United States District Court, D. New Hampshire
Farion N. Brown and Donna Brown
Wells Fargo Home Mortgage A/K/A Wells Fargo Bank, N.A., and Federal National Mortgage Association Opinion No. 2016 DNH 102
N. Laplante United States District Judge.
case involves a mortgage-holder's obligations to a
mortgagor under the Real Estate Settlement Procedures Act
("RESPA"), 12 U.S.C. § 2601 et seq.
and the Equal Credit Opportunity Act ("ECOA"),
15 U.S.C. § 1691 et seq., when the mortgagor
has a loan modification request pending before foreclosure
proceedings commence. Farion and Donna Brown, having fallen
behind in their mortgage payments, made such a request to
Wells Fargo Home Mortgage, which serviced their mortgage loan
on behalf of its owner, Federal National Mortgage Association
("FNMA"). The Browns' efforts to discuss the
application with Wells Fargo were met with alternating
silence and requests for further information, which the
Browns diligently provided. After the communication continued
for several months, Wells Fargo ultimately concluded that it
did not have time to consider the modification application
and subsequently foreclosed.
Browns filed this action against Wells Fargo and FNMA,
alleging that Wells Fargo violated RESPA by foreclosing
during pendency of a modification request and violated the
ECOA by failing to notify the Browns of any decision on that
request before the foreclosure sale. The Browns also bring
claims under New Hampshire's Unfair, Deceptive, or
Unreasonable Collection Practices Act ("UDUCPA"),
N.H. Rev. Stat. Ann. § 358-C:3, and the duty of
good faith and fair dealing. By dint of the Browns'
claims under RESPA and the ECOA, the court has subject-matter
jurisdiction over this matter under 28 U.S.C.
§§ 1331 (federal question) and 1367
defendants have moved to dismiss all claims. See Fed. R.
Civ. P. 12(b)(6). They argue, first, that N.H. Rev.
Stat. Ann § 479:25, II precludes any claims
challenging the validity of the mortgage because the
foreclosure sale has already taken place. They also challenge
the sufficiency of the Browns' claims for relief under
RESPA; contend that no adverse action notification was due to
the Browns under the ECOA because the Browns had defaulted;
argue that the defendants' actions in foreclosing the
mortgage do not amount to "debt collection" under
the UDUCPA; and contend that the provisions of the mortgage
agreement allowing the defendants to foreclose in the event
of default preclude a claim under the duty of good faith and
hearing oral argument, and as discussed fully below, the
court grants the defendants' motion to dismiss the
Browns' claims under the UDUCPA and the duty of good
faith and fair dealing, and the Browns' claims for
injunctive relief under RESPA and the ECOA, but denies it as
to the Browns' RESPA and ECOA claims for damages.
Applicable legal standard
survive a motion to dismiss under Rule 12(b)(6), the
plaintiff must state a claim to relief by pleading
"factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Martinez v. Petrenko, 792
F.3d 173, 179 (1st Cir. 2015) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). In ruling on such a
motion, the court accepts as true all well-pleaded facts set
forth in the complaint and draws all reasonable inferences in
the plaintiff's favor. See, e.g., Martino v. Forward
Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010). The court
"may consider not only the complaint but also facts
extractable from documentation annexed to or incorporated by
reference in the complaint and matters susceptible to
judicial notice." Rederford v. U.S. Airways,
Inc., 589 F.3d 30, 35 (1st Cir. 2009) (internal
following factual summary adopts the approach described
above. The Browns purchased their home in 1999, subject to a
mortgage, which they refinanced in 2004. The Browns remained
current on their mortgage payments until 2014, when medical
expenses and periodic unemployment set them back. In April of
2015, the Browns were three to four months in arrears on
their mortgage payments. In May of that year, Wells Fargo
provided the name of a "dedicated home preservation
specialist" to the Browns.
Browns telephoned Wells Fargo on June 29, 2015, requesting
that they be considered for a six-month forbearance in light
of Mr. Brown's unemployment. Though Wells Fargo told the
Browns that a manager would contact them, no manager did.
Having received no response, the Browns again telephoned
Wells Fargo on July 17, 2015. Again, Wells Fargo failed to
acknowledge the Browns' request. Instead, ten days later,
on July 27, 2015, Wells Fargo commenced foreclosure
proceedings. The Browns again contacted Wells Fargo on July
29 and August 7. During each of those two calls, a
representative informed them that Wells Fargo required
additional information. The Browns faxed the requested
information to Wells Fargo on July 30 and August 13,
respectively. On August 19, 2015, despite the Browns'
many contacts with Wells Fargo, the bank informed the Browns
that "we have not heard from you, " and that there
was insufficient time to review their loss mitigation
application before the scheduled August 26, 2015 foreclosure.
According to the complaint, Wells Fargo never notified the
Browns of any decision on their application.
a request from the Brown's attorney to delay the
foreclosure in light of the outstanding mitigation
application and the applicable regulations, Wells Fargo
foreclosed and sold the Browns' home. On October 2, 2015,
the Browns received a notice of eviction. They filed suit in
Hillsborough County Superior Court shortly thereafter. The
defendants removed the case to this court.
mentioned at the outset, the Browns' complaint recites
four causes of action: (1) a violation of regulations
promulgated under RESPA; (2) a violation of regulations
promulgated under the ECOA; (3) a violation of New
Hampshire's UDUCPA; and (4) a violation of the duty of
good faith and fair dealing. The Browns seek damages as well
as injunctive relief in the form, effectively, of a
rescission of the foreclosure sale. The defendants move to
dismiss all counts under Federal Rule of Civil Procedure
12(b)(6) and also contend that N.H. Rev. Stat. Ann
§ 479:25, II precludes the plaintiffs from
challenging the validity of the foreclosure sale after that
sale took place.
court agrees with the defendants that the Browns have failed
to state claims that the defendants have violated the UDUCPA
or the duty of good faith and fair dealing. The court further
agrees with the defendants that N.H. Rev. Stat. Ann
§ 479:25, II precludes the Browns from challenging
the validity of the foreclosure, to the extent that they do
so. However, the Browns have -- if only just barely --
alleged facts that, construed in their favor, "allow
the court to draw the reasonable inference that the defendant
is liable" for violations of RESPA and the ECOA.
Martinez v. Petrenko, 792 F.3d at 179. Accordingly,
their claims for damages under those statutes remain.
Timeliness of the Browns' suit
defendants contend that N.H. Rev. Stat. Ann§ 479:25, II bars the Browns from challenging
the validity of the foreclosure after ...