Heard: May 6, 2016.
action commenced in the Superior Court Department on March 5,
case was heard by Thomas Drechsler, J., on a motion for
J. Gleason for the plaintiff.
Fialkow for the defendant.
Present: Cohen, Green, & Hanlon, JJ.
promulgated by the Federal Department of Housing and Urban
Development (HUD) require a mortgage lender to conduct a
face-to-face meeting with defaulting borrowers before
foreclosing on certain federally insured mortgages. The
defendant, Wells Fargo Bank, N.A., (Wells Fargo),
acknowledges that failure to comply with those regulations
may serve as a basis to invalidate its foreclosure of the
mortgage it held on the plaintiff's property, but asserts
that it qualifies for an exemption. We conclude that Wells
Fargo does not qualify for the exemption from the
face-to-face meeting requirement, and reverse so much of the
judgment as dismissed that part of the plaintiff's
March 28, 2005, the plaintiff, Tomas Jose, executed a
promissory note in the amount of $440, 002 to refinance a
prior mortgage loan on 499 Boston Street in Lynn (property).
To secure the note, Jose granted a mortgage (mortgage) to
Mortgage Electronic Registration Systems, Inc. (MERS), solely
as nominee for the lender and the lender's successors and
assigns. The mortgage was insured by the Federal Housing
Administration, and incorporated applicable HUD regulations
by reference. More specifically, under par. 9(d) of the
mortgage, acceleration or foreclosure of the mortgage is not
authorized "if not permitted by regulations of the [HUD]
Secretary." On February 4, 2009, MERS assigned the
mortgage to Wells Fargo. At all relevant times, Wells Fargo
serviced Jose's mortgage loan. Wells Fargo does not
maintain a servicing branch within 200 miles of the property.
However, Wells Fargo does maintain deposit and home loan
origination branch offices within 200 miles of the property.
Wells Fargo never scheduled or conducted a face-to-face
meeting with Jose to discuss an alternative to foreclosure.
the absence of a face-to-face meeting, however, Wells Fargo
and Jose entered into several forbearance agreements and
three permanent modifications. Jose breached each of those
agreements. Additionally, while in default, Jose twice filed
for bankruptcy to avoid foreclosure. Wells Fargo eventually
obtained relief from the bankruptcy court's automatic
stay so that it could foreclose on the
February 28, 2012, shortly before a scheduled foreclosure
sale, Jose called Wells Fargo to request a fourth loan
modification. Wells Fargo told Jose that because the
foreclosure sale was scheduled a few days later, he should
submit an application and supporting documents for his
requested modification "ASAP." Jose submitted the
application and supporting documents that same day. Wells
Fargo did not approve a further loan modification and, on
March 5, 2012, Wells Fargo conducted a foreclosure sale.
Wells Fargo was the high bidder at the foreclosure.
commenced this action by complaint filed on March 5, 2012,
the day of the foreclosure. After Wells Fargo filed its
answer to that complaint, Jose moved successfully to file an
amended complaint. In his amended complaint, Jose alleged
breach of the covenant of good faith and fair dealing (count
1), breach of contract (count 2), and violation of G. L. c.
93A (count 3). Count 2 and the portion of count 3 relying on
count 2 center on Jose's contention that Wells
Fargo's failure to conduct a face-to-face meeting with
him prior to the foreclosure rendered its foreclosure of the
mortgage invalid. Wells Fargo moved for summary judgment and,
after a hearing, a judge of the Superior Court allowed the
motion. Judgment entered thereafter, dismissing the
complaint. Jose appeals.
Wells Fargo argued in the Superior Court that noncompliance
with applicable HUD regulations would not invalidate a
foreclosure unless the nature of the noncompliance rendered
the foreclosure fundamentally unfair, it has abandoned that
argument on appeal in light of Pintiv.Emigrant Mort. Co., 472 Mass. 226 (2015), and
Wells Fargo Bank,N.A. v.Cook, 87 Mass.App.Ct. 382 (2015). Instead, it
presses its argument that the ...