United States District Court, D. Massachusetts
VINNY M. BRICKETT and STEPHEN R. BRICKETT, Plaintiffs,
HSBC BANK USA, N.A., Defendant
For Vinny M. Brickett, Stephen R Brickett, Plaintiffs: Josef C. Culik, LEAD ATTORNEY, CULIK LAW PC, Woburn, MA.
For HSBC Bank USA, N.A., Defendant: David G. Thomas, Michael E. Pastore, Greenberg Traurig, LLP, Boston, MA.
MEMORANDUM & ORDER
Nathaniel M. Gorton, United States District Judge.
Here we have a case involving the legality of a foreclosure of a residential mortgage after the homeowners had filed an application for a loan modification. Plaintiffs Vinny and Stephen Brickett (collectively, " the Bricketts" ) brought suit in Massachusetts state court against HSBC Bank USA, N.A. (" HSBC" ) for a violation of (1) the mortgagee's obligation of good faith and reasonable diligence and (2) the Massachusetts Consumer Protection Act, M.G.L. c. 93A, § 9. Defendant promptly removed the case to this Court and, after discovery, the parties filed cross-motions for summary judgment. For the reasons that follow, the Court will allow HSBC's motion and deny the Bricketts' motion.
A. Factual Background
On March 22, 2004, plaintiffs purchased a residential property in Middleton, Massachusetts, financed by a note of $400,000 and secured by mortgage to HSBC. Both of the Bricketts signed the note and the mortgage agreeing to make the requisite monthly payments.
The Bricketts first fell into default on the mortgage in October, 2008 and then again in March, 2010. In both May and June of 2011, HSBC notified the Bricketts that they had the option to apply for a loan modification to cure their default. Both times the correspondence provided a list of required documents to be submitted with an application to initiate a review for a loan modification.
The Bricketts did not apply for a loan modification during 2011. Instead, they mailed three checks to HSBC, each of which was returned by HSBC with notification that the attempted payments failed to cure the default. Each letter from HSBC accompanying the returned checks explained that the loan had been referred to HSBC's foreclosure counsel to initiate foreclosure proceedings.
On June 22, 2012, HSBC's foreclosure counsel mailed a " Notice of Mortgage Foreclosure Sale" to the Bricketts' residence via certified mail. During the following three weeks, HSBC's foreclosure counsel published in the Tri Town Transcript, the local newspaper in Middleton, the appropriate notice of the impending foreclosure sale, which was scheduled for July 25, 2012.
More than one year after falling into default on their mortgage for the second time, and only 12 days before the date of the scheduled foreclosure sale, the Bricketts began the process of applying for a loan modification. On July 13, 2012, Vinny Brickett accessed HSBC's website and downloaded a " Financial Workout Form." The workout form identified five additional items of required documentation that constituted a complete loan modification application: (1) a hardship letter, (2) copies of the past two years of tax returns, (3) copies of the past two months of bank statements, (4) copies of the past two pay stubs and (5) a copy of the listing agreement, if the property was currently listed for sale. The same documentation had been identified in each of the 2011 HSBC letters notifying the Bricketts of their option to apply for a loan modification.
Significantly, the workout form stated, in bold font, that the loan modification review " will not be initiated until all the required documentation is received."
Three days later, Ms. Brickett faxed a completed workout form to HSBC with
some, but not all, of the required documentation. Her submission did not include copies of complete tax returns of the Bricketts for 2010 and 2011 or the two most recent bank statements for all accounts held by the Bricketts. Furthermore, only Ms. Brickett signed the hardship letter despite the fact that both Bricketts were named on the note and mortgage.
On July 18, 2012, HSBC sent a letter to the Bricketts notifying them that their loan modification application was incomplete and could not be processed at that time. It requested the Bricketts' 2010 and 2011 income tax returns, including all accompanying schedules, which Ms. Brickett faxed to HSBC the following day. On July 23, two days before the scheduled foreclosure, HSBC sent the Bricketts another notification letter regarding their incomplete application and requested the two most recent monthly ...