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Nickerson-Reti v. Bank of America, N.A.

United States District Court, D. Massachusetts

June 26, 2014

BANK OF AMERICA, N.A., successor by merger to BAC HOME LOANS SERVICING, LP, Defendant.


F. DDENNIS SAYLOR, District Judge.

This is a dispute arising out of the denial of a mortgage-loan modification. On June 22, 2007, plaintiff Donnah Nickerson-Reti obtained a mortgage loan of $417, 000. She secured the loan with a mortgage on her home in Lexington, Massachusetts. Defendant Bank of America, N.A., was the servicer of her mortgage loan.[1]

Nickerson-Reti applied for and was denied a mortgage-loan modification twice; once in 2009 and once in 2012. On August 16, 2013, she brought suit against defendant for claims arising out of her loan-modification applications and denials. On December 30, 2013, she amended her original complaint. The amended complaint alleges claims of breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and violations of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A, § 2.

On February 12, 2014, defendant moved to dismiss the amended complaint. On April 23, 2014, Nickerson-Reti moved for leave to file a further amended complaint. The proposed amended complaint alleges breach of fiduciary duty (Count 1); two claims of breach of contract (Counts 2 and 3); breach of the implied covenant of good faith and fair dealing (Count 4), promissory estoppel (Count 5); violations of Chapter 93A (Count 6); violations of the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. (Count 7); violations of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Rehabilitation Act, 29 U.S.C. § 701 et seq., and the Fair Housing Act, 42 U.S.C. § 3604 et seq. (Count 8); fraud (Count 9), and unjust enrichment (Count 11).[2]

For the following reasons, plaintiff's motion to amend will be granted in part and denied in part, and defendant's motion to dismiss will be denied as moot.

I. Background

A. Factual Background

The facts are set forth in the proposed amended complaint unless otherwise noted.

1. Nickerson-Reti's Mortgage Loan

Donnah Nickerson-Reti was formerly a resident of Massachusetts, and is now a resident of California.

Bank of America, N.A., is a federally chartered banking institution headquartered in North Carolina. BAC Home Loans Servicing, LP, is a subsidiary of BANA.

On June 22, 2007, Nickerson-Reti obtained a mortgage loan from BANA in the amount of $417, 000. The loan was secured by her home in Lexington, Massachusetts. Under the terms of the mortgage loan, Nickerson-Reti was obligated to make monthly payments of $2, 400.49. While the mortgage contract required her to pay BANA additional payments for escrow items such as taxes and insurance, BANA waived those payments as long as Nickerson-Reti dealt with them herself.

In February 2009, the Secretary of the Treasury established the Home Affordable Modification Program ("HAMP"), a federal initiative designed to provide incentives for lenders to agree to modification of home loan agreements in lieu of foreclosure. The goal of HAMP was to provide relief to borrowers who have defaulted or are likely to default by reducing mortgage payments to sustainable levels, without discharging any of the underlying debt. See U.S. Dep't of the Treasury, Supplemental Directive 09-01, available at Under HAMP, participating loan servicers were provided with incentive payments for each permanent mortgage-loan modification completed. Id. at 23. These modifications proceeded under a uniform process designed to identify eligible borrowers and render their debt obligations more affordable and sustainable. Id. at 1.

In its advertising materials, BANA offered to assist homeowners with counseling and loan modifications to help them make their mortgage payments and keep their homes. This assistance included the possibility of a HAMP loan modification.

In early 2009, Nickerson-Reti believed that she may have trouble keeping up with her mortgage payments in the near future. On March 4, 2009, she called BANA to apply for a HAMP loan modification. A BANA employee told her she could not apply for a HAMP modification because she had not missed any of her mortgage payments. According to her, on April 13, 2009, a BANA employee "strongly advised [her] that the best way to get any help from [BANA] was to skip making at least two [mortgage] payments." (Proposed Am. Compl. ¶ 18).

Nickerson-Reti subsequently missed two mortgage payments, but attempted to make two payments toward the principal on her loan in April and May of 2009. Instead of applying those payments to her loan's principal, BANA treated them as partial mortgage payments. It sent her a letter on May 12, 2009, stating she must pay an additional $900.49 by June 1, 2009, or the partial payment would be returned. Nickerson-Reti resumed her regularly scheduled payment of $2, 400.49 in June.

2. Application for a HAMP Modification

On April 14, 2009, Nickerson-Reti faxed an application for a HAMP loan modification to BANA. The bank responded on April 29, requesting additional documentation. She supplied the requested documents within seven days. BANA sent her two letters, one on May 12 and one on May 18, informing her that it had received those documents and that it would provide a decision on her request within ninety days.

Over the next six months, Nickerson-Reti received several form letters and offers from BANA concerning the HAMP program. She called the bank several times to inquire about the status of her application, but did not receive a clear answer.

On October 27, 2009, Nickerson-Reti called BANA and spoke to an employee named Ann Marie Stolle. According to Nickerson-Reti, Stolle told her that she was in default on her mortgage, and that sending BANA a check for $900.49 would cure the default. Stolle also told her that an employee named Patrick was working on her HAMP application. Nickerson-Reti paid the $900.49 to BANA.

On November 4, 2009, BANA sent Nickerson-Reti a letter stating that she was in default on her mortgage and that the loan would be accelerated unless she cured the default by February 2, 2010. At the time, she had not yet received a decision on her request for a HAMP modification. According to her, when she called BANA, an employee named Brendon told her that her application was still being processed and told her to ignore the foreclosure letter. He also told her "it's no big deal if it goes into foreclosure; Patrick can change that." (Proposed Am. Compl. ¶ 35). In November 2009, she received three foreclosure notices from BANA, each with a different default amount and cure date.

On November 11, 2009, she received a check for $1, 109.95, which BANA said was the return of a partial mortgage payment. She had never sent BANA a payment for that amount.

On December 6, 2009, she sent updated HAMP documents to BANA. She made several calls to BANA in December, but received no helpful information.

3. The Trial Period Plan

On December 22, 2009, Nickerson-Reti called BANA and spoke to an employee who told her that she had been granted a Trial Period Plan ("TPP") for a HAMP loan modification. The employee told her that she would get paperwork in the mail with further information. According to her, she was also told that if she made the required monthly TPP payments, she would be given a permanent modification at the end of the trial.

On December 24, 2009, Nickerson-Reti received a letter stating that she had been granted a TPP. Her monthly TPP payment was $1, 582.16. On December 30, she received a document requiring her to submit additional information and make certain representations about her finances. The document stated that if she complied with the requirements of her TPP, BANA would provide her with a HAMP modification. The document also stated that it acted as a revocation of BANA's waiver of payment for escrow items. (TPP, Docket No. 32, Ex. 3, ¶ 4(C)). Finally, it stated that BANA would send her a permanent loan-modification agreement if she complied with the terms of the TPP.

On January 13, 2010, Nickerson-Reti signed and returned the TPP document to BANA along with all of the requested forms, documents, and information. She faxed them to BANA again when she called and learned that it had not received the materials.

From February 2010 until August 2010, BANA sent Nickerson-Reti monthly statements informing her that she was participating in the TPP and that her monthly payment amount was $1, 582.16. From December 2009 through August 2013, BANA also charged Nickerson-Reti for various escrow items. She had previously paid these costs directly instead of paying them to BANA.

On September 3, 2010, Nickerson-Reti received a letter from BANA stating that she had been denied a permanent HAMP modification because she had failed to submit proper documentation. According to the amended complaint, when she called BANA that day, an employee told her she had provided the documents and that the decision to deny her a modification would be appealed.

On September 24, 2010, Nickerson-Reti called BANA and spoke to an employee who told her that her appeal had been denied. In the following months, she attempted to get an explanation from BANA as to why she was unable to receive a permanent HAMP modification. She also requested copies of her loan file. BANA did not tell her why she was denied a modification and refused to give her copies of her loan file.

On December 31, 2010, Nickerson-Reti received a notice from BANA stating that it would foreclose on her mortgage unless she cured a default of $23, 823.13 by January 30, 2011. Throughout 2011, she continued to send BANA mortgage payments of $1, 582.16 as specified by the TPP. BANA in turn sent her ...

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