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Robert D. Mantz v. Wells Fargo Bank

January 19, 2011

ROBERT D. MANTZ, PLAINTIFF,
v.
WELLS FARGO BANK, N.A., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Tauro, J.

MEMORANDUM

I. Introduction

This action arises out of a refinance loan that Defendant Option One Mortgage Corporation ("Option One") extended to Plaintiff, Robert D. Mantz, and his wife, Jamie C. Mantz, on November 11, 2006 ("the loan"). Plaintiff's Complaint alleges violations of the Truth in Lending Act ("TILA"), the Real Estate Settlement Procedures Act ("RESPA"), the Credit Repair Organizations Act ("CROA"), the Racketeer Influenced and Organizations Act ("RICO"), and fraud and misrepresentation.*fn1 Plaintiff seeks rescission pursuant to TILA; a declaration of this court that all documents used by Defendants in forming a contract with Plaintiff "be deemed null and void"; actual damages; statutory damages; punitive damages; and costs.*fn2

Presently at issue are Defendants Wells Fargo Bank, N.A. ("Wells Fargo") and American Home Mortgage Servicing Incorporated's ("AHMSI's") Motion to Dismiss [#10]; Defendant Option One's Motion to Dismiss [#18]; Plaintiff's Cross Motion for Summary Judgment against Defendants Wells Fargo and AHSMI [#13]; and Plaintiff's Cross Motion for Summary Judgment against Defendant Option One [#20]. For the following reasons, Defendants Wells Fargo and AHMSI's Motion to Dismiss is ALLOWED; Defendant Option One's Motion to Dismiss is ALLOWED; and Plaintiff's Cross-Motions for Summary Judgment are DENIED.

II. Background

A. Factual Background*fn3 In 2000, Plaintiff purchased a home in Medfield, Massachusetts.*fn4 In 2006, Plaintiff had a mortgage home loan through EMC Mortgage Corporation ("EMC") with monthly payments of $2739 per month.*fn5 A 2006 licensed appraisal indicated the value of his home to be $497,500.*fn6 In 2006, at the time of the credit transaction in question, Plaintiff owed EMC $232,300 for the property, but he was unemployed and had no source of income.*fn7 The Mantzes lived on a single fixed income from Jamie Mantz's job as an ophthalmic medical technician.*fn8

On or about September 9, 2006, as part of a Chapter 13 bankruptcy plan, Plaintiff submitted a loan refinance application to Sunset Mortgage Corporation ("Sunset").*fn9 Sunset's representative, "Miss Uniacke,"*fn10 indicated that Sunset and Defendant Option One agreed that Plaintiff and his wife should increase the amount of their prior home loan mortgage by approximately $100,000.*fn11 At Sunset's direction, Plaintiff listed himself as the "co-borrower" and his wife as the "borrower."*fn12 Several documents clearly defined the Mantzes' income level and Plaintiff never tried to conceal or inflate their income level.*fn13

Plaintiff has a high school education and had indicated repeatedly to Uniacke that he was not familiar with the procedures surrounding refinancing.*fn14 Plaintiff told Defendants that he was putting complete trust in them.*fn15 Defendants never discussed or disclosed to Plaintiff the Yield Spread Premium prior to settlement.*fn16 Defendants also never discussed "stated income"prior to settlement and Plaintiff did not know the meaning of the phrase "stated income"at the time that he signed the document.*fn17 In fact, Plaintiff assumed that he was confirming the information on the income documents submitted with the refinance application.*fn18 To this day, Plaintiff has no knowledge of the level of income that Defendants misrepresented on his application to make the home loan refinance appear suitable for approval.*fn19

Settlement proceedings occurred on November 15, 2006, and Plaintiff's home loan refinance transaction was assigned credit transaction number 0022553168.*fn20 Plaintiff alleges that the documents signed on November 15, 2006 are void because they were procured through Defendants' fraud and misrepresentation.*fn21 Plaintiff further alleges that he only signed the documents because he might have lost his home if the refinance transaction did not occur.*fn22

Since November 2006, Defendant Option One has failed to supply Plaintiff with required monthly billing statements.*fn23 In March 2007, Defendant AHMSI became the servicer of the loan and also failed to submit any scheduled monthly billing statements.*fn24 In addition, Plaintiff submitted many Qualified Written Requests ("QWRs") to Defendants to request specific information related to the true cost of the credit, but Defendants have failed to answer the requests.*fn25

On September 18, 2008, Plaintiff sent proper notification that he was exercising his extended right-to-cancel on credit transaction number 0022553168.*fn26 On September 22, 2008, Defendants Wells Fargo and Option One received Plaintiff's notice to cancel/rescind.*fn27 To date, Defendants have received four separate letters of notification that Plaintiff has exercised his extended right-to-cancel.*fn28

Plaintiff alleges that Defendants violated their fiduciary duties to Plaintiff because it was clear that Plaintiff would not be able to sustain the monthly home loan payment.*fn29

B. Procedural Background Plaintiff filed his Complaint in this case on November 17, 2009.

Approximately a year and a half earlier, on June 27, 2008, Plaintiff and his wife filed a lawsuit against Defendant Wells Fargo in Massachusetts Superior Court, Norfolk County.*fn30

Plaintiff asserted violations of TILA and RESPA and sought rescission of the mortgage loan.*fn31

Plaintiff also alleged that Wells Fargo "participated in unscrupulous predatory home loan practices with the intent to dispossess the plaintiffs of their home and defraud them of the substantial equity therein."*fn32

In the state court case, Plaintiff refused to answer interrogatories concerning his rescission claim. Defendant Wells Fargo filed a Motion to Compel Plaintiffs to Produce Further Answers to Interrogatories,*fn33 which the Superior Court allowed.*fn34

Plaintiff never provided supplemental answers to the interrogatories, and on October 18, 2010, the Superior Court dismissed ...


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