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Bulmer v. MidFirst Bank, FSA

United States District Court, D. Massachusetts

November 14, 2014

PAUL BULMER, Plaintiff,

Page 272

For Paul Bulmer, Plaintiff: Daniel D Bahls, LEAD ATTORNEY, PRO HAC VICE, Community Legal Aid, Springfield, MA; Katherine Callaghan, LEAD ATTORNEY, Community Legal Aid, Springfield, MA.

For MidFirst Bank, FSA, Defendant: Effie L. Gikas, LEAD ATTORNEY, James L. Rogal, Orlans Moran, PLLC, Waltham, MA.

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KENNETH P. NEIMAN, United States Magistrate Judge.

Paul Bulmer (" Plaintiff" ) brings this action asserting that the assignee of his mortgage and promissory note, MidFirst Bank, FSA (" Defendant" ), its alleged agent MidLand Mortgage Company (" MidLand" ) and its predecessor-in-interest and alleged agent Wells Fargo Bank (" Wells Fargo" ), failed to comply with certain federal and state statutes and regulations when handling his mortgage arrearages. In addition to seeking federal and state statutory damages, Plaintiff seeks declaratory and injunctive relief preventing Defendant from foreclosing on his Agawam property.

Plaintiff alleges in his complaint that Defendant and its agents failed to correct or explain alleged errors pointed out in a Qualified Written Request (" QWR" ), in violation of 12 U.S.C. § 2605(f) (Count 1); sent a faulty notice of right-to-cure in violation of Mass. Gen. Laws ch. 244, § 35A (Count 2) and in noncompliance with the power of sale in the mortgage (Count 3); charged unlawful fees and provided false information and disingenuous forbearance agreements in violation of Mass. Gen. Laws ch. 93A (Count 4); and, in violation of Veterans Affairs regulations 38 C.F.R. § § 36.4350 (a),(g), and (h), failed to properly consider Plaintiff for a qualified loss mitigation plan (" HAMP" ) (Count 7), failed to meet face to face with Plaintiff (Count 6), and failed otherwise to make reasonable efforts to cure the default (Count 5). Once discovery was completed, Defendant moved for summary judgment with regard to all counts. Plaintiff has since agreed to dismiss Count 6.

Pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73, the parties have consented to the jurisdiction of this court. For the reasons that follow, the court will allow Defendant's motion with respect to Counts 1 and 4 through 7 but deny it with respect to Counts 2 and 3.


When ruling on a motion for summary judgment, the court must construe the facts in a light most favorable to the non-moving party. Benoit v. Tech. Mfg. Corp., 331 F.3d 166, 173 (1st Cir. 2003). Summary judgment is appropriate when " there is no genuine issue as to any material fact" and " the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is " genuine" when the evidence is such that a reasonable fact-finder could resolve the point in favor of the non-moving party, and a fact is " material" when it might affect the outcome of the suit under the applicable law. Morris v. Gov't Dev. Bank of P.R., 27 F.3d 746, 748

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(1st Cir. 1994). The non-moving party bears the burden of placing at least one material fact into dispute after the moving party shows the absence of any disputed material fact. Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir. 1994) (discussing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).


Except where noted, the following facts, which are undisputed, are construed in a light most favorable to Plaintiff.

On May 31, 2005, Plaintiff bought his home at 342 Adams Street in Agawam (" the property" ) bye executing a $204,300 promissory note to Wells Fargo in exchange for a loan issued under the Veterans Affairs (" VA" ) Guaranteed Loan Program. (Defendant MidFirst Bank's Concise Statement of Facts (" Def's SOF" ) ¶ 1.) Plaintiff secured the loan by granting a mortgage on the property to Wells Fargo, which would on April 9, 2009, assign the mortgage to Defendant, retaining the servicing rights. (Id. ¶ ¶ 2, 3.) The VA Guaranteed Loan statutes and regulations are incorporated into the mortgage. (Id.)

Plaintiff fell behind on his payments to varying degrees over the years, agreed to a loan modification in 2007, and was still very much in arrears by January 1, 2010. (Id. ¶ 7.) Although, evidently, Plaintiff had sufficient assets in his retirement account to bring his payments current, it became unclear how much he owed. By his own count, he received three letters from Defendant's representatives offering inconsistent payoff amounts over a sixteen-day period. (Plaintiff's Response to Defendant's Concise Statement of Facts (" Pl's SOF" ) ¶ 2.) A December 28, 2009 letter from Defendant's collections law firm listed a reinstatement quote of $24,590.52 if paid by January 22, 2010; a January 7, 2010 forbearance document from Wells Fargo Home Mortgage provided a $22,874.55 figure if paid by March 7th; and a January 13, 2010 letter from the law firm stated $25,234.48 would bring the account current if paid by February 11th. (Id. ¶ 5(d); Bulmer Aff. Ex. A.; Def's SOF, ¶ 10.) As the parties acknowledged at the hearing on Defendant's motion, legal fees account for a large part of the inconsistency.

At any rate, Plaintiff maintains that he relied on the Wells Fargo quote, ultimately paying $25,911.94 on January 19, 2010, which he believed would put him two payments ahead of schedule. (Pl's SOF, ¶ 5(d).) Defendant contends that Plaintiff was not entitled to rely on the Wells Fargo quote and that the January 13, 2010 quote of $25,234.48 applied instead. Accordingly, as of January 20, 2010, the balance was at best unclear.

On or about August 2, 2010, Wells Fargo transferred the servicing of Plaintiff's mortgage to MidLand. (Def's SOF. ¶ 4.) On August 30, 2010, MidLand contacted Plaintiff to explain that Wells Fargo had " incorrectly applied" his mortgage payments. (Id. ¶ 12.) This " explanation" may relate to the payoff, a suspense balance that the parties agree was factored into the payoff quotes, or a matter not otherwise reflected in the record.

On November 18, 2010, MidLand mailed Plaintiff, who was again in arrears, a letter entitled " Notice of Default," which was " intended" to comply with a Massachusetts law requiring mortgage holders to send defaulting borrowers notice of curing information and to observe a grace period before exercising the statutory power of sale. (Id. ¶ 14.); Mass. Gen. Laws. 244, § 35A. In the Notice of Default, MidLand pegged Plaintiff's delinquency at $4,782.80, although Plaintiff believes he only owed $1,015.98 at the time. (Pl's SOF ¶ 7(i).)

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Plaintiff has since submitted evidence that he could then have cured a default of $1,015.98. (Id.) The next day, Plaintiff explained to MidLand that he was having difficulty making payments due to financial problems after a severe head injury. (Def's SOF at P 15.)

Plaintiff and MidLand subsequently attempted to work out loss mitigation and mortgage assistance solutions. (Id. at ¶ ¶ 15-18.) Plaintiff contends that MidLand did not pursue these solutions in good faith, pointing in particular to a March 3, 2011 internal note by an unidentified customer service representative which states: " Please be aware that mtgr has ability to make payments, we can collect as much as he has." (Pl's SOF at ¶ 11(d).) On April 6, 2011, MidLand approved Plaintiff for a forbearance agreement, which he signed on April 22, 2011. (Id. ¶ 19.) Plaintiff avers that Defendant's representatives told him that it would begin foreclosure proceedings if he did not sign that agreement. (Pl's SOF ¶ 13(b).)

The parties presently dispute whether this forbearance agreement was an acknowledgment of the amounts due under the mortgage, thereby resolving the payoff dispute. In addition, the parties disagree as to whether it was feasible for Plaintiff to abide by the agreement. According to Defendant, the agreement, which required several regular monthly mortgage payments followed by a balloon payment, was feasible for Plaintiff. ( See Def's SOF ¶ ¶ 18-19; Doc. No. 34, Ex.13 P.3.) Plaintiff disagrees, calculating that the monthly payments constituted 75% of his income. ( See Pl's SOF ¶ ¶ 11(e),(f) and 12.) The parties agree, however, that Plaintiff thereafter was not able to meet his obligations under the agreement. ( See Def's SOF ¶ ¶ 20, 22.)

On July 15, 2011, Defendant took over servicing Plaintiff's mortgage from MidLand. (Id. ¶ 21.) And in January of 2012, Defendant told Plaintiff he was being considered for a mortgage assistance program similar to the Home Affordable Modification Program (" HAMP" ) but that he had to provide certain financial information. (Id. ¶ 23.) After some back and forth over the application materials, Plaintiff, on March 2, 2012, was denied such assistance for want of income. (Id. ¶ ¶ 25-27.) On March 13, 2012, Defendant's law firm sent Plaintiff a notice of acceleration of the mortgage loan. (Id. ¶ ¶ 28-29.) Defendant thereafter twice sent Plaintiff mortgage assistance forms. (Id. ¶ ¶ 30-31.)

On May 23, 2012, Defendant received from Plaintiff's attorney a document styled a " Qualified Written Request." (Id. ¶ ¶ 31-32.) The document requested resolution of the payoff issue. (Doc. No. 34, Exhibit 20, P.2.) Defendant responded by sending only the mortgage, note, and the 2007 loan modification, explaining, in essence, that it had no further information regarding the payoff issue because the matter predated Defendant's loan servicing. ( See Doc. No. 34, Exhibit 22, P.1 (" [w]e have not included information [from before August 2, 2010] unless related to [Wells Fargo's] servicing of your client's loan and it is available to us." ))

Defendant, it should be noted, has not yet foreclosed on the Plaintiff, and the extent to which his payments are currently past ...

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