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Fox v. Ocwen Loan Servicing, LLC

United States District Court, D. New Hampshire

August 3, 2017

Gail Fox and Ralph Wass
v.
Ocwen Loan Servicing, LLC and HSBC Bank USA, N.A., as Trustee for SG Mortgage Securities Trust 2006-OPT2, Asset Backed Certificates, Series 2006-OPT2 Opinion No. 2017 DNH 147

          ORDER

          Joseph DiClerico, Jr., United States District Judge

         Gail Fox and Ralph Wass brought suit in state court to enjoin the foreclosure sale of their home in Goffstown, New Hampshire. Ocwen Loan Servicing, LLC and HSBC Bank USA, N.A., as trustee, removed the case and have moved to dismiss. The plaintiffs object.

         Standard of Review

         When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must determine whether the plaintiff has alleged sufficient facts to support a plausible claim for relief. In re Curran, 855 F.3d 19, 25 (1st Cir. 2017). The court accepts the properly pleaded facts as true and takes inferences from the facts in the light most favorable to the non-moving party. O'Shea v. UPS Retirement Plan, 837 F.3d 67, 77 (1st Cir. 2016). Conclusory allegations and mere statements of the elements of a cause of action are not sufficient to avoid dismissal. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         Ordinarily, a motion to dismiss under Rule 12(b)(6) is decided based on the allegations in the complaint, along with documents appended to the complaint. See Fed.R.Civ.P. 12(d); Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). An exception to that rule allows the court to consider documents that are referenced in the complaint and documents that are central to the plaintiffs' claims. Claudio-De Leon v. Sistema Univ. Ana G. Mendez, 775 F.3d 41, 46 (1st Cir. 2014). The court may also consider official public documents and matters that are subject to judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011).

         Background

         Fox and Wass bought the Goffstown property by warranty deed on June 27, 2006. They granted a mortgage on the Goffstown property to Option One Mortgage Corporation in the amount of $236, 000, and the mortgage was recorded on July 24, 2006.[1]

         They allege that Option One sold its mortgage servicing business, along with all of its mortgages, to American Home Mortgage Servicing Inc. on April 30, 2008. Option One then changed its name to Sand Canyon Corporation in October of 2008 and did not hold any mortgages by 2009. Sand Canyon purported to assign the plaintiffs' mortgage to HSBC in April of 2010, and the assignment was recorded on April 28, 2010.

         Fox and Wass allege that the assignment of their mortgage from Sand Canyon to HSBC in 2010 failed because the mortgage had been sold to American Home Mortgage Servicing in April of 2008. As a result of the sale, Sand Canyon did not own their mortgage at the time of the purported assignment to HSBC in 2010.

         In May of 2010, Fox and Wass filed for bankruptcy protection under Chapter 13. In re Gail M. Fox and Ralph K. Wass, Case No. 10-12175-JMD (Bankr. D.N.H. May 16, 2010). In their bankruptcy schedules dated May 10, 2010, Fox and Wass listed American Home Mortgage Servicing, Inc. as the holder of a claim on the Goffstown property in the amount of $275, 141.68. HSBC filed a proof of claim on the property as a secured creditor in June of 2010, with the amount of arrearage listed as $18, 760.32 and the amount of the secured claim listed as $279, 133.60. American Home Mortgage Servicing was listed as the entity to receive notices and payment.

         Under the terms of their plan, Fox and Wass were to pay $733.00 each month for forty-five months, which would total $32, 985.00, to cover debts owed, including arrearages owed to “HSBC/American Home Mortgage Servicing.” Their regularly scheduled ongoing payments to “HSBC Bank/American Home Mortgage Servicing” were to be paid outside of the plan. Their plan was confirmed on August 2, 2010.

         Fox and Wass did not make the regular mortgage payments after filing their bankruptcy petition, causing a post-petition arrearage to accrue. In response to HSBC's motion to lift the stay to allow HSBC to pursue its remedies under the mortgage, Fox and Wass entered a stipulation with HSBC to pay the post-petition arrearage. The plan was amended accordingly. On December 4, 2012, the bankruptcy trustee reported that Fox and Wass had met the requirements for discharge, and they were granted discharges the next day. The case was closed on January 2, 2013.

         Wass filed a second bankruptcy petition under Chapter 13 on June 14, 2013. HSBC filed a notice of appearance in the case on June 24, 2013. In his plan, Wass stated that the Goffstown property had a mortgage that was not current with the mortgagee listed as HSBC. The plan was confirmed on August 8, 2013, and listed HSCB as a secured creditor with a mortgage on the Goffstown property. The plan was modified on September 23, 2015, and still showed that the HSBC mortgage was not current. The trustee moved to dismiss the case because Wass had not made the payments required under the plan. The case was dismissed on July 8, 2016.

         In April of 2017, Fox and Wass filed suit against Ocwen and HSBC in state court to enjoin the foreclosure sale of the property and seeking the costs of the suit under RSA 361-C:2. Fox and Wass asked to postpone the foreclosure until the defendants provided the “‘wet signature' mortgage documents” to prove that the mortgage being foreclosed is the mortgage that Fox and Wass signed. They also alleged that “the temporary injunction will provide time to resolve the issue of ...


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