritts provided
Colyer with their financial information, which stated that David Merritt’s gross income
for 2006 would be $60,000 and Salma Merritt would receive temporary disability
payments of $5,200.3 The disability payments would decrease to $1,400 in
September 2008.
On March 15, 2006, two days before the deadline to remove the loan contingency
from the purchase agreement, Colyer gave the Merritts a good faith estimate based on a
30-year Federal Housing Administration (FHA) loan for $729,000 with an interest rate
between 1 and 3 percent. This written estimate indicated that monthly payments would
be between $1,800 and $2,200 for principal and interest if the Merritts made a down
payment of 5 percent of the purchase price. Relying on the estimate, the Merritts
removed the loan contingency on their purchase agreement.
On March 20, 2006, Colyer informed the Merritts that his underwriters were
reluctant to approve their loan. About five days later, he informed the Merritts that he
was able to work out a loan with monthly payments of $5,200. When the Merritts told
him that they could not afford this loan, he told them that they would be subject to a
lawsuit if they did not close escrow. The Merritts then contacted the two lenders from
whom they had previously obtained estimates, and they were told that there was not
enough time to underwrite the loan prior to the close of escrow.
On March 26, 2006, Colyer called the Merritts and told them that he was able to
secure “ ‘the best loan possible.’ ” This new loan was actually two loans or a “ ‘Combo
loan’ ” that consisted of a 30-year adjustable rate mortgage for $591,200 (first loan) and a

3
There is no indication as to how frequently Salma Merritt would receive these
payments.
3
home equity line of credit (HELOC) for $147,800. The interest-only payments on the
first loan were $3,202.33 per month and the interest rate was 6.5 percent for the first five
years. The interest rate on the HELOC was 7.5 percent the first month and adjusted
periodically thereafter. The Merritts would eventually be required to pay $6,693 per
month on the first loan and an additional $2,400 per month in interest on the HELOC.
On March 26, 2006, Financial Title Company (FTC) provided Javani Wyatt, its
escrow agent, with two sets of documents that were partially filled out with financial
information. FTC also “instructed her to do whatever she could to convince [the
Merritts] to sign their set of documents, leave [them] with the second mostly blank
documents and return them to her supervisor.” When David Merritt began reading the
documents, Wyatt stated that she did not have time for him to read them and that she
would provide the Merritts with a copy of every document so they could read them later.
The Merritts signed the documents. When David Merritt began making copies of the
signed documents, Wyatt told him that they would be able to get signed copies from
Countrywide.
On March 29, 2006, Colyer filled in the blank portions of the documents that the
Merritts had signed and returned them to First American. Does 91-95 of First American
recorded the deeds of trust and the notes, and transmitted the deeds of trust to Bear
Stearns and the notes to MERS. MERS transmitted the notes to Wells Fargo. The deeds
of trust for the first loan and the HELOC, which were recorded on March 30, 2006, stated
that the borrowers were the Merritts, the lender was Countrywide Home Loans, Inc., the
trustee was Recontrust Company, N.A., and MERS was the nominee for the lender.
Between October 2006 and October 2008, the Merritts contacted Countrywide
defendants, Lewis, Chief Executive Officer (CEO) of Bank of America, and Wells Fargo,
and requested their signed loan documents. The documents were not provided. The
Merritts also asked that their loans be replaced with an FHA loan “or other traditional
loan that they could afford to repay.”
4
Between May 2006 and October 2008, Countrywide defendants, Lewis, and Bank
of America charged the Merritts four to seven interest rate points above the amount set
forth in the HELOC agreement. On January 20, 2009, Bank of America provided the
Merritts with copies of their loan documents, but “these documents were different,
specifically the HELOC Agreement and Note than what [the Merritts] recall[ed].”

B. Loan Modification
In February 2009, Does 71-80 of Bank of America “produced a modification of
original loans on orders of Wells Fargo” pursuant to its agreement with Bear Stearns “in
order to cover up . . . March 2006 fraudulent acts” and “the 2006 to 2008 overcharges.”
The loan modification “was a continuation of predatory lending practices of
Countrywide.” Though the new loan provided a temporary 4.5 percent interest rate, Does
71-80 “continued to mislead [the Merritts] b[]y representing that they only needed to pay
the interest and was in fact designed to not pay down the principle.” They also failed to
disclose that the payments did not include the HELOC payments, payment of property
taxes, homeowners insurance, and other fees.

C. Allegations of Defendants’ Roles in Alleged Conspiracy
1. Background
Beginning in January 1993, James Cayne, CEO of Bear Stearns, directed brokers
to encourage private investors to place their funds into mortgage-backed security pools,
which would be lent to individuals seeking residential loans. Cayne then began
implementing a plan in which Bear Stearns would identify real estate brokers “who
would agree to represent to borrowers that they were purchasing loans that were
traditional loans – i.e. fixed 30 year loan[s] – and conceal the fact that the loans were not
conventional loans at all[.]”

5
2. First American and MERS
In January 1995, Does 2-30 of Bear Stearns first met with Kennedy, CEO of First
American, and R.K. Arnold, CEO of MERS. Additional meetings were held in February
and March 1995, in which Does 2-30 of Bear Stearns explained how they wished to work
with Kennedy, Arnold, and Wells Fargo “to make enormous amounts of money from
residential mortgage borrowers.” Does 2-30 informed them that “they were going to
solicit billions in private dollars to fund mortgages for borrowers and needed to employ
brokers willing to craft loans designed to strip equity from Americans, increase
likelihood of loan defaults and to give Investors the opportunity to foreclose and resell
properties to make more profit. . . . Bear Stearns with Does 2-30 stated that in order to
conceal their identities from public record they would need Loan Brokers, Escrow and
Title agents, to not record Investors names with local County Clerk Recorders, but to
falsify local County Recorder Records by naming some entity in their place who would
be bound to not divulge their identities publicly.”
On February 15, 1995, Arnold informed Bear Stearns that he would form MERS,
which would record its name with county recorders in place of Bear Stearns, and thus
conceal Bear Stearns’ identity from borrowers. Between January 2000 and December
2010, Arnold instructed MERS members not to disclose to borrowers, including the
Merritts, that MERS was acting as a front man for Bear Stearns.
In February 1995, Kennedy presented the Bear Stearns proposal to the First
American Board of Directors. The board of directors then approved the agreement with
Bear Stearns that called for First American “to instruct and train its Escrow and Title
Insurance staff to falsify county records and not report title defects to borrowers or the
public.”
In early 2000, MERS agreed to enroll Countrywide as a member if Mozilo would
agree to “lead Countrywide into falsifying loan documents and county records, as well as
keeping secret the fraudulent nature of [MERS], its activities and purposes.”
6
Between January 2000 and March 2006, First American entered into agreements
with various title companies to produce escrow and title search functions that First
American could underwrite. Between January 2006 and March 2006, First American
also required these companies to ignore title defects.
On March 20, 2006, First American directed its agent FTC to conduct a title
search of the subject property. The subject property “was recorded as belonging to
MERS,” the “Note was separated from deed of trust,” and there were “multiple breaks in
the title, possibly more than a dozen holders in due course claiming rights to Property and
no way to validate a clean title.” First American directed its FTC agent to ignore the title
defects, to issue a preliminary title report, and to withhold certain documents from the
Merritts so that they would not learn of the title defects.
On March 27, 2006, Does 91-95 of First American instructed Wyatt, pursuant to
its agreement with Bear Stearns, to take two sets of documents, which consisted of two
notes and two deeds of trust, to the Merritts’ home for their signatures. Does 91-95,
acting on instructions from Colyer, did not include material terms of the loan in the set of
documents that were to be given to the Merritts, such as the amount of payments and the
interest rates. These documents, however, stated that the amount of the first loan was
$591,200 and that of the HELOC was $147,800, and that MERS was a beneficiary.
3. Bank of America and Lewis
Between January and May 2000, Does 2-30 of Bear Stearns held talks with Lewis,
CEO of Bank of America, and Mozilo, CEO of Countrywide, “about lending money to
mortgage borrowers which they wished to hire Countrywide to broker for Bear Stearns.”
During these discussions, Lewis informed Countrywide that Bank of America wanted to
lend subprime loans to achieve greater profits, but “they did not wish to lend predatory
loans directly . . . and wished to use Countrywide to broker their funds with certain types
of borrowers.”

7
On April 15, 2000, Does 2-30 of Bear Stearns and Lewis explained to Mozilo and
other Countrywide officers that Bear Stearns and Bank of America “would provide
Countrywide with the loan contract agreements” that they “needed Countrywide to get
borrowers to sign, and such contracts required Mozilo to design loans in a way which
would strip borrowers savings, income and property equity before leading to default and
foreclosure after statute of limitations had run out on breach of contract, fraud and other
civil limitations.” A month later, Does 2-30 of Bear Stearns and Lewis told Mozilo that
Countrywide would have to conceal that it was acting as a broker for Bear Stearns or
Bank of America. If Mozilo agreed to the terms discussed during the meetings, Bear
Stearns would lend funds to borrowers for whom Mozilo brokered loans. Bear Stearns
provided Mozilo with a “Master Repurchase Agreement” which committed Countrywide
to broker loans for Bear Stearns and Bear Stearns would fund such loans as long as the
terms of the loans met the specifications that Bank of America and Bear Stearns required.
The Countrywide Board of Directors then authorized Mozilo and others to enter into
agreements with Bear Stearns, Bank of America, Wells Fargo, MERS, and First
American.
Between March 2000 and March 2006, Does 2-30 of Bear Stearns and Lewis, on
behalf of Bank of America, entered into agreements that committed them to providing
funds for Countrywide “to find borrowers who could be induced into buying subprime
and later HELCO/Pay Option ARM ‘Combo’ loans.”
Between March and December 2000, Mozilo, Lewis, Does 2-30, and Wells Fargo
spoke with each other monthly regarding Mozilo’s “efforts to move Countrywide to
broker subprime loans for them.” In June 2000, Bear Stearns and Lewis asked Mozilo to
“disregard California laws regarding his real estate broker fiduciary duties, and to
manage Countrywide in a way which publicly presented Countrywide as the actual lender
of the funds being loaned out.” Mozilo agreed to do so.

8
Between July and September 2000, Sambol, president of marketing for
Countrywide, instructed Does 31-50 of Countrywide to prepare training programs for
brokers, such as Colyer, on how to conceal from borrowers Countrywide’s predatory
lending practices. Between January 2001 and March 2006, Sambol also worked with
others to design loans “with payments that increased over time to take 75, 90 and more
than 100% of borrowers income so they could ensure that borrower would default and be
subjected to foreclosure.” These loans were designed pursuant to agreements Mozilo
made with Bear Stearns and Bank of America.
Between 2003 and 2007, “approximately 50% of the loans produced by
Countrywide were loans brokered for” Bear Stearns and Bank of America. Lewis spoke
with Mozilo between January 2006 and December 2007. Mozilo told Lewis that he
would sell Countrywide “at a very cheap price” to Bank of America if Lewis “would do
whatever he could to cover up Mozilo et al deeds in the event their fraud became known
and they were prosecuted.” Lewis presented this proposal to the Bank of America Board
of Directors in December 2007. The board of directors authorized Lewis “to enter into
this and other details of agreement with Mozilo and his team.”
Between December 2007 and July 2008, Lewis and Mozilo negotiated the terms of
the sale of Countrywide to Bank of America. Lewis assured Mozilo that he “would cover
up the predatory loan practices and other frauds committed by Mozilo, Sambol and
others.” After an audit of Countrywide was conducted, Lewis learned that “most of the
Countrywide loans which they had sold, including [the Merritts’ loan] were predatory
loans . . . and that Countrywide was intentionally falsifying monthly charges to
borrowers,” including the Merritts. After Lewis lobbied the board of directors to view
this as “a good opportunity” for Bank of America, the board of directors accepted Lewis’
assessment and his agreement with Mozilo to cover up Countrywide’s fraud. The board
of directors also “agreed that since they were generating hundreds of millions of dollars
in additional profits by falsely overcharging borrowers, that they would not stop
9
overcharging borrowers, including [the Merritts], unless borrowers complained.”
Between July 2008 and March 2009, Bank of America sent the Merritts monthly billing
statements which overcharged them.

II. Statement of the Case
In December 2009, the Merritts filed a complaint against Countrywide defendants,
Lewis, Bank of America, Wells Fargo, Chen, and John Stumpf for restitution, injunctive
relief, rescission, and civil penalties. The complaint alleged causes of action for
conspiracy to commit fraud, misleading statements, unfair business practices, violation of
Civil Code section 1920, race discrimination in housing, and conspiracy. After Bank of
America filed a demurrer to the complaint, the trial court sustained the demurrers with
leave to amend to five causes of action and overruled the demurrers to the conspiracy
cause of action.
In August 2010, prior to the deadline for First American to file its response to the
initial complaint, the Merritts filed a first amended complaint pursuant to Code of Civil
Procedure section 472 against Countrywide defendants, Lewis, Bank of America, Chen,
John Benson, MERS, and First American. The causes of action alleged in the first
amended complaint included fraud, conspiracy, breach of fiduciary duty, unfair business
practices, breach of contract, breach of title insurance contract, and intentional infliction
of emotional distress. Following demurrers to the first amended complaint, the trial court
sustained the demurrers of Countrywide defendants, Lewis, Bank of America, and MERS
with leave to amend. However, the trial court sustained Wells Fargo’s demurrer without
leave to amend. The Merritts filed an appeal from the order sustaining the demurrer of
Wells Fargo without leave to amend.
Before the hearing on First American’s demurrer to the first amended complaint in
December 2010, the Merritts filed a second amended complaint against the same
defendants with the exception of Wells Fargo. The second amended complaint alleged
10
causes of action for fraud and misrepresentation, conspiracy, breach of fiduciary duty,
unfair business practices, breach of contract, breach of title insurance contract, and
intentional infliction of emotional distress. The trial court then sustained demurrers to the
second amended complaint with leave to amend.
In April 2011, the Merritts filed their third amended complaint. The third
amended complaint alleged causes of action for conspiracy to commit the following:
fraud, breach of fiduciary duty, unfair business practices, breach of title insurance
contract, intentional infliction of emotional distress. In July 2011, the Merritts filed an
amendment to their third amended complaint. Following a hearing in August 2011 on the
demurrers to the third amended complaint, the trial court issued an order striking the
amendment to the third amended complaint. The trial court also sustained the demurrers
of First American, MERS, Lewis, and Bank of America without leave to amend to all
causes of action. However, the trial court overruled Countrywide defendants’ demurrer
to four causes of action and sustained their demurrer without leave to amend to three
causes of action.
In October 2011, the Merritts filed a notice of appeal.
In December 2011, this court reversed the judgment in Merritt v. Wells Fargo
Bank, N.A. (Dec. 19, 2011, H036259) [nonpub. opn.] and directed the trial court to enter
a new order sustaining Wells Fargo’s demurrer to the first and second causes of action
with leave to amend to state a single cause of action for conspiracy to defraud.4 This
court also rejected the Merritts’ procedural claims and concluded that they had waived
their claims of error regarding their causes of action for unfair business practices, breach
of fiduciary duty, breach of contract, breach of the title insurance contract, and intentional
infliction of emotional distress.

4
This court has taken judicial notice of the opinion in case No. H036259, Merritt v.
Wells Fargo Bank, N.A.
11
III. Discussion
A. Jurisdiction
Countrywide defendants contend that this court lacks jurisdiction to consider the
appeal as to them. They point out that the trial court overruled their demurrer to the first,
third, fourth, and fifth causes of action.
“In general, the right to an appeal is entirely statutory; unless specified by statute
no judgment or order is appealable.” (Garau v. Torrance Unified School Dist. (2006)
137 Cal.App.4th 192, 198.) Code of Civil Procedure section 904.1, subdivision (a)
provides that only final judgments are appealable. “Judgments that leave nothing to be
decided between one or more parties and their adversaries . . . have the finality required
by section 904.1, subdivision (a).” (Morehart v. County of Santa Barbara (1994) 7
Cal.4th 725, 741.) Here, as the Merritts concede, a final judgment has not been entered
against Countrywide defendants. Thus, this court lacks jurisdiction to consider the appeal
as to them.
The Merritts’ reliance on Kuperman v. Great Republic Life Ins. Co. (1987) 195
Cal.App.3d 943 (Kuperman) is misplaced. In that case, the trial court struck the
plaintiffs’ third amended complaint in its entirety, thereby leaving no issues to be
determined between the plaintiffs and one of the defendants. (Id. at pp. 946-947.) The
Court of Appeal held the order was appealable as a final judgment. In contrast to
Kuperman, here, issues remain to be determined between the Merritts and Countrywide
defendants.
The Merritts also argue that policy reasons support treating the trial court’s order
as an appealable order. However, appellate review is available only where authorized by
statute, and Code of Civil Procedure section 904.1 does not grant us jurisdiction on this
basis.
The Merritts alternatively request that we treat their appeal as a petition for a writ
of mandate. “ ‘A petition to treat a nonappealable order as a writ should only be granted
12
under [the most] extraordinary circumstances, “ ‘compelling enough to indicate the
propriety of a petition for writ . . . in the first instance . . . .’ [Citation.]” ’ ” (Wells
Properties v. Popkin (1992) 9 Cal.App.4th 1053, 1055.) Since the circumstances before
us are neither extraordinary nor compelling, we decline to treat the present appeal as to
Countrywide defendants as a petition for a writ of mandate.
We next consider the issue of our jurisdiction as to the other defendants. Though
the record contains a judgment of dismissal in favor of First American and thus is
appealable under Code of Civil Procedure section 904.1, there is no judgment of
dismissal in favor of Lewis, Bank of America or MERS. “The general rule of
appealability is this: ‘An order sustaining a demurrer without leave to amend is not
appealable, and an appeal is proper only after entry of a dismissal on such an order.’
[Citation.] But ‘when the trial court has sustained a demurrer to all of the complaint’s
causes of action, appellate courts may deem the order to incorporate a judgment of
dismissal, since all that is left to make the order appealable is the formality of the entry of
a dismissal order or judgment.’ ” (Melton v. Boustred (2010) 183 Cal.App.4th 521, 528,
fn. 1.) Thus, we will treat the order sustaining the demurrers of Lewis, Bank of America,
and MERS as appealable.

B. Sufficiency of the Third Amended Complaint
1. Waiver
We first consider whether the Merritts have failed to substantively address their
conspiracy to commit fraud cause of action (first) and conspiracy to commit unfair
business practices causes of action (third, fourth, and fifth), and thus have waived any
argument of error by the trial court in sustaining the demurrer without leave to amend to
these causes of action.
We presume that the judgment is correct and the appellant has the burden of
overcoming this presumption by affirmatively showing error. (Ketchum v. Moses (2001)
13
24 Cal.4th 1122, 1140-1141.) “When an appellant fails to raise a point, or asserts it but
fails to support it with reasoned argument and citations to authority, we treat the point as
waived. [Citations.]” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.)
In challenging the trial court’s ruling on the conspiracy to commit fraud and the
conspiracy to commit unfair business practices causes of action, the Merritts rely on the
legal principles on conspiracy and fraud as set forth in Merritt v. Wells Fargo Bank, N.A.
Thus, they have met their burden as to the conspiracy to commit fraud cause of action.
However, there was no discussion in that case regarding the conspiracy to commit unfair
business practices. In the present appeal, the Merritts have failed to present any reasoned
argument with citations to authority as to the underlying tort of unfair business practices.
They do not set forth the elements of unfair business practices and how their third, fourth,
and fifth causes of action survive the demurrers. Merely summarizing the allegations in
the third amended complaint and claiming that the trial court did not understand the
elements of conspiracy law is insufficient.5 Though we conclude that they have not
waived the issue of whether the trial court erred in sustaining the demurrer to the first
cause of action for conspiracy to commit fraud, the Merritts have waived any further
claim of error on appeal with regard to the third, fourth, and fifth causes of action.
2. Standard of Review
“In determining whether plaintiffs properly stated a claim for relief, our standard
of review is clear: ‘ “We treat the demurrer as admitting all material facts properly
pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We
also consider matters which may be judicially noticed.” [Citation.] Further, we give the
complaint a reasonable interpretation, reading it as a whole and its parts in their context.

5
We remind the Merritts that self-represented litigants are “held to the same
standards as attorneys. [Citation.]” (Kobayashi v. Superior Court (2009) 175
Cal.App.4th 536, 543.) “[S]elf-representation is not a ground for exceptionally lenient
treatment.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984.)
14
[Citation.] When a demurrer is sustained, we determine whether the complaint states
facts sufficient to constitute a cause of action. [Citation.] And when it is sustained
without leave to amend, we decide whether there is a reasonable possibility that the
defect can be cured by amendment: if it can be, the trial court has abused its discretion
and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.]
The burden of proving such reasonable possibility is squarely on the plaintiff.’
[Citations.]” (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
3. Conspiracy
Since each cause of action alleges a conspiracy to commit a specified tort, we
summarize the general principles regarding conspiracy. “Conspiracy is not a cause of
action, but a legal doctrine that imposes liability on persons who, although not actually
committing a tort themselves, share with the immediate tortfeasors a common plan or
design in its perpetration. [Citation.] By participation in a civil conspiracy, a
coconspirator effectively adopts as his or her own the torts of other coconspirators within
the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability
co-equal with the immediate tortfeasors.” (Applied Equipment Corp. v. Litton Saudi
Arabia Ltd. (1994) 7 Cal.4th 503, 510-511 (Applied Equipment).) However, “[b]y its
nature, tort liability arising from conspiracy presupposes that the coconspirator is legally
capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by
law and is potentially subject to liability for breach of that duty.” (Id. at p. 511.)
“The elements of a civil conspiracy are ‘(1) the formation and operation of the
conspiracy; (2) the wrongful act or acts done pursuant thereto; and (3) the damage
resulting. [Citations.]’ ” (Mosier v. Southern Cal. Physicians Ins. Exchange (1998) 63
Cal.App.4th 1022, 1048.) Because civil conspiracy is easy to allege, “plaintiffs have a
weighty burden to prove it. [Citation.] They must show that each member of the
conspiracy acted in concert and came to a mutual understanding to accomplish a common
and unlawful plan, and that one or more of them committed an overt act to further it.
15
[Citation.] It is not enough that the conspiring officers knew of an intended wrongful act,
they had to agree—expressly or tacitly—to achieve it. Unless there is such a meeting of
the minds, ‘ “the independent acts of two or more wrongdoers do not amount to a
conspiracy.” ’ ” (Choate v. County of Orange (2000) 86 Cal.App.4th 312, 333.)
“[A] plaintiff is entitled to damages from those defendants who concurred in the
tortious scheme with knowledge of its unlawful purpose. [Citation.] Furthermore, the
requisite concurrence and knowledge ‘ “ ‘may be inferred from the nature of the acts done,
the relation of the parties, the interests of the alleged conspirators, and other
circumstances.’ ” ’ [Citation.] Tacit consent as well as express approval will suffice to
hold a person liable as a coconspirator.” (Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d
773, 784-785.)6
a. First Cause of Action – Conspiracy to Commit Fraud
The Merritts contend that “the CEO’s with Boards of Directors of Bear Stearns,
Wells Fargo, MERS[], [First American, Bank of America] and Countrywide . . . entered
into agreements as early as 2000 and onward, to help Bear Ste[a]rns defraud borrowers.”
“The elements of fraud are: (1) a misrepresentation (false representation,
concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to
defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.”
(Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990.) “ ‘Promissory
fraud’ is a subspecies of the action for fraud and deceit. A promise to do something
necessarily implies the intention to perform; hence, where a promise is made without
such intention, there is an implied misrepresentation of fact that may be actionable fraud.
[Citations.] [¶] An action for promissory fraud may lie where a defendant fraudulently

6
The Merritts allege in the first, second, sixth and seventh causes of action that
defendants “knowingly and willfully conspired and agreed among themselves to” commit
the underlying torts. Conclusory allegations regarding the formation and operation of a
conspiracy are insufficient and are disregarded. (Choate v. County of Orange, supra, 86
Cal.App.4th at p. 333.)
16
induces the plaintiff to enter into a contract. [Citations.]” (Lazar v. Superior Court
(1996) 12 Cal.4th 631, 638 (Lazar).)
“In California, fraud must be pled specifically; general and conclusory allegations
do not suffice. [Citations.] ‘. . . [¶] This particularity requirement necessitates pleading
facts which “show how, when, where, to whom, and by what means the representations
were tendered.” ’ [Citation.] A plaintiff’s burden in asserting a fraud claim against a
corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of
the persons who made the allegedly fraudulent representations, their authority to speak, to
whom they spoke, what they said or wrote, and when it was said or written.’ [Citation.]”
(Lazar, supra, 12 Cal.4th at p. 645.)
In the present case, the third amended complaint alleges that, executives of Bear
Stearns, Bank of America, and Countrywide held talks to discuss lending money to
mortgage borrowers beginning in 2000. Lewis informed Countrywide that Bank of
America wanted to lend subprime loans to achieve greater profits, it did not want to be
publicly identified with predatory lending, and it wanted Countrywide to target certain
borrowers. Bank of America would also provide Countrywide with contracts for
borrowers to sign that would be designed “so borrowers would not be able to pay off
loans,” thereby leading to default and foreclosure. Between March and December 2000,
executives of Countrywide, Bank of America, and Wells Fargo spoke monthly regarding
Mozilo’s “efforts to move Countrywide to broker subprime loans for them.” Lewis also
asked Mozilo to “disregard California laws regarding his Real Estate Broker fiduciary
duties” which Mozilo agreed to do. Pursuant to this plan, Countrywide began a training
program for its brokers on predatory lending practices as well as a deceptive marketing
campaign. Between 2003 and 2007, approximately 50 percent of the loans produced by
Countrywide were funded by Bear Stearns and Bank of America. Beginning in January
2006, Lewis and Mozilo discussed Bank of America’s purchase of Countrywide “at a
very cheap price” if Bank of America agreed to cover up Countrywide’s fraudulent
17
conduct. In December 2007, the Bank of America Board of Directors authorized Lewis
to enter into the agreement with Countrywide, and Bank of America purchased
Countrywide in July 2008. Bank of America then learned that “most of Countrywide’s
loans which they had sold, including [the Merritts], were predatory loans” and that
“Countrywide was intentionally falsifying monthly charges to borrowers” including the
Merritts. Between July 2008 and March 2009, Bank of America continued
Countrywide’s practice of overcharging the Merritts. In 2009, the Merritts signed a loan
modification agreement with Bank of America, which “was a continuation of predatory
lending practices of Countrywide,” and Bank of America misled them as to the terms of
the agreement.
Here, there are no allegations that Bank of America had any interest in the
Merritts’ first loan or the HELOC or that they funded these loans, thus distinguishing it
from Wells Fargo’s participation in the conspiracy to defraud the Merritts. However,
Lewis, on behalf of Bank of America, agreed before the Merritts obtained their loans
from Countrywide to supply Countrywide with funds if Countrywide would sell
subprime loans for Bank of America. Bank of America also specified the terms of the
loans that Countrywide would offer to borrowers. Thus, Lewis and Bank of America
participated in the formation of the conspiracy with Countrywide and came to a mutual
understanding of how to accomplish their unlawful goal. After Countrywide
implemented the plan, Lewis and Bank of America agreed to cover up Countrywide’s
fraudulent conduct, continued Countrywide’s practice of overcharging the Merritts, and
misled them as to the terms of the loan modification agreement. Thus, these allegations
were sufficient to state a cause of action against Bank of America and Lewis for
conspiracy to commit fraud.
As to First American and MERS, the first cause of action alleges that Kennedy
and Arnold met with Bear Stearns and agreed to conceal Bear Stearns’ identity from
borrowers. First American and Arnold would ignore “title defects.” These title defects
18
consisted of: (1) deeds of trust showing MERS as the beneficiary, and (2) the
“separation” of deeds of trusts and the underlying notes resulting from loan
securitization.
“As case law explains, ‘MERS is a private corporation that administers the MERS
System, a national electronic registry that tracks the transfer of ownership interests and
servicing rights in mortgage loans. Through the MERS System, MERS becomes the
mortgagee of record for participating members through assignment of the members’
interests to MERS. MERS is listed as the grantee in the official records maintained at
county register of deeds offices. The lenders retain the promissory notes, as well as the
servicing rights to the mortgages. The lenders can then sell these interests to investors
without having to record the transaction in the public record. MERS is compensated for
its services through fees charged to participating MERS members.’ [Citation.]” (Gomes
v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1151 (Gomes).) Under
California law, MERS has authority to act as the beneficiary under a deed of trust.
(Gomes, at pp. 1155-1156 [MERS authorized to initiate foreclosure as deed of trust
beneficiary]; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 270-271
[MERS has the authority to act as nominee for the lender] (Fontenot).) Here, the deeds
of trust state that MERS was “the beneficiary.” However, the deeds of trust also
specifically restrict MERS’ interest to that of a “ ‘nominee’ ” for the lender. “A ‘nominee’
is a person or entity designated to act for another in a limited role—in effect, an agent.”
(Fontenot, at p. 270.) The Merritts have not alleged that they were unable to make their
payments or negotiate a modification of their loans because they did not know who the
lender was. Thus, the Merritt’s contention that MERS is not a proper beneficiary under
the deed of trust cannot support their claim that First American and MERS engaged in
any fraudulent conduct by recording MERS as a beneficiary.
Similarly, the Merritts’ allegations that securitization of the loans constituted a
title defect do not state a claim of conspiracy to commit fraud against First American and
19
MERS. Securitization does not affect the validity of a loan. A secured promissory note
that is traded on the secondary market remains secured because the mortgage or deed of
trust follows the note. (Civ. Code, § 2936 [“The assignment of a debt secured by
mortgage carries with it the security.”].) Thus, a lender or trustee does not lose its
interest in the loan when it “was packaged and resold in the secondary market, where it
was put into a trust pool and securitized.” (Lane v. Vitek Real Estate Industries Group
(E.D.Cal. 2010) 713 F.Supp.2d 1092, 1099; Hafiz v. Greenpoint Mortgage Funding, Inc.
(N.D.Cal. 2009) 652 F.Supp.2d 1039, 1043 [rejecting the plaintiff’s theory that
“defendants lost their power of sale pursuant to the deed of trust when the original
promissory note was assigned to a trust pool”].)
The Merritts also alleged that First American was liable for misrepresentation and
concealment of material facts because it was an agent of the other defendants. However,
conclusory agency or secondary liability allegations are insufficient to state a cause of
action. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 133-134, fn.
12 (Moore).) The Merritts further alleged that Wyatt, who was an agent of First
American, gave the Merritts documents which “were partially filled out with financial
information.” These allegations are also insufficient to state a claim that First American
participated in a conspiracy to defraud the Merritts. First American was the escrow agent
in the transaction, and its only duty was to comply with the written instructions of the
parties to the escrow. (Summit Financial Holdings, Ltd. v. Continental Lawyers Title Co.
(2002) 27 Cal.4th 705, 711 (Summit).) First American had nothing to do with arranging,
brokering, processing, underwriting, or making the loans to the Merritts.
In sum, the Merritts stated a cause of action for conspiracy to commit fraud
against Bank of America and Lewis. However, the trial court properly found that it failed
to state a cause of action against First American and MERS.

20
b. Second Cause of Action – Conspiracy to
Commit Breach of Fiduciary Duty
“In order to plead a cause of action for breach of fiduciary duty, there must be
shown the existence of a fiduciary relationship, its breach, and damage proximately
caused by that breach.” (Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1101, superseded
by statute on another ground as stated in Pavicich v. Santucci (2000) 85 Cal.App.4th 382,
396.) To state a cause of action for conspiracy to breach a fiduciary duty, a plaintiff must
establish that each of the coconspirators owed a fiduciary duty to him or her and are
potentially subject to liability for breach of that duty. (Applied Equipment, supra, 7
Cal.4th at p. 511.)
It is not clear what the Merritts’ arguments are as to this cause of action. They
begin by summarizing the allegations in the third amended complaint and assert that
these facts “support fiduciary claim.” They then rely on Smith v. Home Loan Funding,
Inc. (2011) 192 Cal.App.4th 1331 (Smith) for the proposition that “it is not a Company’s
name or how a Company is registered, or even mostly conducts business with most
borrowers, but how they actually behave on a case-by-case basis. That is what
determines whether a registered mortgage broker forms a fiduciary relationship or not.” 7
Smith recognized that “[a] mortgage broker has a fiduciary duty to a borrower. A
mortgage lender does not.” (Smith, supra, 192 Cal.App.4th at p. 1332.) In Smith, the
defendant funded most of its loans to borrowers and brokered other loans to third party
lenders. (Ibid.) One of the defendant’s loan officers told the plaintiff that he was a
mortgage broker and that he could “ ‘shop the loan’ ” for her. (Id. at. p. 1333.) Though
the loan officer repeatedly told the plaintiff that the loan would not have a prepayment
penalty, a prepayment penalty was included in a rider to the promissory note. (Id. at

7
The Merritts also alleged that each of the defendants was an agent for the other
defendants. As previously stated, conclusory agency or secondary liability allegations
are insufficient to state a cause of action. (Moore, supra, 51 Cal.3d 120, 133-134, fn. 12.)
21
p. 1334.) Smith held that there was substantial evidence that the defendant and its loan
officer acted as mortgage brokers and breached their fiduciary duties to the plaintiff. (Id.
at pp. 1335-1336.)
Here, the Merritts have not alleged any facts that Bank of America and Lewis
acted as mortgage brokers. Since they acted as lenders, they owed no fiduciary duty to
the Merritts.8
We next consider the nature of the duty owed by First American and MERS to the
Merritts. First American owed a fiduciary duty to the parties to the escrow. (Summit,
supra, 27 Cal.4th at p. 711.) However, as previously stated, First American’s duty was to
comply with the written escrow instructions. (Ibid.) “Absent clear evidence of fraud, an
escrow holder’s obligations are limited to compliance with the parties’ instructions.”
[Citations.]” (Ibid.) Here, the Merritts did not allege that First American breached any
escrow instructions. They appear to be arguing that First American breached its fiduciary
duty by recording MERS as the beneficiary under the deed of trust, thereby falsifying
records and failing to inform the Merritts of title defects. As previously discussed,
neither First American nor MERS engaged in any fraudulent conduct. Moreover, the
Merritts cite no authority for the proposition that MERS owed a fiduciary duty to them.
c. Sixth Cause of Action – Conspiracy to
Breach of Title Insurance Contract
The Merritts also contend that though they titled the cause of action as conspiracy
to breach title insurance contract, “the allegations show[] . . . [First American] and its

8
For the same reason, Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773 does not
assist the Merritts’ position. In Wyatt, the defendants were engaged in the loan brokerage
business. Prior to signing the loan documents, the plaintiffs asked the broker about “the
rate of interest, late payments, and the size of the balloon payment due at the end of the
loan period.” (Id. at p. 782.) Since the broker provided “materially misleading and
incomplete information,” Wyatt held that there was substantial evidence to support the
finding that the defendants had breached their fiduciary duties to the plaintiffs. (Id. at
pp. 782-783.)
22
agent FTC, was hired by the Merritts with its promise to perform fraud-free Title Search,
fraud-free Title Report and fraud-free Close of Escrow.”
In this cause of action, the Merritts alleged that First American issued a policy of
title insurance to them, breached the policy by recording MERS as the beneficiary and
refused to indemnify them for their losses pursuant to the terms of the policy. The
Merritts also alleged that Countrywide defendants, Bear Stearns, Wells Fargo, MERS,
and First American “conspired and agreed among themselves to breach the Title
Insurance purchased” by the Merritts.
However, the Merritts cannot state a claim for conspiracy to breach a title
insurance contract, because no such cause of action exists. “Conspiracy is not a cause of
action, but a legal doctrine that imposes liability on persons who, although not actually
committing a tort themselves, share with the immediate tortfeasors a common plan or
design in its perpetration. [Citation.]” (Applied Equipment, supra, 7 Cal.4th at pp. 510-
511.) Given that there can be no cause of action for conspiracy to breach a title insurance
contract, the trial court properly sustained the demurrer to the sixth cause of action as to
Bank of America, Lewis, MERS, and First American.
Moreover, to the extent that the Merritts are now contending that First American
breached its contract with them, their contention fails. First, as previously discussed,
recordation of the deeds of trust which designated MERS as the beneficiary is not
actionable under California law. Second, schedule B of the policy, which was attached to
the third amended complaint, states that “this Policy does not insure against loss, costs,
attorneys’ fees, and expenses resulting from . . . [¶] . . . [¶] [the] Deed of Trust . . . .”
Third, the Merritts’ claim that First American breached the title policy by refusing to
deliver copies of the loan documents, failing to close escrow at the title company,
discouraging them from reading the loan documents, not preparing the appropriate
number of copies of the loan documents, failing to deliver a notice of their right to
rescind the loans with filled in dates, not delivering Truth in Lending disclosures filled in,
23
and refusing to allow David Merritt to make copies of their signed loan documents has no
merit. “Title insurance is a contract by which the title insurer agrees to indemnify its
insured against losses caused by defects in or encumbrances on the title not excepted
from coverage. [Citation.]” (Vournas v. Fidelity Nat. Title Ins. Co. (1999) 73
Cal.App.4th 668, 675.) The Merritts’ allegations are not covered under the policy and
thus cannot constitute a breach of the title policy.
d. Seventh Cause of Action – Conspiracy to Commit
Intentional Infliction of Emotional Distress
The Merritts next contend that Countrywide defendants, First American, MERS,
Lewis, Bank of America, and Bear Stearns conspired to intentionally inflict emotional
distress on them. They argue that they were promised “one 30-year fixed loan with
payments between $1,800 and $2,200; but were given at the very last moment two loans
totaling $5,000 and set to balloon into $10,000 monthly installments” and were
overcharged on their loans.
The elements of an intentional infliction of emotional distress claim are (1) the
defendant’s conduct was extreme and outrageous; (2) the defendant intended to cause
emotional distress or recklessly disregarded the probability of causing emotional distress;
(3) the plaintiff suffered severe emotional distress; and (4) the defendant’s outrageous
conduct was the cause of the severe emotional distress. (Davidson v. City of Westminster
(1982) 32 Cal.3d 197, 209 (Davidson).)
Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892 (Sanchez-Corea)
provides an example of outrageous conduct by a lender. In Sanchez-Corea, McGowen, a
vice-president with the defendant bank, handled the account for the plaintiffs’ company
and used bank funds to cover overdrafts on this account without the bank’s knowledge.
(Id. at pp. 896-897.) The bank also provided a loan of $70,000 to the plaintiffs. (Id. at
p. 897.) After the bank discovered that McGowen had embezzled funds, including
$240,000 that was allegedly credited to the plaintiffs’ account, the bank demanded
24
$240,000 from the plaintiffs and refused to extend additional credit. (Ibid.) The
plaintiffs disagreed with the bank as to the amount of money that they owed and
eventually brought suit against the bank. (Ibid.) The California Supreme Court
concluded that there was sufficient evidence to support the award of damages to the
plaintiffs for intentional infliction of emotional distress, and summarized the evidence as
follows: “There is evidence from which the jury could have determined that the Bank
acted outrageously in reaction to the plight in which the Sanchez-Coreas found
themselves as a result of vice president McGowen’s conduct. Testimony indicated that
Bank officers Jones and Timerman failed to advise plaintiffs that the Bank had
determined not to give [the plaintiffs’ company] any further loans. According to
Sanchez-Corea, the Bank’s office misrepresented to him that further financial assistance
would be forthcoming but only if plaintiffs assigned all their past, present and future
accounts receivable to the Bank. A day after the plaintiffs made such an assignment, the
Bank refused the further loan. There was evidence that the Bank forced the Sanchez-
Coreas to execute excessive guarantees and security agreements. In addition to [the
plaintiffs’ company’s] pledge of over $262,000 of accounts receivable for a $70,000 note,
Mrs. Sanchez-Corea executed a $50,000 guaranty for a $30,000 note, and Mr. Sanchez-
Corea was directed to purchase a life insurance policy in the amount of $40,000 naming
the Bank as beneficiary. Furthermore, there was extensive testimony about an incident at
the San Franciscan Hotel in San Francisco. According to the testimony, Bank officials
publicly ridiculed Mr. and Mrs. Sanchez-Corea, using profanities in their statements. A
friend who was with the Sanchez-Coreas testified that Bank employees were pointing at
the Sanchez-Coreas and the employees were laughing about the financial plight of [the
plaintiffs’ company].” (Id. at pp. 908-909.)
In contrast to Sanchez-Corea, here, as a matter of law, none of the conduct alleged
by the Merritts was “ ‘so extreme as to exceed all bounds of that usually tolerated in a
civilized community. [Citations.]’ ” (Davidson, supra, 32 Cal.3d at p. 209.)
25
Accordingly, the trial court did not err by sustaining the demurrer to the seventh cause of
action for intentional infliction of emotional distress as to Bank of America, Lewis,
MERS, and First American.9
Relying on Bird v. Saenz (2002) 28 Cal.4th 910 (Bird), the Merritts contend that
“when a plaintiff witnesses a third-party victim being inflicted with harm, a cause of
action exist[s] for the party who witnessed infliction.” Thus, they claim that they have
stated a cause of action for negligent infliction of emotional distress under the bystander
theory since they “witnessed each other going through certain damage as a result of the
continuous fraud over an initial 3 year period; after they tried fruitlessly to rescind their
loans; loss thousands, faced financial ruin and homelessness.” There is no merit to this
contention.
Bird stated the elements of a cause of action for negligent infliction of emotional
distress under a bystander theory: “ ‘a plaintiff may recover damages for emotional
distress caused by observing the negligently inflicted injury of a third person if, but only
if, said plaintiff: (1) is closely related to the injury victim; (2) is present at the scene of
the injury-producing event at the time it occurs and is then aware that it is causing injury
to the victim; and (3) as a result suffers serious emotional distress—a reaction beyond
that which would be anticipated in a disinterested witness and which is not an abnormal
response to the circumstances.’ [Citation.]” (Bird, supra, 28 Cal.4th at p. 915.) Bird
held that the plaintiffs could not state a negligent infliction of emotional distress cause of
action because they were not present in the operating room when their relative’s artery
was transected and they did not know that the care she was receiving was inadequate.
(Id. at pp. 921-922) Here, the alleged injury occurred when the loan documents were

9
Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949 does
not assist the Merritts. In Kendall, the defendant bank did not challenge the sufficiency
of the evidence to support the award of damages for infliction of emotional distress. (Id.
at p. 955.)
26
signed by the Merritts and they were unaware that it was causing injury. Accordingly,
they cannot state a cause of action under this theory.

C. Amendment to Third Amended Complaint
The Merritts argue that the trial court erred by striking the amendment to their
third amended complaint. We disagree.
The trial court found that the Merritts “filed . . . a document purported to be an
Amendment to the Third Amended Complaint. This document was filed without leave of
court and was objected to by the moving Defendants. As such, the Court finds that it was
filed improperly and strikes this filing.”
Code of Civil Procedure section 472 provides in relevant part: “Any pleading may
be amended once by the party of course, and without costs, at any time before the answer
or demurrer is filed, or after demurrer and before the trial of the issue of law thereon, by
filing the same as amended and serving a copy on the adverse party . . . .” “ ‘[A] litigant
does not have a positive right to amend his pleading after a demurrer thereto has been
sustained. “His leave to amend afterward is always of grace, not of right. [Citation.]”
[Citation.]’ . . . After expiration of the time in which a pleading can be amended as a
matter of course, the pleading can only be amended by obtaining the permission of the
court. [Citations.]” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th
603, 612-613.)
Here, demurrers had been filed, and thus the Merritts no longer had a right to
amend as a matter of course. Instead, they were required to obtain the trial court’s
permission to file the amendment to the third amended complaint. Since the Merritts
failed to follow the proper procedure, the trial court did not err by striking the amendment
to the third amended complaint.
We next consider whether the Merritts have failed to carry their burden that they
could amend their complaint to cure any defects. “To satisfy that burden on appeal, a
27
plaintiff ‘must show in what manner he can amend his complaint and how that
amendment will change the legal effect of his pleading.’ [Citation.] The assertion of an
abstract right to amend does not satisfy this burden. [Citation.] The plaintiff must clearly
and specifically set forth the ‘applicable substantive law’ [citation] and the legal basis for
amendment, i.e., the elements of the cause of action and authority for it. Further, the
plaintiff must set forth factual allegations that sufficiently state all required elements of
that cause of action. [Citations.] Allegations must be factual and specific, not vague or
conclusionary. [Citation.]” (Rakestraw v. California Physicians’ Service (2000) 81
Cal.App.4th 39, 43-44.)
Here, the Merrits request that this court review the amendment to the third
amended complaint. This amendment adds allegations primarily against the Countrywide
defendants and causes of action for negligent torts. However, the Merritts have failed to
state how this amendment will cure the defects in their third amended complaint. They
have not set forth the applicable law and specific factual allegations that satisfy the
elements of a cause of action. Accordingly, we conclude that the Merritts have failed to
carry their burden on appeal.

IV. Disposition
The judgments in favor of First American and MERS are affirmed and the
judgments in favor of Bank of America and Lewis are reversed. Costs are awarded to
First American and MERS. Bank of America, Lewis, and the Merritts are to bear their
own costs.

28
_______________________________
Mihara, J.

WE CONCUR:

______________________________
Elia, Acting P. J.

______________________________
Márquez, J.

Merritt et al. v. Mozilo et al.
H037414

29

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U.S. Bank, N.A. v Rodriguez | NYSC – U.S. Bank & Wells Fargo Slammed for NOT Following HAMP Guidelines…

U.S. Bank, N.A. v Rodriguez | NYSC – U.S. Bank & Wells Fargo Slammed for NOT Following HAMP Guidelines…

Decided on September 5, 2013

Supreme Court, Bronx County

 

U.S. Bank, N.A., as Trustee for Bear Stearns asset Backed Securities, 2006- AC1, Plaintiff,

against

Jorge Luis Rodriguez, et al., Defendants.

380504-11

 

Shapiro, DiCaro & Barak, LLC, Rochester, NY (Scott Ferraro, Esq., of counsel) for the Plaintiff ; Legal Services NYC-Bronx, Bronx, NY (James J. Jantarasami, Esq., of counsel) for the Defendant.

Robert E. Torres, J.

In this foreclosure action, the defendant Jorge Luis Rodriguez (Rodriguez) seeks an order, pursuant to CPLR 3408 and Uniform Civil Rule 202.12, finding that the plaintiff U. S. Bank, N.A. (US Bank), and its loan servicer, Wells Fargo Bank (Wells Fargo), violated their duty to negotiate in good faith during mandatory settlement conferences. Rodriguez maintains that the plaintiff has not provided a timely decision on his loan modification application that comports with the applicable federal Home Affordable Modification Program (HAMP) guidelines.

Specifically, Rodriguez claims that Wells Fargo mishandled and misapplied the HAMP guidelines as to his eligibility for HAMP. Therefore, Wells Fargo materially violated the HAMP guidelines, and demonstrated a lack of good faith. Consequently, Rodriguez is seeking an order that: (1) directs US Bank to process and decide his loan modification under the HAMP guidelines; (2) tolls the accrual of interest, late fees and US Bank’s counsel fees until such time as the court determines that the plaintiff is in compliance with CPLR 3408; and (3) tolls the accrual of interest, late fees and US Bank’s counsel fees retroactively from June 22, 2012. Plaintiff opposes the motion, and insists it has fairly complied with the HAMP guidelines.

For the reasons that follow, the defendant’s motion is granted.

Background

A. HAMP

The United States Department of Treasury (DOT) established HAMP pursuant to Sections 101 and 109 of the Emergency Economic Stabilization Act of 2008 (12 USC 5201-5261). HAMP is designed to prevent avoidable home foreclosures by incentivizing loan servicers to reduce the required monthly mortgage payments for certain struggling homeowners. Under the program, servicers are obliged to abide by guidelines promulgated by DOT when determining a mortgagor’s eligibility for a permanent loan modification (see US Dept. of Treasury, Making Home Affordable Program, Handbook for Servicers of Non-GSE Mortgages, at 27 [Dec. 15, 2011]). A Servicer Participation Agreement (SPA) committed Wells Fargo to perform certain loan modifications and foreclosure prevention services for eligible loans. The SPA incorporated a “Program Documentation,” which set forth guidelines, procedures, instructions, documentation, and directives issued by DOT, Fannie Mae, or Freddie Mac in connection with the duties of participating servicers.

Originally, the HAMP Tier 1 program was set up to assist borrowers who are delinquent on their mortgages for their primary residence or facing imminent risk of default. Borrowers in risk of defaulting on their mortgages can then apply to the program, and the mortgage servicer provides the modification or prevention services to the borrower. As a condition of participating in the program, servicers must comply with guidelines and procedures issued by DOT (see Commitment to Purchase Financial Instrument and Servicer Participation Agreement, https://www.hmpadmin.com/portal/programs/servicer.jsp; see also Home Affordable Modification Program: Overview, https://www.hmpadmin.com/portal/programs/hamp.jsp [accessed July 30, 2013]).

HAMP Tier 1 has the following guidelines of eligibility: (1) the mortgage loan must have originated prior to December 31, 2008; (2) the mortgage must be a first lien; financial hardship must be demonstrated by the homeowner; the property must be one to four units; there cannot be any previous loan modification under HAMP; the property must be the principal residence; and the monthly payment must be greater than 31% of the borrower’s monthly gross income. Once a borrower meets this criteria, a servicer will review the financial information provided by the borrower to determine if he is eligible for the Tier 1 program [*2](see hamp4owners.org/hamp-program/guideline/hamp-tier-1 [accessed July 31, 2012]).

Thereafter, the servicer is to add to the loan balance or principal, the accrued interest, homeowner’s insurance, property taxes and other out-of-pocket escrow advances as well as other servicing advances such as legal fees paid to third parties (also known as PITI, or principal, interest, taxes and insurance). After the servicer has the new balance figured, the interest rate on the loan is reduced to hit the 31% ratio for the target monthly mortgage payment (id.). This rate can be as low as 2%. If lowering the interest rate to 2% does not get the monthly payment amount low enough, the servicer can review whether the loan should be extended to 480 months (see US Treasury, Supplemental Directive 09-01, at 9). If lowering the interest rate and extending the loan term still doesn’t meet the target monthly payment of 31%, the servicer is to then subtract a calculated amount from the unpaid principal balance. This “principal forebearance” is non-interest bearing, and non-amortizing. It will, as well, create a balloon payment that will be due at the earliest possible time that the borrower transfers the property, pays off the loan through refinancing, or when the loan matures.

The first program was expanded on June 1, 2012 to assist more distressed homeowners qualify for loan modifications, and it is known as the Tier 2 program (see www.makinghomeaffordable.gov/HAMP [accessed July 31, 2013]). . The Tier 2 program now permits owners of rental or commercial properties to modify mortgages and reduce monthly payments. As set forth in Tier 1, HAMP Tier 2 does not apply to mortgage loans through Fannie Mae or guaranteed by the Veterans Administration or another federal agency. Tier 2 allows modification of up to three mortgages. The program applies to loans originated before January 1, 2009. Servicers are also required to offer forbearance assistance to unemployed homeowners for 12 months. Borrowers who weren’t successful with a HAMP 1 Trial Payment Plan (TPP) are eligible to apply for HAMP 2 modification, as long as 12 months have passed. In addition, the Tier 2 program revised the debt-to-income ratio for qualification, and sets the pre-modification monthly mortgage payment below 31 % of debt-to-income ratio. Borrowers are not eligible under Tier 2 if their debt-to-income ratio is less than 25% or greater than 42%. Tier 2 eligibility also requires a 10% or greater reduction in monthly principal and interest payments after modification. If the reduction is less, the mortgage is not eligible for modification under HAMP. The Net Present Value was also revised to qualify more homeowners. The Tier 2 program contemplates instances where [*3]a borrower may be ineligible for the Tier 1 program. Therefore, if a the borrower’s pre-modification monthly payment was below 31%, or a positive NPV could not be achieved without excessive forebearance, or if a negative NPV came up, the Tier 2 program could potentially help an unqualified Tier 1 applicant.

Starting in February 2013, the range of allowable monthly payments expanded. As explained in Supplemental Directive 1209, the new monthly payment must be between 10% and 55% of a borrower’s gross income or a range specified by the loan servicer, provided that the allowable percentage range fits between the old/new percentage (id.). This new rule affects the check of HAMP Tier 2 eligibility after the proposed new payment is calculated, but it does not otherwise change the procedure for calculating the new payment. All home loans that meet the HAMP eligibility criteria for HAMP Tier 1 or Tier 2 are to be evaluated using a particular software, which automatically evaluates for both Tier 1 and Tier 2, and is to reflect the NPV results of modification under each tier.

DOT directives implementing HAMP provide that within 30 days from the date that an initial package is received from a person applying for a HAMP modification, and if the borrower’s documentation is complete, the servicer must either “[s]end the borrower a Trial Period Plan Notice[,] or [m]ake a determination that the borrower is not eligible for HAMP and communicate this determination to the borrower in accordance with the Borrower Notice guidance . . . .” (US Dept. of Treasury, Supplemental Directive No. 10-01, at 3 [Jan. 28, 2010]).

B. The Parties

In the present case, there is a trust that holds the legal title to the Rodriguez loan. US Bank acts as trustee on behalf of the trust. Trustees seldom exercise any meaningful day-to-day authority over a loan. There are also investors in the trust, who have a beneficial ownership interest in a loan and its proceeds. Wells Fargo is both a mortgage lender and a mortgage loan servicer. As the loan servicer, Wells Fargo stands in for the trust, the beneficial owners of the loans, and the investors in virtually all dealings with homeowners. It is the servicer to whom homeowners mail their monthly payments, the servicer who provides billing and tax statements for homeowners, and the servicer to whom a homeowner in distress must address a petition for a loan modification. [*4]

C. Rodriguez’s Efforts to Modify his Loan

CPLR 3408 (a) requires a mandatory settlement conference in every residential foreclosure action during which the plaintiff, through its servicer, and the defendant are to negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible. Here, the parties first appeared for a settlement conference on January 19, 2012. Rodriguez was unrepresented at the time. Rodriguez was informed that the financial documents that he had submitted were stale. He was allegedly directed to submit a new application package. Thereafter, the matter was adjourned to April 24, 2012. Subsequently, on March 22, 2012, Rodriguez submitted, through his Legal Services NYC-Bronx attorney, an application for a loan modification through HAMP.

On April 24, 2012, another schedule was agreed upon by the parties for the exchange of financial documents and information. On May 16, 2012, Rodriguez submitted updated financials to Wells Fargo, the loan servicer. At the third settlement conference, held on June 22, 2012, US Bank had not made any decision on the loan modification request, and the matter was adjourned to July 20, 2012 for a decision on the defendant’s application.

At the fourth settlement conference on July 20, 2012, a decision on the defendant’s loan modification application had not been made. Nonetheless, the bank’s representative, Shawn Malloy (Malloy) indicated that the defendant would likely be denied for the HAMP Tier 1 Program because the monthly mortgage payment, including principal, interest, property taxes and hazard insurance was supposedly less than 31% of the defendant’s gross monthly income. Defendant’s attorney pointed out that the bank was using an incorrect principal and interest payment to calculate the defendant’s application. He argued that Wells Fargo used an inappropriate figure of $1,338 per month. The correct amount was $1,681.99, which permits the defendant to clear the eligibility threshold and go on to the “waterfall” test. Defendant’s counsel then requested a tolling of interest retroactively to June 22, 2012 based on the plaintiff’s failure to comply with the prior order. A decision was not made on the tolling request. The case was adjourned to August 17, 2012.

On or about August 10, 2012, US Bank sent a denial letter stating that “we were unable to reduce your principal and interest payment by 10% or more as required to comply with the terms of the [HAMP] program” (see affirmation of Jantarasami, exhibit E, Denial Letter). On August 12, 2012, defendant’s [*5]counsel, via email, responded to the denial letter as follows:

“Without addressing the accuracy of your client’s computations, be advised that the requirement your client refers to applies only in HAMP Tier 2 evaluations. We still have not received any Tier 1 determination, and per HAMP rules, a Tier 2 analysis is to be conducted (if at all) only after a borrower is considered and rejected for Tier 1. It is not a requirement of the Tier 1 Standard Modification Waterfall that the monthly PITIA be reduced by 10%. Please have your client run a HAMP Tier 1 analysis of my client as soon as possible. The next settlement conference in this matter is scheduled for 8/17/12 and your client’s attached letter does not satisfy its obligation per the 7/20/12 Order, to issue a decision on my client’s HAMP application.”

(id., exhibit F).

At the fifth settlement conference on August 17,2012, the court was advised that Rodriguez had been denied both a HAMP modification and a traditional modification. The case was adjourned to September 7, 2012 for US Bank to respond to the concerns raised in the defendant’s email.

At the next settlement conference held on September 7, 2012, US Bank had still not responded to the August 12, 2012 email. Defendant’s counsel advised the court that he would appeal Wells Fargo’s decision. The court adjourned the matter to October 26, 2012, and set September 21, 2012 as a deadline for US Bank to respond with a detailed denial letter with any and all values used in the review be sent in writing directly to the defendant’s attorney.

On September 18, 2012, US Bank resent the denial letter of August 10, 2012, purporting to respond “as requested at the 9/7/12 conference” (id., exhibit I). Defendant’s counsel wrote to the plaintiff’s representative, advising that a tolling application would follow for failing to respond to his August 12, 2012 email.

On October 11, 2012, US Bank sent a new denial letter. Again, the proffered basis for the denial was exactly the same as previously raised by the plaintiff, namely, that the pre-modification principal, interest, taxes was allegedly less than 31% of the defendant’s gross monthly income. Once again, defendant’s counsel notified the plaintiff that it was relying on the wrong principal and interest figure (PI), i.e. the interest- only PI, instead of the fully amortizing PI. Plaintiff did not respond further, and at the seventh settlement conference, the [*6]defendant’s counsel was directed by Referee Josephine Bastone to submit his lack of good faith/tolling application on written motion. On November 30, 2012, the present motion was submitted to the court.

Discussion

As an initial matter, not before the court for decision is the efficacy or wisdom of Wells Fargo’s internal procedures for evaluating loan modification requests. The issue here is whether the facts as alleged by Rodriguez are sufficient to demonstrate a violation of CPLR 3408 (f)’s good faith requirement. The court finds that Rodriguez has demonstrated that the plaintiff violated its duty to negotiate in good faith during the settlement conference process.

The New York Legislature has not established a definitive test to determine a lack of good faith. Generally, good faith under New York case law is an interpretative concept, “necesitat[ing] examination of a state of mind” (Credit Suisse First Boston v Utrecht-America Fin. Co., 80 AD3d 485, 487 [1st Dept 2011], quoting Coan v Estate of Chapin, 156 AD2d 318, 319 [1st Dept 1989]). “Conduct such as providing conflicting information, refusal to honor agreements, unexcused delay, unexplained charges, and misrepresentations have been held to constitute bad faith’” (Flagstar Bank, FSB v Walker, 37 Misc 3d 312, 317 n 6 [Sup Ct, Kings County 2012] [internal citations omitted]; see also One West Bank, FSB v Greenhut, 36 Misc 3d 1205 [A], 2012 NY Slip Op 51197 [U] [Sup Ct, Westchester County 2012]). The test applied in Flagstar is tethered to the specific HAMP guidelines. Using the HAMP provisions as an appropriate benchmark of good faith in negotiations, as stated in Flagstar, would enable the bank to abide by both state and federal regulations (Flagstar Bank, FSB v Walker. 36 Misc 3d at 317-318).

Another line of cases extended this concept to ascribe a lack of good faith to a plaintiff-mortgagee, which has engaged in dilatory tactics and “failed to provide proper review and extend to defendant an affordable loan modification” (see Deutsche Bank Trust Co. of America v Davis, 32 Misc 3d 1210 [A], 2011 NY Slip Op 51238 [U], *2 [Sup Ct, Kings County 2011]). The test applied in a third line of cases is the failure to “work out a loan modification, as required by statute, with a homeowner who is gainfully employed” and “earns income [sufficient] to sustain a modified payment” (see BAC Home Loans Servicing v Westervelt, 29 Misc 3d 1224 [A], 2010 NY Slip Op 51992 [U], *5 [Sup Ct, Dutchess County 2010]). However, a duty to negotiate in good faith does [*7]not guarantee that the negotiations will be fruitful (see e.g. JP Morgan Chase, N.A. v Ilardo, 36 Misc 3d 359, 379 [Sup Ct, Suffolk County 2012]). Nor does the duty to negotiate in good faith compel either party to consent to the other’s position. Thus, the mere fact that the parties failed to reach a loan modification agreement does not necessarily mean that the duty to negotiate in good faith was breached. As stated by the Appellate Division, First Department, in Wells Fargo Bank v Van Dyke (101 AD3d 638, 639 [1st Dept 2012]), “[a]ny determination of good faith must be based on the totality of the circumstances.”

The court has an affirmative duty to “ensure that each party fulfills its obligations to negotiate in good faith and see that conferences are not unduly delayed or subject to willful dilatory tactics so that the rights of both parties may be adjudicated in a timely manner” (Uniform Rule 202.12-a[c] [4]). In an appropriate case, equity requires the cancellation of interest awarded to the mortgagee on an unpaid principal balance of a mortgage (see e.g. Citibank, N.A. v Van Brunt Props, LLC, 95 AD3d 1158, 1159 [2d Dept 2012]; Norwest Bank Minn., N.A. v E.M.V. Realty Corp., 94 AD3d 835, 837 [2d Dept 2010]).

As previously stated, where it is shown that a foreclosure plaintiff failed to follow HAMP guidelines, such failure violates the plaintiff’s CPLR 3408(f) duty to proceed in good faith. In this case, the court concludes that under the totality of the circumstances test, Wells Fargo violated its good faith obligation.

To begin, Wells Fargo attended and participated in all settlement conferences. Apparently another foreclosure prevention alternative, a traditional loan modification, was considered by Wells Fargo in the instant case. But it is unclear whether Wells Fargo’s dealings contemplated a loan modification. Specific eligibility and review procedures are delineated in the HAMP guidelines, which mandate how a servicer and borrower are to conduct themselves during the loan modification process. Participants, as well, in the mandatory settlement conference part must abide by those same guidelines.

Defendant’s counsel claims that he has studied the HAMP loan modification criteria, and noticed significant errors by Wells Fargo that affected his client’s eligibility for a loan modification. Conversely, Wells Fargo asserts reliance on a formula it uses to calculate HAMP modifications that was allegedly created by DOT, and imbedded in the computer program it uses to calculate HAMP modifications. However, strict adherence [*8]to internal guidelines, and not the HAMP guidelines, may not meet the requisites of “good faith.”

The question then becomes whether predetermined reliance on in-house standards requiring either the acceptance or rejection of a loan modification application, as opposed to a fact-sensitive and accommodating inquiry under the HAMP guidelines, is “good faith” sufficient to survive this CPLR 3408 (f) motion.

This court uses trained referees to handle the mandatory settlement conference part. Following the instruction of Referee Bastone, on August 17, 2012, to address Rodriguez’s concerns and provide him with a more detailed explanation for the denial of his loan modification application, Wells Fargo agreed to respond to Rodriguez’s request. However, the plaintiff’s last letter regarding the defendant’s modification application failed to comply with the court’s directive (see Wells Fargo Bank v Salyamov, 2012 WL 6729904, 2012 NY Misc LEXIS 5792 [Sup Ct, Richmond Cty, 2012]).

Moreover, Rodriguez’s representation that Wells Fargo inexplicably refused to evaluate him under both the Tier 1 and Tier 2 programs, which the loan servicer must do under the HAMP guidelines, stands unchallenged by Wells Fargo. Rodriguez certainly has the right to be evaluated under Tier 1 and Tier 2. Rodriguez, as well, has the right to examine the criteria used by Wells Fargo to approve or reject his application. He also has the right to ask Wells Fargo to consider using an appropriate principal and interest figure. These are not unreasonable requests. Wells Fargo having agreed to the terms of the HAMP guidelines was under an obligation to honor those requests. Wells Fargo, however, ignored those rights and requests. Thus, Wells Fargo categorically refused to comply with the current HAMP directives, and work toward a possible loan modification in “good faith.” Just because Wells Fargo followed its internal guidelines does not immunize its conduct from court review or sanctions.

Conclusion

In the interests of equity, it is hereby

ORDERED that the defendant Jorge Louis Rodriguez’s motion for an order pursuant to CPLR 3408 (f) and Uniform Rule 202.12 finding the plaintiff in violation of its duty to negotiate in good faith during the settlement conferences is granted; and it is further [*9]

ORDERED that the plaintiff U. S. Bank, N.A., and its loan servicer, Wells Fargo, are barred from collecting any interest, unpaid late fees, or attorneys’ fees incurred from July 20, 2012 (the date that the defendant received the HAMP denial in court) until the defendant is given a final detailed determination on his loan modification application, after review of all possible HAMP options for which he may be eligible; and it is further

ORDERED that once a final review and determination are completed, the parties are directed to contact the mandatory settlement conference part to schedule a conference; and it is further

ORDERED that a bank representative fully familiar with the file and with full authority to settle the matter appear at the next conference; and it is further

ORDERED that appearing counsel must be fully authorized to dispose of the case as required by statute (see CPLR 3408[c]); and it is further

ORDERED that failure of the plaintiff, and its loan servicer, to comply with this order may result in further sanctions, including exemplary damages and loss of the privilege of appearing by local counsel in all foreclosure settlement conferences conducted in Bronx County.

Dated: August , 2013

ENTER:

_______________________

ROBERT E. TORRES J.S.C.

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Heritage Pac. Fin., LLC v Monroy (2013) 215 CA4th 972 | DANGEROUS ASSIGNMENTS

Heritage Pac. Fin., LLC v Monroy (2013) 215 CA4th 972 | DANGEROUS ASSIGNMENTS

Even if this were a real liar’s loan (i.e., when the borrower had truly, and voluntarily, lied in her loan application), the original lender might well have had a cause of action for fraud, but not the successor holder of the mortgage, to whom no such lies had been told. Heritage’s standing was as an assignee, not as a victim.

REFinBlog-

The same appellate panel that delivered a terrifying punch to the residential lending industry a few months ago in Jolley v Chase Home Fin., LLC (2013) 213 CA4th 872, reported at 36 CEB RPLR 46 (Mar. 2013) (which is now official, since the supreme court declined to review it), has now given another branch of that industry an equally frightening setback in Heritage Pac. Fin., LLC v Monroy (2013) 215 CA4th 972. More fully described on p 84 of this issue, the case concerned a financial institution (Heritage) whose business model involved buying up defaulted junior mortgages that had already been rendered worthless by senior foreclosures, and then attempting to collect whatever it could from the former mortgagors, even when-as in this case-those mortgages were purchase money loans, and therefore uncollectible because of CCP §580b’s one-action rule.

After acquiring Ms. Monroy’s mortgage and sending three demand letters to her, Heritage discovered that she had apparently falsified her income on her original loan application and had wrongly represented the purchase as an arm’s-length transaction when, in fact, she was buying the house from her son. Emboldened by these discoveries, Heritage wrote Monroy again and also filed a complaint against her for fraud. She responded by cross-complaining that Heritage was violating the California and federal Fair Debt Collection Practices Acts.

After a lot of procedural skirmishing, the trial court sustained Monroy’s demurrer to Heritage’s complaint and granted summary judgment to her on her cross-complaint, awarding her $1 in damages but also $90,000 in attorney fees and costs. All of this was affirmed on appeal.

The published and lengthy appellate decision, although sometimes surprising in its reasoning, gives a good deal of guidance to practitioners-especially those who represent creditors and their collection arms or cohorts-as to the many dangers lurking in attempts to collect residential debt obligations too energetically.

Careless Handling of Assignments …

continue reading [REFinBlog]

 

Filed 3/29/13  Heritage Pacific Financial v. Monroy CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b).  This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. 

 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

 

HERITAGE PACIFIC FINANCIAL, LLC,

              Plaintiff, Cross-defendant, and

              Appellant,

v.

MARIBEL MONROY,

              Defendant, Cross-complainant, and

              Respondent.

 

 

 

 

      A135274, A136043

 

      (Contra Costa County

      Super. Ct. No. C10-01607)

 

Maribel Monroy executed two promissory notes with WMC Mortgage Corp. (WMC) when purchasing a home in Richmond, California in 2006 (the Richmond property).  After a foreclosure on the senior deed of trust, Heritage Pacific Financial, LLC (Heritage) acquired Monroy’s second promissory note from WMC.  Heritage sent Monroy a letter attached to a complaint and summons advising her that Heritage had filed a lawsuit against her alleging various fraud claims.  The letter admonished that any misinformation provided by Monroy on her original loan application with WMC could result in civil liability and that Heritage would proceed with a lawsuit if it were unable to resolve the matter with Monroy.  Monroy filed a cross-complaint against Heritage, alleging violations of the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) and the federal Fair Debt Collection Practices Act (FDCPA or the Act).

              After permitting Heritage to amend its complaint three times, the trial court sustained Monroy’s demurrer against Heritage’s pleading on the grounds that Heritage had failed to provide or allege an assignment agreement with sufficient particularity to demonstrate that the assignment of Monroy’s promissory note included an intent to assign WMC’s tort claims against the borrower.  Thereafter, Monroy moved for summary judgment or adjudication on her cross-complaint.  The court denied her motion as to her claim of a violation of the Rosenthal Act but granted the motion as to a violation of the FDCPA, on the condition that Monroy agree to damages in the amount of one dollar.  Monroy agreed to the damage award of one dollar and the court entered judgment in her favor.  Subsequently, Monroy requested attorney fees and costs under title 15 of the United States Code section 1692k(a)(3), and the court found that Monroy was the prevailing party and entitled to attorney fees and costs in the amount of $89,489.60.  The court concluded that the issues regarding the cross-complaint and complaint were interrelated and could not be reasonably separated.  Heritage separately appealed the judgment and the award of attorney fees and we, on our own motion, consolidated the appeals.

              On appeal, Heritage argues that it sufficiently set forth allegations to support a claim that the assignment from WMC included an intent to assign WMC’s tort claims against Monroy and that the trial court improperly weighed the evidence when sustaining the demurrer without leave to amend.  It also contends that triable issues of fact exist regarding Monroy’s FDCPA claim and therefore the trial court erred in granting summary judgment.  Finally, it objects to the award and amount of attorney fees.  We are not persuaded by Heritage’s argument, and affirm the judgment and the award of attorney fees.  

BACKGROUND

              Monroy is Spanish speaking and works as a housekeeper.  On November 26, 2006, she purchased the Richmond property for $425,000.  Monroy executed two promissory notes with WMC.  She obtained a senior mortgage loan for $340,000 and a junior mortgage loan for $85,000 (the note, the second note, or the promissory note).  Both promissory notes were secured by a deed of trust on the property.  The beneficiary of each deed of trust was Mortgage Electronic Servicing Corporation.

Both the first and second promissory notes provided in the first paragraph the following:  “I understand that the Lender may transfer this Note.  The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note will be called the ‘Note holder.’ ”  Monroy signed a form stating that the information in the loan application was true and correct and acknowledged that “any intentional or negligent misrepresentation of this information . . . may result in civil liability, including monetary damages.”

On her loan application, Monroy claimed to make $9,200 per month as the owner of Maribel’s Cleaning Services.  Monroy signed a certification that she did not have a family or business relationship with the seller of the property. 

The seller of the Richmond property was Marvin E. Monroy, Monroy’s son.  He received $53,258.49 as a result of the sale.  Monroy bought the house from her son because he was not able to make the mortgage payments. 

At this same time, on November 20, 2006, property in Manteca (the Manteca property) was purchased in Monroy’s name and a promissory note was executed for the amount of $312,000.  According to Monroy, the Manteca property was purchased under her name as a result of identity theft.  She stated that in 2006 she was unaware of this transaction.  She averred that she has never been to the Manteca Property.  In 2008, Monroy submitted to the credit-reporting agency a verified fraud statement.  In this statement, she asserted that a mortgage in Manteca was opened in her name as a result of the identity theft.

Monroy failed to make her mortgage payments on the Richmond property, which resulted in a foreclosure on the senior deed of trust on August 28, 2008. 

On May 22, 2009, Heritage acquired Monroy’s second promissory note as part of a “larger pool of loans.”  Heritage is a limited liability company organized under the laws of the State of Texas and its principal place of business is in Dallas County, Texas.  Heritage sent Monroy a letter stating that it had purchased her second unpaid loan.  Heritage was unsuccessful in speaking with Monroy.  In October 2009, Heritage sent by certified mail another notice of the transfer of the ownership of the note.  Heritage sent Monroy a third notice in December 2009.  In this notice, it asserted that she was obligated to pay Heritage the unpaid balance on the second promissory note. 

Heritage did further research and concluded that Monroy had misrepresented her income and submitted false documentation regarding her income on her original loan application.  Heritage also discovered that Monroy’s son was the seller of the Richmond property.  Additionally, it uncovered the documents related to the Manteca property. 

On June 1, 2010, Heritage filed a complaint against Monroy for intentional misrepresentation, fraudulent concealment, promise without intent to perform, and negligent misrepresentation based on her loan application with WMC.  Heritage alleged that it was not barred from pursuing its action by any antideficiency statute because it was not seeking a deficiency judgment for the balance of a promissory note following foreclosure, but was seeking a judgment for Monroy’s alleged fraud in connection with her loan application.  Heritage requested actual damages in the amount of $85,000, the sum owed on the promissory note, and also asked for punitive damages. 

On June 27, 2010, Monroy received a letter dated May 25, 2010, from Heritage that attached Heritage’s summons and complaint against her.  The letter advised her about its civil action against her and stated in bold type:  “Should you wish to voluntarily provide us with your federal tax return transcripts, a signed copy of Form 4506-T (Request for Transcript of Tax Return) and/or your proof of residency in the property made the subject of our Complaint, please contact us at your earliest convenience . . . .”  The letter directed:  “If you notify us of your intent to voluntarily provide us with this documentation, we may suspend actions to provide you with an opportunity to provide us with copies of the same.”  The letter told Monroy to notify Heritage if she wanted to provide a copy of her promissory note as Heritage, “as assignee of the promissory note, has the right to reverify the information contained therein.”  The letter admonished Monroy that “any misinformation or misrepresentations provided in the [loan] application are a violation of federal law and may result in ‘civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation’ for which Heritage . . . currently seeks.”  The letter warned that if Heritage was unable to resolve the matter by the date Monroy’s answer to the complaint was due, Heritage would “have no other option but to proceed with litigation against” her.  The letter declared that it was “from a debt collector” and was “an attempt to collect a debt.”

On July 28, 2010, Monroy answered Heritage’s complaint and filed a cross-complaint alleging violations of the Rosenthal Act (Civ. Code, § 1788 et seq.) and the FDCPA (15 U.S.C. § 1692 et seq.).  A little more than a month later, on September 2, Heritage demurred to the cross-complaint and filed a motion to strike the pleading.  On November 16, 2010, Monroy filed a motion for judgment on the pleadings on Heritage’s complaint.

On December 28, 2010, the trial court overruled Heritage’s demurrer to Monroy’s cross-complaint and denied its motion to strike.  On this same date, the court granted with leave to amend Monroy’s motion for judgment on Heritage’s complaint.  The court explained that Heritage had failed to allege that the lender had assigned its fraud claims to it and Heritage had conceded that no California legal authority held that the assignment of a promissory note automatically constituted an assignment of a lender’s fraud claims.  The court added:  “If [Heritage] chooses to amend its complaint so as to specifically allege an assignment of the lender’s fraud claims, [Heritage] shall make such allegations with the particularity required of a fraud cause of action, and [Heritage] shall attach as an exhibit to the amended complaint a full and legible copy of any written assignment agreement.”

Heritage filed its first amended complaint for the same four causes of action on December 23, 2010.  Heritage attached Monroy’s second promissory note for $85,000, and alleged in the pleading that the assignment was recorded on the last page of the promissory note. 

Monroy demurred to the first amended complaint.  On April 7, 2011, the trial court sustained Monroy’s demurrer “with one last opportunity” for Heritage to amend.  (Bold omitted.)  The court explained that Heritage had “still failed to adequately allege an assignment of the original lender’s tort claims, as distinct from an assignment of the original lender’s contractual rights under the subject promissory note.”  The court cited Sunburst Bank v. Executive Life Ins. Co. (1994) 24 Cal.App.4th 1156, 1164.  The court concluded that Heritage had “not attached to its complaint a written assignment agreement, as specified in the court’s ruling on the motion for judgment on the pleadings, and [Heritage] ha[d] not alleged the formation of an oral assignment agreement.”

The trial court noted in the order that Heritage had represented at oral argument that it would amend the pleading to allege “the existence of either a written assignment of the original lender’s tort claims, or an assignment agreement implied in fact from circumstances other than the mere assignment of contractual rights.”  The court admonished Heritage that its future pleading must “allege with the particularity required of a fraud cause of action all the circumstances showing the formation and terms” of an implied agreement if Heritage was relying on an assignment implied in fact.  The amended complaint also needed to allege “whether the subject promissory note was assigned before or after foreclosure of the first deed of trust and the corresponding extinguishment of the second deed of trust securing the promissory note.” 

On May 10, 2011, Heritage filed its second amended complaint (the SAC).  The SAC again set forth claims for intentional misrepresentation, fraudulent concealment, promise without intent to perform, and negligent misrepresentation.  Heritage alleged that after the foreclosure on the first deed of trust, WMC sold Monroy’s promissory note secured by the second deed of trust on the Richmond property and “assigned any and all rights WMC may have including but not limited to any right to fraud claims against [Monroy].  Such assignment is evidenced by signature and stamp of the secretary of WMC . . . on the last page of the note . . . .”  Heritage further alleged:  “In assigning [Monroy’s] loan, [Heritage] as assignee of WMC obtained all rights, title and interest in and to the mortgage loan by [Monroy].  The assignment to [Heritage] included assignment of the original lender’s (WMC) tort claim.  The assignment of tort claims is implied in the language of the loan sell agreement to [Heritage] including but not limited to language such as ‘Seller does hereby sell, assign and convey to Buyer, its successors and assigns, all right, title and interest in the loan.’  The loan sell agreement also provided that ‘the Seller transfers assign, set-over, quitclaim and convey to Buyer all right, title and interest of the Seller in the mortgage loan.’ ” 

The SAC also added the following language:  “The assignment of the tort claim is also implied by conduct of the parties in the secondary mortgage market as it is custom and practice in the mortgage industry to assign any and all rights and interests including any right to tort claim against the borrower when selling mortgage loan.  [Heritage] alleges that based on the conduct of the parties and the language included in the buy sell agreement of the loan, and the custom and practice of lenders such as WMC, the assignment of [Monroy’s] loan by WMC included assignment of any and all tort claims.”  The SAC also asserted that the language of the loan application signed by Monroy implied the assignment of tort claims.

Monroy demurred to the SAC, and Heritage attached a declaration of Diane Taylor, a representative for WMC Mortgage, LLC, to its “sur-reply in support” of its opposition to Monroy’s demurrer.  Taylor’s declaration dated August 4, 2011, stated:  “As Assistant Secretary, I am authorized to speak on behalf of WMC Mortgage, LLC, successor to WMC . . . .”  She stated that WMC relied on the information provided by the borrower applying for a loan to determine the borrower’s “eligibility for the products offered.”  She stated:  “When WMC sold its mortgage loans to third parties, WMC assigned all of its legal rights (in tort as well as contract), as the originating lender, to the buyer—including, but not limited to, the right to recover against a borrower for fraud.”  (Underline omitted.) 

On August 15, 2011, the trial court filed its order sustaining without leave to amend Monroy’s demurrer to Heritage’s SAC.  The court explained:  “Despite being afforded an opportunity to amend, [Heritage] has still failed to adequately allege an assignment of the original lender’s tort claims, as distinct from an assignment of the original lender’s contractual rights under the subject promissory note.  [Citation.]  [Heritage] has not attached to its complaint a written assignment agreement . . . , and [Heritage] has not adequately alleged the formation of an oral assignment agreement.” 

The trial court stated that there was an independent ground for sustaining the demurrer without leave to amend.  The SAC stated that the promissory note was assigned after foreclosure of the first deed of trust and the corresponding extinguishment of the second deed of trust securing the promissory note.  The court found that “there was no underlying property interest supporting an incidental assignment of the original lender’s fraud claims.” 

On November 18, 2011, Monroy filed a motion for summary judgment or summary adjudication on her cross-complaint.  Monroy asserted that Heritage was involved in the business practice of filing invalid fraud claims to avoid California’s antideficiency laws in order to collect on nonrecourse debts or convert them into recourse default judgments.  With regard to the claim of violating the FDCPA, Monroy alleged that Heritage was a debt collector and was engaged in a deceptive debt collections practice within the meaning of title 15, United States Code sections1692d, 1692e, and 1692f.  Monroy cited the letter Heritage sent her after it had filed the lawsuit against her.  Monroy also asserted that Heritage had violated provisions of the Rosenthal Act under Civil Code sections 1788.17 and 1788.13, subdivision (k).  Monroy claimed that she was entitled to $1,000 for Heritage’s violation of the FDCPA and $1,000 for Heritage’s violation of the Rosenthal Act. 

Heritage opposed the motion for summary judgment and also requested a continuance to conduct additional discovery.  In its opposition to Monroy’s motion for summary judgment, Heritage agreed that it was a debt collector but disputed the contention that the FDCPA applied.  Heritage argued that the FDCPA did not apply because Monroy bought the Richmond property for her son and also purchased a home in Manteca.  It also disputed the allegation that it engaged in deceptive debt collections practices within the meaning of the FDCPA or that it violated the Rosenthal Act. 

On February 21, 2012, the trial court issued its order granting in part and denying in part Monroy’s motion for summary adjudication on her cross-complaint.  The court granted Monroy’s motion as to her claim that Heritage violated the FDCPA.  The court found that Heritage’s conduct in threatening Monroy with the prosecution of legal claims that had no merit violated the FDCPA.  The court noted that Heritage had made a binding judicial admission that it received the assignment of Monroy’s note after the foreclosure of the first deed of trust, and that event extinguished the second deed of trust securing Monroy’s note.  The court advised that it could not grant summary adjudication on her cause of action for monetary damages because the issue of the amount of damages remained unresolved; it thus awarded statutory damages in the nominal amount of one dollar.  The court added:  “If Monroy insists on receiving a greater amount, then summary adjudication must be denied and the matter must proceed to trial.” 

The trial court denied Monroy’s summary adjudication motion with regard to her claim that Heritage violated the Rosenthal Act.  The court concluded there was a triable issue of fact as to Heritage’s statutory “unclean hands” defense.  The court also sustained a number of Heritage’s objections to the declaration of Monroy’s counsel. 

The trial court denied Heritage’s request for a continuance to conduct additional discovery.  Heritage’s four discovery motions were set for a hearing 10 days after the scheduled trial date and thus the court found that Heritage’s discovery requests were untimely.  Further, the court found that there was no good cause for granting a continuance. 

On March 12, 2012, the trial court filed its entry of judgment in favor of Monroy and against Heritage and awarded Monroy nominal statutory damages of one dollar on her cross-complaint, the maximum sum she could receive without a trial on her FDCPA claim.  The order stated that Monroy was the “prevailing party.” 

Heritage filed a timely notice of appeal.

On March 23, 2012, Monroy filed a memorandum of costs.  On May 10, 2012, Monroy filed her motion for attorney fees and costs under title 15 of the United States Code section 1692k(a)(3).  Heritage filed its memorandum in opposition on June 6, 2012. 

The trial court held a hearing on Monroy’s fee motion on June 19, 2012.  At the conclusion of the hearing, the court stated it was granting Monroy’s motion.  The court explained:  “As the judge in this case, I did go over the billings and I didn’t see anything that I could say was unreasonable for hours spent on certain tasks.  And I felt the hourly rate was within the acceptable parameters for Bay Area attorneys.”

On July 10, 2012, the court filed its order granting Monroy’s motion for an award of attorney fees and expenses.  The order stated that Monroy was the prevailing party and entitled “to the full amount of her attorney’s fees relating to the FDCPA claim as well as to Heritage’s complaint.”  The court added:  “The issues are synonymous and interrelated and cannot reasonably be separated.”  The court concluded that counsel’s hourly fee rate of $450 was “within acceptable parameters for attorneys of [counsel’s] skill and experience practicing” in the San Francisco Bay area, and that the time spent was 194.5 hours.  The court denied the enhancement requested.  The court awarded fees in the amount of $87,525 ($450 x 194.5).  The court awarded litigation expenses in the amount of $1,964.60.  

On this same date, July 10, 2102, the trial court entered an amended judgment, stating that it had sustained with prejudice Monroy’s demurrer to Heritage’s SAC, and had granted Monroy’s motion for summary adjudication on her claim in her cross-complaint for violations of the FDCPA.  The court repeated that Monroy shall take statutory damages of one dollar on her cross-complaint, the maximum she could receive without a trial.  The court stated that Monroy was the prevailing party and awarded her $89,489.60 for attorney fees and litigation costs and expenses ($87,525 + $1,964.60).  Thus, the total judgment in favor of Monroy and against Heritage was $89,490.60 ($89,489.60 + $1.00 in damages). 

Heritage filed a timely notice of appeal from the order awarding attorney fees.  This court on its own motion consolidated both of Heritage’s appeals.

On November 8, 2012, Monroy filed a request for judicial notice of an order in a class certification lawsuit against Heritage and of Heritage’s requests for default judgments against other plaintiffs in a different lawsuit.  Heritage opposed the request and argued that Monroy is asking this court to take judicial notice of facts in documents and these facts may not be true.  On December 5, 2012, we issued an order that the opposed request for judicial notice would be decided with the merits of the appeal.

“ ‘Taking judicialnotice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.’  [Citation.]  While courts take judicialnotice of public records, they do not take notice of the truth of matters stated therein.  [Citation.]  ‘When judicialnotice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.’  [Citation.]”  (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)  Accordingly, we take judicial notice of the existence of these court documents (Evid. Code, §§ 452, subd. (d), 459, subd. (a)), but do not take notice of the disputed facts in the documents.

DISCUSSION

I.  The Demurrer against Heritage’s SAC

A.  The Standard of Review, The Pleading Requirements for Alleging Fraud, and the

      Burden of Proof When Alleging an Assignment

The trial court sustained Monroy’s demurrer against Heritage’s SAC without leave to amend.  The standard of review governing an appeal from the judgment after the trial court sustains a demurrer without leave to amend is well established.  “ ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.  [Citation.]  We also consider matters which may be judicially noticed.’  [Citation.]  Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.  [Citation.]  When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action.  [Citation.]  And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment:  if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm.  [Citations.]  The burden of proving such reasonable possibility is squarely on the plaintiff.”  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Here, Heritage alleged that it had a right to pursue misrepresentations Monroy made in her loan application to WMC based on a claim that WMC assigned its torts claims against Monroy to it.  “The burden of proving an assignment falls upon the party asserting rights thereunder [citations].”  (Cockerell v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284, 292.)  An assignment agreement “must describe the subject matter of the assignment with sufficient particularity to identify the rights assigned.”  (Mission Valley East, Inc. v. County of Kern (1981) 120 Cal.App.3d 89, 97.)  An assignment is “a manifestation to another person by the owner of the right indicating his [or her] intention to transfer, without further action or manifestation of intention, the right to such other person, or to a third person.”  (Cockerel, at p. 291.)  As with contracts generally, the nature of an assignment is determined by ascertaining the intent of the parties.  (Cambridge Co. v. City of Elsinore (1922) 57 Cal.App. 245.) 

Furthermore, the policy of liberal construction of the pleadings does not apply to fraud causes of action.  “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.”  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)  This requirement serves two purposes.  First, it gives the defendant notice of the definite charges to be met.  Second, the allegations “should be sufficiently specific that the court can weed out nonmeritorious actions on the basis of the pleadings.  Thus the pleading should be sufficient ‘ “to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.’  ”  (Committee on Children’s Television, Inc. v. General Goods Corp. (1983) 35 Cal.3d 197, 216-217, superseded by statute on another issue.) 

B.  The Adequacy of the Fraud Allegations

Heritage argues that it adequately alleged that WMC assigned its fraud claims against Monroy to it.  The trial court’s insistence that it had to attach a document establishing the assignment shows, according to Heritage, that the court improperly considered the sufficiency of the evidence when ruling on the demurrer.  For the reasons discussed below, we disagree with Heritage’s contention.

Heritage cites various allegations in its SAC where it asserted in a conclusory fashion that WMC assigned to Heritage its tort claims when WMC transferred to Heritage its rights under Monroy’s promissory note.  In particular it cites its allegations that WMC “sold the loan and assigned any and all rights WMC may have including but not limited to any right to fraud claim” against Monroy.  It further alleged that this assignment was “evidenced by signature and stamp of the secretary of WMC” on the last page of the note.  Heritage set forth in its SAC that as the assignee of WMC, Heritage “obtained all rights, title and interest in and to the mortgage loan by defendant[,]” including WMC’s tort claim.  Heritage claimed that the assignment of tort claims was implied by the following language in the agreement between Heritage and WMC:  “ ‘Seller does hereby sell, assign and convey to Buyer, its successors and assigns, all right, title and interest in the loan.’  The loan sell agreement also provided that ‘the Seller transfers assign, set-over, quitclaim and convey to Buyer all rights, title and interest of the Seller in the mortgage loan.’ ” The SAC added that WMC acknowledged on May 9, 2011, that it assigned to Heritage its tort claims. 

Heritage contends that its SAC also alleged assignment of the tort claims based on implied conduct of the parties, as follows:  “The assignment of the tort claim is also implied by conduct of the parties in the secondary mortgage market as it is custom and practice in the mortgage industry to assign any and all rights and interests including any right to tort claim against the borrower when selling mortgage loan.  [Heritage] alleges that based on the conduct of the parties and the language included in the buy sell agreement of the loan, and the custom and practice of lenders such as WMC, the assignment of [Monroy’s] loan by WMC included assignment of any and all tort claims.” 

Heritage also maintains that the language in Monroy’s loan implied an assignment, as Monroy acknowledged the following:  “ ‘Each of the undersigned specifically represents to Lender and to lender’s actual or potential agents, brokers, processors, attorneys, insurers, servicers, successors and assigns and agrees and acknowledges that:  (1) the information provided in this application is true and correct as of the date set forth opposite my signature and that any intentional or negligent misrepresentation of this information contained in this application may result in civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation that I have made on this application. . . .  (6)  The Lender, its servicers, successors or assigns may rely on this information contained in the application. . . .’ ”  (Bold omitted.) 

Heritage insists that the foregoing language and the attached document, which was the written indorsement containing the signature and stamp of the secretary of WMC on the last page of the promissory note, were sufficient, and the trial court should have overruled Monroy’s demurrer.

We agree that the allegations in Heritage’s SAC and the attached indorsement showed an assignment of Monroy’s promissory note.  However, the assignment of this contract right did not carry with it a transfer of WMC’s tort rights.  While no particular form of assignment is required, it is essential to the assignment of a right that the assignor manifests an intention to transfer “the right.”  (Sunburst Bank v. Executive Life Ins. Co., supra, 24 Cal.App.4th at p. 1164.)

An assignment of a right generally carries with it an assignment of other rights incident thereto.  (Civ. Code, § 1084.)  The fraud claims based on Monroy’s loan application with WMC are not “incidental to” the transfer of the promissory note to Heritage.  “A suit for fraud obviously does not involve an attempt to recover on a debt or note.”  (Guild Mortgage Co. v. Heller (1987) 193 Cal.App.3d 1505, 1512; see also Millner v. Lankershim Packing Co. (1936) 13 Cal.App.2d 315, 319-320 [assignment of mortgage did not include assignment of right to recover for injury to the mortgaged property]; Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 956-957 [divorce agreement awarding diamond ring purchased by husband to wife did not automatically transfer husband’s claim against jeweler for fraud].)  For example, in Williams v. Galloway (1962) 211 Cal.App.2d 302, the corporation’s sale and transfer to a second corporation “ ‘[a]ll personal property’ ” and all “ ‘property held on a leas[e]hold basis’ ” did not transfer a claim for money the first corporation had against its former lessor.  (Id. at pp. 304-305.)

In the present case, the indorsement and allegations established that WMC assigned the second promissory note to Heritage.  The transfer of the promissory note provided Heritage with contract rights.  Fraud rights are not, as a matter of law, incidental to the transfer of the promissory note.[1]

It is true that incidental rights may include certain ancillary causes of action but the assignment agreement “must describe the subject matter of the assignment with sufficient particularity to identify the rights assigned.”  (Mission Valley East, Inc. v. County of Kern, supra, 120 Cal.App.3d at p. 97.)  “[A] basic tenet of California contract law dictates that when a particular right or set of rights is defined in an assignment, additional rights not similarly defined or named cannot be considered part of the rights transferred.”  (DC3 Entertainment, LLC v. John Galt Entertainment, Inc. (W.D. Wash. 2006) 412 F.Supp.2d 1125, 1144.)

Here, none of the allegations regarding assignment in the SAC specified that the assignment was transferring the ancillary right of a tort claim.  The document attached by Heritage did not support any claim of an assignment by WMC to Heritage of its fraud claims against Monroy.  This document was the promissory note signed by Monroy, which, on the last page, contained the signature and stamp of the secretary of WMC.  Directly under “Pay to the order of” was Heritage’s stamp.  The transfer of the promissory note by indorsement did not show a clear intent to assign WMC’s fraud claim.  (See Comm. Code, § 3201 et seq.)  The conveyance of the promissory note to Heritage does not establish that WMC assigned to Heritage its right to the performance of other, distinct obligations owed by Monroy, such as the obligation to provide truthful information.  (See Cambridge Co. v. City of Elsinore, supra, 57 Cal.App. at pp. 249-250.)

Additionally, the allegations did not show an assignment of the tort claims based on custom and practice.  “While no particular form of assignment is necessary, the assignment, to be effectual, must be a manifestation to another person by the owner of the right indicating his intention to transfer, without further action or manifestation of intention, the right to such other person, or to a third person.  [Citation.]”  (Cockerell v. Title Ins. & Trust Co., supra, 42 Cal.2d at p. 291.)  The parties’ intention is determined by considering their words and acts as well as the subject matter of the contract.  (Lumsden v. Roth (1955) 138 Cal.App.2d 172, 175.)  The assignment agreement in the present case is completely silent regarding any tort claim and nothing in the agreement suggests that the assignment included any rights other than those rights incidental to the contract rights.  Heritage cannot allege general custom and practice to expand the assignment agreement to include ancillary rights not specified.

Heritage claims that the decision in National Reserve Co. v. Metropolitan Trust Co. (1941) 17 Cal.2d 827, 833 (National Reserve) supports its position that WMC’s tort claims were assigned with the transfer of the note.  Our Supreme Court in National Reserve stated that an unqualified assignment of a contract vests in the assignee “all rights and remedies incidental thereto.”  (Id. at p. 833.)  Heritage then proceeds to cite portions of the following quote:  “If . . . an accrued cause of action cannot be asserted apart from the contract out of which it arises or is essential to a complete and adequate enforcement of the contract, it passes with an assignment of the contract as an incident thereof.  Thus, the assignment of a contract passes from assignor to assignee an accrued cause of action for rescission [citations], and a creditor’s assignee acquires the right to set aside a prior fraudulent conveyance by the debtor.  [Citations.]  As a corollary, if an assignor by express provision of a contract is denied the right to assert an accrued cause of action after he has assigned away his interest in the contract, the right to sue passes to his assignee.  There would otherwise be no one to enforce the right.”  (Ibid.

Heritage ignores the language in National Reserve, supra, 17 Cal.2d 827, which directly preceded the paragraph it quotes from the decision.  In the preceding paragraph, the Supreme Court noted that incidental rights may “include certain ancillary causes of action arising out of the subject of the assignment and accruing before the assignment is made.”  (Id. at p. 833.)  However,  “[u]nless an assignment specifically or impliedly designates them, accrued causes of action arising out of an assigned contract, whether ex contractu or ex delicto, do not pass under the assignment as incidental to the contract if they can be asserted by the assignor independently of his continued ownership of the contract and are not essential to a continued enforcement of the contract.”  (Ibid.)

Applying the legal principles set forth in National Reserve to the present case, Heritage has failed to state a claim for a cause of action for fraud based on Monroy’s loan application.  Neither the indorsement nor the other allegations in the SAC authorize the assignment, specifically or impliedly, of WMC’s tort claims.  As already stressed, fraud is an ancillary cause of action to the promissory note.

Heritage maintains that it did not have to allege details and could simply allege a clear statement of the ultimate facts necessary to the cause of action.  (See Lyon v. Master Holding Corp. (1942) 50 Cal.App.2d 238, 241.)  Heritage claims that it was sufficient for it to plead the ultimate fact of ownership of the property at the time it filed this action and cites a 1924 case, Commercial Credit Co. v. Peak (1924) 195 Cal. 27, 32-33.  This case does not help Heritage.  Commercial Credit involved recovering the value of personal property or chattel.  (Id. at p. 29.)  This case did not involve a promissory note; it did not involve a claim based on the assignment of a tort; nor did it involve claims based on fraud.  Thus, Commercial Credit has no application to the present case.  Heritage ignores that every element of a fraud cause of action must be pleaded specifically.

Finally, Heritage complains that the trial court was assessing the veracity of the allegations in the SAC, and cites the court’s order instructing it to attach a writing to show an assignment as proof that the court improperly assessed the weight of the evidence.  We disagree with Heritage’s conclusion. 

“A written contract may be pleaded either by its terms––set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference––or by its legal effect.  [Citation.]  In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms.  This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’  [Citation.]”  (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)  Since the allegations in Heritage’s pleadings did not set forth with specificity any assignment of the tort claims, the trial court properly instructed Heritage to attach the written agreement that evinced an intent to assign the tort claims.

Accordingly, we conclude that the trial court did not err when it found that Heritage failed to state causes of action for fraud based on assignment.[2]

C. Denying Heritage Leave to Amend its SAC

              Heritage contends that the trial court abused its discretion when it did not permit it to amend its SAC.

The court abuses its discretion in sustaining the demurrer without leave to amend if the plaintiff can show a reasonable possibility of curing the defect in the complaint by amendment.  (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)  Heritage has the burden of proving that an amendment would cure the defect.  (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) 

In support of its argument that it should have been permitted to amend its pleading a third time, Heritage argues that its SAC was sufficient and that it could have amended the pleading to indicate that WMC intended to transfer its tort rights to Heritage.  In the trial court, Heritage attached a declaration of Taylor, a representative for WMC Mortgage, LLC.  Taylor’s declaration dated August 24, 2011, stated:  “As Assistant Secretary, I am authorized to speak on behalf of WMC Mortgage, LLC, successor to WMC . . . .”  She confirmed that WMC relied on the information provided by the borrower applying for a loan to determine the borrower’s “eligibility for the products offered.”  She declared:  “When WMC sold its mortgage loans to third parties, WMC assigned all of its legal rights (in tort as well as contract), as the originating lender, to the buyer—including, but not limited to, the right to recover against a borrower for fraud.”  (Underline omitted.) 

Taylor’s declaration on August 24, 2011, more than two years after Heritage acquired Monroy’s unpaid note as part of a “larger pool of loans,” does not shed any light on the parties’ intent at the time of the assignment.  The assignment agreement contains absolutely no language indicating that WMC intended to transfer any rights ancillary to the right to collect on the promissory note.  Contract “rights” do not exist as disembodied abstractions apart from a contract that created them.  More precisely, in California, “the intention of the parties as expressed in the contract is the source of contractual rights and duties.”  (Pacific Gas & E.Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 38.)  Thus, we assess the intent at the time the agreement is formed, not years later.

              The trial court provided Heritage with ample opportunity to cure the defect in its pleading; Heritage failed to demonstrate it could cure the defect.  The trial court thus did not abuse its discretion in sustaining the third demurrer against Heritage’s pleading without leave to amend.

II.  The Grant of Summary Adjudication on Monroy’s Cross-Complaint

A.  The Trial Court’s Ruling

              Monroy alleged violations of the Rosenthal Act and the FDCPA in her cross-complaint.  She claimed that Heritage violated the FDCPA by attempting to collect a debt not owed, by using unconscionable, false, deceptive, and/or misleading means to seek to collect a debt, and by threatening legal actions that could not be legally taken.

Monroy moved for summary adjudication on her claims and the trial court denied the motion as to her claim of violating the Rosenthal Act.  It granted her motion as to her claim that Heritage violated the FDCPA, and awarded Monroy damages in the amount of one dollar.  The court found that Heritage’s conduct in threatening Monroy with the prosecution of legal claims that had no merit violated the FDCPA.[3]

B.  Standard of Review

To prevail on a summaryadjudication motion, a cross-complainant must prove “each element of the cause of action entitling the party to judgment on that cause of action. . . .”  (Code Civ. Proc., § 437c, subd. (p)(1).)  Only if the cross-complainant satisfies this burden will the burden shift to the cross-defendant “to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.”  (Ibid.)  The cross-defendant “may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto.”  (Ibid.)

“In reviewing whether these burdens have been met, we strictly scrutinize the moving party’s papers and construe all facts and resolve all doubts in favor of the party opposing the motion.  [Citations.]”  (Innovative Business Partnerships, Inc. v. Inland Counties Regional Center, Inc. (2011) 194 Cal.App.4th 623, 628.)  On appeal, the trial court’s ruling is examined under a de novo standard of review.  (Brinton v. Bankers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 555.)

C.  TheFDCPA

              The purpose of the FDCPA is “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.”  (15 U.S.C. § 1692(e).)  “A basic tenet of the Act is that all consumers, even those who have mismanaged their financial affairs resulting in default on their debt, deserve ‘the right to be treated in a reasonable and civil manner.’ ”  (Bass v. Stopler, Koritzinsky, Brewster & Neider, S.C. (7th Cir. 1997) 111 F.3d 1322, 1324 (Bass).)  Since the FDCPA is a remedial statute, “it should be construed liberally in favor of the consumer.”  (See, e.g., Johnson v. Riddle (10th Cir. 2002) 305 F.3d 1107, 1117.) 

The word “ ‘creditor’ means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.”  (15 U.S.C. § 1692a(4).)  “The term ‘debt’ means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”  (15 U.S.C. § 1692a(5).)

              The FDCPA defines “ ‘debt collector’ ” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. . . .  [T]he term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. . . .”  (15 U.S.C. § 1692a(6).)

              Under the FDCPA, “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”  (15 U.S.C. § 1692e.)  A violation of this section includes “[t]he false representation of” “the character, amount, or legal status of any debt[.]”  (15 U.S.C. § 1692e(2)(A).)  A violation also includes “[t]he threat to take any action that cannot legally be taken . . . .”  (15 U.S.C. § 1692e(5).)  Additionally, a violation occurs if the debt collector uses “any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer” (15 U.S.C. § 1692e(10)) or makes “[t]he false representation or implication that accounts have been turned over to innocent purchasers for value” (15 U.S.C. § 1692e(12)).  

              State courts have concurrent jurisdiction over claims under the FDCPA.  (15 U.S.C. § 1692k(d).)  The FDCPA will not impose any liability “to any act done or omitted in good faith in conformity with any advisory opinion of the Bureau, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.”  (15 U.S.C. § 1692k(e).)

D.  Heritage Violated the FDCPA

              When alleging a claim under the FDCPA, a plaintiff must establish that (1) the plaintiff is a consumer, as defined by the FDCPA; (2) the debt arises out of a transaction primarily for personal, family or household purposes; (3) the defendant is a debt collector, as that phrase is defined by the FDCPA; and (4) the defendant violated a provision of the Act.  (15 U.S.C. § 1692e; Heintz v. Jenkins (1995) 514 U.S. 291, 294; Wallace v. Washington Mut. Bank, F.A. (6th Cir. 2012) 683 F.3d 323, 326.)

              Monroy’s claim was based on the collection letter dated May 25, 2010, sent to her by Heritage.  She received the letter on June 28, 2010, and it was attached to the summons and complaint against her.  The letter advised that Heritage had commenced a civil action against Monroy and admonished her that “any misinformation or misrepresentations provided in the [loan] application are a violation of federal law and may result in ‘civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation’ for which Heritage . . . currently seeks.”  The letter warned that if Heritage was unable to resolve the matter by the date Monroy’s answer was due, Heritage would “have no other option but to proceed with litigation against” her.  The letter declared that it was “from a debt collector” and was “an attempt to collect a debt.”  In the trial court, in Heritage’s separate statement of disputed facts in support of its opposition to Monroy’s motion for summary adjudication, Heritage admitted that it was a debt collector and that it was attempting to collect an alleged debt against Monroy. 

Thus, the undisputed facts established that Heritage was a debt collector and attempting to collect a debt from Monroy.  Monroy’s obligation was to pay for “personal, family, or household purposes” (15 U.S.C. § 1692a(5)), as this was a debt incurred to purchase a home in which, according to Monroy’s declaration, she intended to live.  There was evidence that a Manteca property was also purchased in Monroy’s name, but there is no evidence that she ever lived in that home or intended to live in that home.  Indeed, the unchallenged evidence was that Monroy was the victim of identity theft and that she did not know anything about the Manteca property.  Monroy stated that she lived at the Richmond property and Heritage presented no evidence that she resided at another location.

The evidence also supported a finding that the letter Heritage sent to Monroy violated the FDCPA.  The letter attached to the complaint and summons threatened Monroy with a lawsuit for any misinformation she provided on her loan application with WMC.  Heritage asserted that Monroy owed it the money for any fraud on her application because it was now the owner of the promissory note.  As discussed extensively above, Heritage’s claims based on fraud had no merit.  Thus, Heritage violated the FDCPA when it indicated in the letter that it had the right to sue Monroy for any misinformation submitted on the promissory note and when it attempted to induce her to settle with Heritage. 

Additionally, according to Ben Ganter, the director of client relations for Heritage, Heritage acquired Monroy’s unpaid note as part of a larger pool of loans that included both secured and unsecured mortgage loans.  He acknowledged that Heritage then “seeks to collect on the unpaid balances of the notes it purchased” and that “Heritage’s business model is collecting on the loans it purchases.”  Heritage purchased Monroy’s junior loan without any knowledge about the accuracy of the loan application.  Before Heritage discovered the alleged fraud, it sent Monroy letters telling her that she was obligated to pay Heritage “for the unpaid balance of the note . . . .”  According to Ganter, a third notice of Monroy’s obligation to pay [Heritage] for the unpaid balance on the Note was sent via postal mail in December of 2009.  These notices clearly violated the FDCPA because, as the trial court found, Heritage had made a binding judicial admission that it received the assignment of Monroy’s note after the foreclosure of the first deed of trust, and that event extinguished the second deed of trust securing Monroy’s note under the antideficiency statutes (see Code Civ. Proc., § 580b).

              Heritage complains that Monroy alleged that the complaint sent to her attached to the letter violated the FDCPA and a legal action is not a communication covered by the FDCPA.  We need not address this argument because Monroy’s claim was not based on a communication under the FDCPA, but based on the debt collector’s using “false, deceptive, or misleading representation or means in connection with the collection of any debt.”  (15 U.S.C. § 1692e.) 

              Heritage also argues that “debt,” as defined by the FDCPA, does not include tort claims.  As already noted, Heritage also violated the FDCPA when it sent a notice demanding payment on the money owed on the promissory note when that debt had been extinguished under the antideficiency statutes.  Furthermore, we disagree with Heritage’s argument that tort claims are never debts under the FDCPA.

In support of its argument that a “debt” does not include a tort claim, Heritage cites various cases that have held that any obligation to pay damages arising from a tort claim, court judgment, or criminal activity does not constitute a debt under the FDCPA.  (See, e.g., Fleming v. Pickard (9th Cir. 2009) 581 F.3d 922, 925-926 [cause of action for tortious conversion is not a debt under the FDCPA]; Turner v. Cook (9th Cir. 2004) 362 F.3d 1219, 1227 [tort judgment resulting from business-related conduct not a debt under the FDCPA because “ ‘when we speak of ‘transactions,’ we refer to consensual or contractual arrangements, not damage obligations thrust upon one as a result of no more than her own negligence’ ”]; Hawthorne v. Mac Adjustment, Inc. (11th Cir. 1998) 140 F.3d 1367, 1371 [holding that the obligation to pay arose from a tort, and not from a consumer transaction, and therefore was not a debt under the FDCPA]; Zimmerman v. HBO Affiliate Group (3d Cir. 1987) 834 F.2d 1163, 1167-1169.) 

In the cases cited by Heritage, the obligations to pay were created by something other than a consumer transaction and were not consensual.  (See, e.g., Fleming v. Pickard, supra, 581 F.3d at p. 925 [“ ‘at a minimum, a “transaction” under the FDCPA must involve some kind of business dealing or other consensual obligation’ ”].)  Thus, we agree that courts have consistently excluded tort obligations or criminal activity from the FDCPA’s definition of “debt” when the tort obligations do not arise out of a consensual transaction.  In Zimmerman v. HBO Affiliate Group, supra, 834 F.2d 1163, for example, the Third Circuit held that the FDCPA did not apply to attempts by cable television companies to collect money from people who allegedly had stolen cable television signals by installing illegal antennas.  (Zimmerman, at pp. 1167-1169.)  There was no FDCPA “debt” in Zimmerman because the obligations arose out of a theft rather than a transaction.  Neither the complaint nor the demand letter included any assertion of an offer of extension of credit and therefore no transaction had occurred.  (Zimmerman,at pp. 1167-1169.)

As already stressed, a debt or obligation under the FDCPA must be based on a consumer consensual or contractual arrangement, not a damage obligation.  (See, e.g., Hawthorne v. Mac Adjustment, Inc., supra, 140 F.3d at p. 1372).  Unlike the cases upon which Heritage relies, the present case is not a situation in which Monroy never had a contractual arrangement of any kind with WMC.  Rather, Monroy’s alleged debt to Heritage arose out of her transaction with WMC to purchase the Richmond property.  The alleged fraud claims clearly arose out of a residential mortgage transaction and Heritage cannot avoid the application of the FDCPA simply because it alleged in its pleading that Monroy’s obligation to it was based on the misrepresentations she made on her loan application rather than on a breach of her obligations under the contract.

Heritage declares that the present case is similar to Turner v. Cook, supra, 362 F.3d 1219, but Turner is clearly distinguishable from the present case.  In Turner, the appellees obtained a judgment against Stephen Turner and “the judgment arose from allegations of various business interference torts” by Turner against the appellees.  (Id. at pp. 1222-1223.)  Subsequently, the appellees filed a claim that Turner fraudulently conveyed his real and personal property to prevent the appellees from collecting on the judgment.  (Id. at p. 1223.)  Turner claimed that the appellees violated the FDCPA when attempting to collect the judgment.  (Turner, at pp. 1223-1224.)  When rejecting the claim under FDCPA, the Ninth Circuit held that a tort judgment is not a debt under the FDCPA.  (Turner, at p. 1227.)  Turner had admitted that the judgment was based on alleged business interference torts, not any consumer transaction, and it was immaterial that the fraudulent conveyance action involved Turner’s home.  (Id. at p. 1228.) 

 

In Turner v. Cook, supra, 362 F.3d 1219, the liability arose from tortious activity, not from a consensual transaction.  By contrast, here, Monroy and WMC entered into a consensual loan agreement for the purchase of a residential home.

Heritage argues that the present liability did not arise out of a consensual transaction because WMC did not consent to mortgage fraud.  Heritage maintains that the present transaction is the same as the theft of goods or services. 

Heritage’s argument is contrary to the court decisions that have held that there is no automatic fraud exception to the FDCPA. (See, e.g., F.T.C. v. Check Investors, Inc. (3d Cir. 2007) 502 F.3d 159, 170; Keele v. Wexler (7th Cir. 1998) 149 F.3d 589, 595.)  “ Absent an explicit showing that Congress intended a fraud exception to the Act, the wrong occasioned by debtor fraud is more appropriately redressed under the statutory and common law remedies already in place, not by a judicially-created exception that selectively gives a green light to the very abuses proscribed by the Act.’ ”  (F.T.C.,at p. 170.) 

The breadth of the phrase “any obligation or alleged obligation” is not limited to a particular set of obligations.  (Bass, supra, 111 F.3d at p. 1325.)  Thus, a replevin action, even though it is a tort claim, may be a debt under the FDCPA.  (Rawlinson v. Law Office of William M. Rudow, LLC (4th Cir.  2012) 460 Fed.Appx. 254, 257.)  “[A] court should look beyond the label of the debt collection practice to determine whether a ‘debt’ is being collected.”  (Ibid.)

Here, WMC and Monroy consented to the loan application.  The fraud action, even though it is a tort claim, arose from the consensual loan transaction, and thus it is a debt under the FDCPA.

E. No Defense to the Application of the FDCPA

              Heritage contends that it has a defense, as a matter of law, to the application of the FDCPA.  It claims that it relied on an advisory opinion by the Federal Trade Commission (FTC) that collecting on tort damages is not a debt for purposes of the FDCPA. 

              The FDCPA provides an affirmative defense for “ ‘any act done or omitted in good faith in conformity with any [FTC] advisory opinion’ . . . .”  (Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA (2010) 599 U.S. 573, ___ [130 S.Ct. 1605, 1607] (Jerman), quoting 15 U.S.C. § 1692k(e).)  However, “ignorance of the law will not excuse any person, either civilly or criminally.”  (Jerman, at p. ___ [p. 1611].) 

The “advisory opinion” relied upon by Heritage is a letter dated August 27, 1992, written to an attorney in Florida.[4]  The attorney wished to know if the claim for civil damages against an alleged shoplifting offender would be covered under the FDCPA.  The letter stated that these torts would not be debts as defined in the FDCPA and admonished that “[t]he views expressed herin represent an informal staff opinion.  As such, they are not binding on the [FTC]. . . .”

This letter is an “informal staff opinion” and not an advisory opinion.  Furthermore, the claim of damages arising from a theft, as was the subject of the FTC’s letter, is clearly distinguishable from the present case.  As already discussed, Heritage was not collecting on tort damages, but on a claim of fraud arising out of a loan contract. 

Courts held as early as 1998 that there is no automatic fraud exception to the FDCPA.  (Keele v. Wexler, supra, 149 F.3d at p. 595 [“neither the text nor underlying legislative history of the FDCPA lends itself to the recognition of a fraud exception”].)  Heritage’s ignorance of the law does not provide it with an affirmative defense to the application of the FDCPA.

F.  No Triable Issue of Fact

              Heritage argues that the trial court should not have granted the summary adjudication motion because there was a triable issue of fact as to whether the tort claims had been assigned.  It complains that the court refused to consider its evidence of assignment. 

              In support of this argument, Heritage cites Cadlerock Joint Venture, L.P. v. Lobel (2012) 206 Cal.App.4th 1531 (Cadlerock).  In Cadlerock, a single lender provided a borrower with two non-purchase money loans secured by two deeds of trust against the same real property, and then assigned the junior loan to a third party.  (Id. at p. 1536.)  The court held that the assignee of the junior loan was not precluded from seeking a deficiency judgment against the borrower after the senior loan was extinguished by a foreclosure sale of the property.  (Id. at pp. 1546-1547.)  The court stressed that the junior loan had been assigned prior to the foreclosure sale.  (Ibid.)  In Cadelrock, the antideficiency statute did not preclude the assignee of the junior loan from seeking a deficiency judgment after the extinguishment of the senior loan, held by a different entity, because there was no evidence that the lender created two loans “as an artifice to evade” Code of Civil Procedure section 580d.  (Cadlerock, at p. 1547.)

              Cadlerock has no applicability to the present case.  Unlike the situation in Cadlerock, Monroy’s loans were purchase money loans and the antideficiency statutes applied to both her senior and junior loans under Code of Civil Procedure section 580b.  Furthermore, the junior loan was assigned to Heritage after the foreclosure.  Critical to the holding in Cadlerock was the fact that the junior loan had been assigned prior to the trustee’s sale.  (Cadlerock, supra, 206 Cal.App.4th at pp. 1546-1547.)

              Here, the undisputed facts establish that Monroy’s loans were covered by the antideficiency statutes and that the junior loan was assigned to Heritage after the foreclosure on the senior loan.  Thus, there was no triable issue of fact that Heritage could seek payment for breach of the promissory note.  Furthermore, as already discussed, Heritage has failed to identify any evidence that raised a triable issue of material fact as to its argument that the assignment agreement included WMC’s potential tort claims against Monroy.  Accordingly, we conclude the trial court did not err in granting Monroy’s motion for summary adjudication on her claim that Heritage violated the FDCPA.

III.  Attorney Fees

A.  Fees Awarded and the Standard of Review

The trial court found that Monroy was the prevailing party and entitled to attorney fees under the FDCPA.  (15 U.S.C. § 1692k(a)(3).)  The court awarded Monroy attorney fees in the amount of $450 an hour for 194.5 hours for the lodestar amount of $87,525.  The court also awarded Monroy litigation expenses in the amount of 1,964.60. 

“Unless authorized by either statute or agreement, attorney’s fees ordinarily are not recoverable as costs.  [Citations.]”  (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127-128.)  The FDCPA provides for attorney fees to be awarded to the prevailing party.  (15 U.S.C. § 1692k(a)(3).)  “Courts have discretion in calculating reasonable attorney’s fees under this statute” (Jerman, supra, 599 U.S. at p. ___ [130 S.Ct. at p. 1621]), but the award of at least some modicum of attorney’s fees is mandatory under the FDCPA when the defendant is found to have violated the Act because “congress chose a ‘private attorney general’ approach to assume enforcement of the FDCPA” (Camacho v. Bridgeport Financial, Inc. (9th Cir. 2008) 523 F.3d 973, 978).

“ ‘On review of an award of attorneyfees after trial, the normal standard of review is abuse of discretion.  However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorneyfees . . . have been satisfied amounts to statutory construction and a question of law.’ ”  (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)

              Any challenge based on the amount of the fee awarded is reviewed for an abuse of discretion.  (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM Group) [“the trial court has broad authority to determine the amount of a reasonable fee”].)  An appellate court will interfere with the trial court’s determination of the amount of reasonable attorney fees only where there has been a manifest abuse of discretion.  (Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 228.)  “ ‘The “experienced trial judge is the best judge of the value of professional services rendered in [the] court, and while [the judge’s] judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong” ’—meaning that [the trial judge] abused [his or her] discretion.”  (PLCM Group, at p. 1095.)

              “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  ‘California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.’  [Citation.]  The reasonable hourly rate is that prevailing in the community for similar work.  [Citations.]  The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.  [Citation.]  Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary.  [Citation.]”  (PLCM Group, supra, 22 Cal.4th at p. 1095.)

B.  The Degree of Success

Heritage contends that the trial court did not apply the proper standard of law, and then argues that the attorney fee award was excessive because the trial court did not reduce the award on the basis that Monroy’s success was limited.  The decision whether to reduce an award because of a determination that the party enjoyed limited success is not reviewed de novo, as Heritage argues, but for an abuse of discretion. 

              The United States Supreme Court has held that the level of a party’s success is relevant to the amount of the fees to be awarded, and fees should not be awarded for the work on an unsuccessful claim.  (Hensley v. Eckerhart (1983) 461 U.S. 424, 434-435.)  The court in Hensley did not discuss the FDCPA, but addressed a nearly identical fee shifting statute applicable to civil rights litigation (42 U.S.C. § 1988).  The court recognized that “unrelated claims [may be] unlikely to arise with great frequency” because the case may present a single claim or the claims “will involve a common core of facts or will be based on related legal theories.  Much of counsel’s time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis.  Such a lawsuit cannot be viewed as a series of discrete claims.  Instead the district court should focus on the significance of the overall relief obtained” in relation to the hours reasonably expended on the litigation.  (Hensley, at p. 435.) 

“If . . . a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.  This will be true even where the plaintiff’s claims were interrelated, nonfrivolous, and raised in good faith. . . .  [T]he most critical factor is the degree of success obtained.”  (Hensley v. Eckerhart, supra, 461 U.S. at p. 436, italics added.)  To be compensable, an attorney’s time must be “reasonable in relation to the success achieved.”  (Ibid.)

Here, Heritage argues that Monroy’s attorney fees are unreasonably large in comparison to Monroy’s recovery of $1.00.  It also maintains that Monroy admitted at her deposition that she did not know what the case was about and, thus, according to Heritage, she had no stake in this action.  Heritage complains that the trial court failed to take into consideration the limited amount of success achieved and asserts that its violation of the FDCPA was only a technicality as Monroy could not show any damages.

In support of this argument, Heritage cites federal and California cases involving attorney fees in non-FDCPA cases.  (Farrar v. Hobby (1992) 506 U.S. 103; Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 989; Environmental Protection Information Center v. Department of Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 238; Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 249.)  These cases stress that the degree or extent of the plaintiff’s success must be considered when determining reasonable attorney fees.  For example, in Farrar, the plaintiff filed a lawsuit alleging a violation of his civil rights under title 42 of the United States Code section 1983 and demanded $17 million from six defendants and, after 10 years of litigation and two trips to the Court of Appeals, he received one dollar from one defendant.  (Farrar, at p. 107.)  The United States Supreme Court held that attorney fees should not be awarded because a technical vindication of one’s constitutional rights alone was not enough to justify an award of attorney fees under section 1988.  (Farrar, at p. 115.)  The award of only nominal damages highlighted the plaintiff’s failure to prove actual injury or any basis for awarding punitive damages.  (Ibid.) 

Courts have applied the reasoning of Farrar v. Hobby, supra, 506 U.S. 103 to FDCPA cases.  (See, e.g., Zagorski v. Midwest Billing Services, Inc. (7th Cir. 1997) 128 F.3d 1164, 1166 [remanding to the district court to determine reasonable attorney fees in a FDCPA case and instructing the court to use as a guide the methodology “traditionally employed in determining appropriate fees” under title 42 United States Code section 1988]; Johnson v. Eaton (5th Cir. 1996) 80 F.3d 148, 151 [plaintiff awarded no actual or statutory damages and the mere technical violation of the FDCPA was not sufficient to support an award of attorney fees]; Tolentino v. Friedman (7th Cir. 1995) 46 F.3d 645, 651.)  Although courts when awarding attorney fees in FDCPA cases have followed Farrar by considering limited or partial success, these same courts have generally been reluctant to reduce fee awards on the basis of a low monetary recovery since FDCPA statutory damages are capped at $1,000, and a $1,000 recovery doe not render a plaintiff’s success “limited.”  (See, e.g., Defenbaugh v. JBC & Associates, Inc. (N.D. Cal. Aug. 10, 2004, No. C-03-0651 JCS) 2004 WL 1874978.)  Congress created an incentive for attorneys to represent plaintiffs in FDCPA cases by providing for fee shifting, and a requirement of proportionality between attorney fees and damages would discourage attorneys from accepting representation of FDCPA plaintiffs; this would be inconsistent with the FDCPA’s statutory scheme.  (See, e.g., Phenow v. Johnson, Rodenberg & Lauinger, PLLP (D.Minn. 2011) 766 F.Supp.2d 955, 959.)  The fees should be adequate to attract competent counsel, but they should not be “so large that it is a windfall for attorneys––who should not be encouraged to grow fat off of lackluster cases, or pester the court with trifles in the hopes of capturing large attorneys’ fees from dubious claims.”  (Obenauf v. Frontier Financial Group, Inc. (D.N.M. 2011) 785 F.Supp.2d 1188, 1214.)

Here, Monroy alleged violations of the FDCPA and the Rosenthal Act and did not allege actual damages, but requested the maximum statutory damages of $1,000 under each statute for a total statutory award of $2,000.  Her sole complaint was that Heritage had engaged in an unlawful collections effort, which was evinced by the collection letters and the lawsuit against her.  Monroy was completely successful in establishing the unlawfulness of Heritage’s behavior.  Monroy agreed to a nominal damage award to avoid the costs of litigation, but she was still the prevailing party.  A plaintiff who wins a nominal amount of statutory damages has brought a “successful action” under the FDCPA.  (See Thornton v. Wolpoff & Abramson, LLP (11th Cir. 2008) 312 Fed.Appx. 161, 164.) 

Under the FDCPA, the court in awarding damages is to consider “the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional . . . .”  (15 U.S.C. § 1692k(b)(1).)  Here, the trial court recognized that Heritage wrote a number of letters to Monroy that violated the FDCPA.  The court considered that Monroy did not seek to add unnecessary legal fees by insisting on litigating the damages.  It also considered that she did not initiate the lawsuit against Heritage, but filed a counterclaim in response to Heritage’s attempts to force her to pay money that she did not owe. 

Lastly, while the award here was nominal, that is not necessarily controlling because “an award of nominal damages can represent a victory in the sense of vindicating rights even though no actual damages are proved.”  (Farrar v. Hobby, supra, 506 U.S. at p. 121, O’Connor, J., concurring.)  Success may be measured by “the significance of the legal issues on which the plaintiff prevailed and the public purpose the litigation served.”  (Morales v. City of San Rafael (9th Cir. 1996) 96 F.3d 359, 365.)  This lawsuit may spur Heritage to cease unlawful conduct against other consumers, which is an important consideration.

We thus conclude that the trial court did not abuse its discretion in not reducing the attorney fee award based on an argument that Monroy achieved limited success.

C.  The Number of Hours Expended

              Heritage objects to the amount of the fee charged by Peter B. Fredman, counsel for Monroy, and asserts that the calculation included hours for work not reasonably expended in pursuit of Monroy’s successful claim.  (See, e.g., Harman v. City and County of San Francisco (2007) 158 Cal.App.4th 407, 424 [appellate court determined trial court properly deleted hours spent on unsuccessful petition for rehearing of a prior appeal].)  Specifically, Heritage objects to the following:  2.4 hours spent by Fredman on March 25, 2011, for attending to a letter from Heritage that threatened Fredman with a libel suit; .06 of an hour spent on April 21 and 22, 2011, for drafting a declaration in support of a motion in a different superior court class action lawsuit where Heritage was a party; 9.6 hours for attending to matters regarding the class action case and/or conferring with class counsel; 7.9 hours for communicating with another attorney regarding a demurrer hearing;[5] .02 of an hour on May 31, 2011, for reviewing investigation material of a defendant in another case involving Heritage; .08 of an hour on July 25, 2011, for a conference with another person involving Heritage in Bankruptcy Court; and 3.2 hours for an appearance at a summary judgment hearing when Fredman missed the hearing but made an appearance later to deliver a proposed order.  Heritage claims that awarding fees for the foregoing, which equals 23.26 hours, was an abuse of discretion.

At the hearing on attorney fees, counsel for Heritage made a number of specific complaints about the reasonableness of the hours billed.  For example, Heritage argued that Fredman billed his client .6 hours for preparing a declaration for another action; Heritage also objected to billing for work allegedly done on other cases unrelated to the present action.  The trial court responded that it did not see “any of this in any of your papers.”  Counsel for Heritage answered that it was in its opposition.  The court commented that it would have to take another look, but instructed counsel to proceed with argument.  At the end of the hearing, the court affirmed its tentative ruling.  Heritage maintains that the court made its ruling without reviewing its papers as promised and therefore it clearly abused its discretion. 

              The record indicates that the trial court reasonably exercised its discretion in determining the number of hours spent on the lawsuit.  The trial court considered Heritage’s argument that the abovementioned charges were unreasonable.  The court listened to argument and obviously concluded that the argument by Heritage’s counsel lacked merit and that it was unnecessary to read through the opposition papers again to determine if each specific objection had actually been raised in Heritage’s opposition.

The trial court stated, “As the judge in this case, I did go over the billings and I didn’t see anything that I could say was unreasonable for hours spent on certain tasks.”  Thus, the court specifically stated that it found the hours worked by Monroy’s attorney to have been reasonably spent, and rejected Heritage’s argument that approximately 24 hours were unreasonably spent.  The trial court had a reasonable basis for making this determination in light of the detailed timekeeping records and supporting declarations provided by Fredman.  Heritage has failed to demonstrate that the court’s finding that these hours were reasonably expended in pursuit of Monroy’s claim exceed the bounds of reason.  (See, e.g., Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th 1242, 1250.) 

D.  The Reasonable Hourly Rate

Heritage contends that the hourly rate of $450, which the trial court awarded Fredman, was unreasonable.

In determining hourly rates, the court must look to the “prevailing market rates in the relevant community.”  (Bell v. Clackamas County (9th Cir. 2003) 341 F.3d 858, 868.)  The rates of comparable attorneys in the forum district are usually used.  (See Gates v. Deukmejian (9th Cir. 1992) 987 F.2d 1392, 1405.)  In making its calculation, the court should also consider the experience, skill, and reputation of the attorney requesting fees.  (Schwarz v. Secretary of Health & Human Services (9th Cir. 1995) 73 F.3d 895, 906.)  The court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate.  (Ingram v. Oroudjian (9th Cir. 2011) 647 F.3d 925, 928.)  “Affidavits of the plaintiffs’ attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market rate.”  (United Steelworkers of America v. Phelps Dodge Corp. (9th Cir. 1990) 896 F.2d 403, 407.) 

Here, Fredman declared that he had 15 years of experience and his “old” hourly rate was $450 per hour.  (He declared that his rate had increased to $500-$525 per hour.)  He noted that this rate had been approved for his work in a class action settlement in the superior courts and federal court.  He added that this hourly rate did not include a contingency risk.  Fredman also attached the declaration of Attorney Richard Pearl.  Pearl summarized the hourly rates charged by various law firms for comparable services.  According to his analysis, fees awarded in class actions cases in 2012, for 12-15 years of experience, varied from $455 to $610 per hour. 

The trial court concluded that counsel’s hourly fee rate of $450 was “within acceptable parameters for attorneys of counsel’s skill and experience practice in the San Francisco Bay area” and it denied the enhancement Fredman requested.  The court added:  “Whether it’s this kind of case or any other kind of case, I know that is a fee that is charged in the community.  I can’t say that it’s unreasonable.”

Heritage claims that the trial court abused its discretion in accepting the hourly rate of $450 because it did not consider similar work in the community that was equally complex.  It argues that the attorney fees discussed by Pearl in his declaration were not applicable because they were class action cases and more complex than the present case.  Heritage also distinguishes the cases cited by Fredman where the courts awarded him his hourly rate of $450 as being complex class action cases that did not allege a violation of the FDCPA.  Heritage cites a 2007 federal case where the billing rate in a FDCPA case was reduced to $250.  (Navarro v. Eskanos & Adler (N.D. Cal. Nov. 26, 2007, No. C 02-03430 WHA) 2007 WL 4200171 (Navarro), vacated by Navarro v. Eskanos & Adler (N.D. Cal. Dec. 11, 2007, No. C 06-2231 WHA) 2007 WL 448306.)

We do not find Heritage’s argument to be persuasive.  The attorney fees awarded in Navarro, a 2007 federal case where the legal work was completed in 2006, have little relevance to the hourly rate of fees for legal work done in 2010 through 2012.  Monroy’s counsel submitted evidence supporting his hourly rate and Heritage did not submit evidence of current rates contradicting this rate.  Accordingly, we conclude that the trial court did not abuse its discretion when it used the hourly rate of $450.

E.  Block Billing

Heritage asserts that the trial court should have reduced the amount of the attorney fees requested because Fredman used block billing.  In support of this argument, Heritage states that Fredman submitted records demonstrating that he billed 182.6 hours in this litigation.  Heritage fails to provide any citation to the record to support this statement. 

Heritage complains in a conclusory fashion that Fredman assigned a block of time to multiple tasks rather than itemizing the time spent on each task.  It asserts that the use of block billing makes it impossible to discern the amount of time spent on each task.  In support of this argument, Heritage relies on Bell v. Vista United School Dist. (2000) 82 Cal.App.4th 672.[6]  In Bell, the court reversed an attorney fee award because the block billing made it impossible for the court to apportion the fees between a cause of action alleging a Brown Act violation for which statutory fees are allowed and other causes of action.  (Id. at p. 689.)  Brown does not suggest that block billing is never appropriate.

Trial courts retain discretion to penalize block billing when the practice prevents them from discerning which tasks are compensable and which are not.  (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1324-1325; Bell v. Vista Unified School Dist., supra, 82 Cal.App.4th at p. 689.)  The trial court identified no such problem here, and Heritage has completely failed to show that block billing occurred or that 182.6 hours billed for litigation was unreasonable.

F.  Apportionment

              Heritage argues that the trial court erred when it awarded attorney fees associated with the litigation in defense of the tort claims against Monroy because no statute or contract provided for fees in defense of these claims.  In a separate argument, it asserts that the court should also have separated the fees associated with Monroy’s unsuccessful claim of a violation of the Rosenthal Act. 

In attacking the fees awarded, Heritage in its opening brief does not even mention the trial court’s ruling that the issues raised by Heritage’s complaint and Monroy’s counter claims for violating the Rosenthal Act and the FDCPA “are synonymous and interrelated and cannot reasonably be separated.”  Noticeably absent from Heritage’s briefs in this court is any discussion of the substantial authority supporting a trial court’s decision not to apportion fees when all of the claims are interrelated.

“When a cause of action for which attorneyfees are provided by statute is joined with other causes of action for which attorneyfees are not permitted, the prevailing party may recover only on the statutory cause of action.  However, the joinder of causes of action should not dilute the right to attorneyfees.  Such fees need not be apportioned when incurred for representation of an issue common to both a cause of action for which fees are permitted and one for which they are not.  All expenses incurred on the common issues qualify for an award.”  (Akins v. Enterprise Rent-A-Car Co. of San Francisco (2000) 79 Cal.App.4th 1127, 1133 see also Liton Gen. Engineering Contractor, Inc. v. United Pacific Insurance (1993) 16 Cal.App.4th 577, 588.) 

The record supports the trial court’s conclusion that Heritage’s fraud claims based on WMC’s assignment of the promissory note and Monroy’s counter claims that Heritage violated the Rosenthal Act and FDCPA were interrelated.  The facts and issues related to Heritage’s claims and Monroy’s counter claims were almost identical, as they both related to the question whether Heritage had a legal right to collect money from Monroy.  We agree with the trial court’s finding that Heritage’s causes of action were closely interrelated with Monroy’s counter claims. 

We conclude that nothing in the record indicates that the trial judge, who presided over the entire case, abused her discretion in calculating the award of attorney fees.

DISPOSITION

              The judgment and the order awarding attorney fees are affirmed.  Heritage is to pay the costs of both appeals.

                                                                                                  _________________________

                                                                                                  Lambden, J.

 

 

We concur:

 

 

_________________________

Kline, P.J.

 

 

_________________________

Richman, J.

39

 


[1]  The antideficiency statutes bar any breach of contract claim by Heritage against Monroy.

[2]  Monroy also argues that the antideficiency statutes barred Heritage’s claims and that the fraud claim could not be assigned.  Heritage argues, among other things, that the antideficiency statutes do not preclude an action against a borrower for fraud in the inducement of a loan.  (See, e.g., Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1237-1238; see Code of Civ. Proc., § 726, subd. (f)).

The trial court did set forth a second, independent basis for its ruling.  Since the promissory note was assigned after foreclosure of the first deed of trust, the trial court stated that the second deed of trust securing the promissory note had been extinguished and “there was no underlying property interest supporting an incidental assignment of the original lender’s fraud claims.”  We need not address this independent ground for sustaining the demurrer without leave to amend.

[3]  Heritage has forfeited any argument that the trial court should have granted its request for a continuance to permit it to conduct additional discovery because it did not raise this argument in its opening brief.  (See, e.g., People v. Stanley (1995) 10 Cal.4th 764, 793 [if no legal argument with citation to authority “ ‘is furnished on a particular point, the court may treat it as waived, and pass it without consideration’ ”].)

[4]  We note that Heritage does not even make any particular citation to the “advisory opinion” but simply asserts that “[t]he FTC issued an advisory opinion stating that collecting on tort damages is not a debt for purposes of the FDCPA in a letter to James R. Palmer.”

[5]  This attorney specially appeared on behalf of Monroy at the third demurrer hearing on August 9, 2011, because Fredman was on vacation in Michigan.  These hours included the hours billed by the attorney for the work completed and the appearance.

[6]  Heritage also argues that the California State Bar’s Committee on Mandatory Fee Arbitration does not distinguish between apportioned and non-apportioned cases and the Bar opined that block billing hides accountability.  Heritage seems to be suggesting that we should take this statement of the State Bar as law and ignore the consistent precedent in California cases that provide trial courts with the discretion about whether to penalize block billing.  The State Bar’s comment about block billing in fee arbitrations is not binding on state courts. 

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