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Palacios v. Ditech Financial, LLC

United States District Court, D. Massachusetts

August 15, 2016

JAVIER PALACIOS, Plaintiff,
v.
DITECH FINANCIAL, LLC, Defendant.

          Javier Palacios, Plaintiff, represented by Chaz Robert Fisher, FISHER LEGAL, PA.

          Ditech Financial LLC, Defendant, represented by Richard E. Briansky, McCarter & English, LLP.

          REPORT AND RECOMMENDATION REGARDING DEFENDANT DITECH FINANCIAL LLC'S MOTION FOR JUDGMENT ON THE PLEADINGS (Dkt. No. 13)

          DONALD L. CABELL, Magistrate Judge.

         The plaintiff, Javier Palacios ("the plaintiff"), has brought a five count complaint against the current servicer of his residential mortgage, DiTech Financial, LLC ("the defendant"). The defendant has in turn moved for judgment on the pleadings. As discussed below, I recommend that the motion be granted in part and denied in part.

         I. BACKGROUND

         A. Relevant Facts

         The facts alleged in the complaint are accepted as true for purposes of the present motion. Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009). In 2005 the plaintiff purchased a condominium in Winthrop. He granted a mortgage to his lender, Leader Bank, who in turn assigned the mortgage and note to Bank of America, N.A. In December of 2011 Bank of America, N.A. transferred and assigned the mortgage to the defendant, then known as Green Tree Servicing, LLC.[1]

         The complaint does not allege that the plaintiff missed any mortgage payments, and the plaintiff did not concede at oral argument that he had missed any mortgage payments. That is presumably what happened, though, because the defendant initiated foreclosure proceedings on the plaintiff's residence in October 2012. (Dkt. No. 1-1 [Complaint] at Ex. F).

         The plaintiff requested a loan modification under the Home Affordable Modification Program (HAMP), although it is not clear whether he did so before or after the defendant began the foreclosure process. Regardless, the defendant denied the plaintiff's request for a loan modification.

         Between April 4, 2014, and July 16, 2014, the plaintiff sent multiple letters to the defendant demanding that the foreclosure proceedings be put on hold to give the plaintiff time to appeal the denial of his loan modification request. ( Id. at Exs. K-N). Notably, none of these letters claimed that there were any errors with the plaintiff's account balance, or with the processing of mortgage payments, and none of the letters requested any information about these items. ( Id. )

         Then, on April 15, 2015, the defendant reportedly approved the plaintiff's request for a permanent loan modification. ( Id. at ¶ 18). That did not resolve everything, however; the plaintiff disputed the balance the defendant claimed he owed. ( Id. ). On May 4, 2015, the plaintiff sent the defendant a letter stating that he had "requested additional information to support [the] loan balance and all charges included into said balance." ( Id. at Ex. O). The letter did not specify when the plaintiff had made this request, and did not provide any details regarding the plaintiff's belief that the mortgage balance was incorrect. (The complaint does not do so either.) Rather, the May 4, 2015 letter attached a loan modification agreement, apparently from the defendant. The modification agreement had signature lines for both parties; the plaintiff had signed but the defendant had not. ( Id. )

         The plaintiff began to submit monthly mortgage payments as though the modification agreement was in effect but the defendant rejected them. In July 2015, and again in August 2015, the defendant returned the payments to the plaintiff along with a letter stating that the payment was insufficient to reinstate the plaintiff's account. ( Id. at Exs. Q, S).

         On August 30, 2015, the plaintiff sent a letter to the defendant threatening legal action. On page three of the letter, the plaintiff requested five categories of documents, including "all charges and credits to [the plaintiff's] account" and an "itemization or copy of invoices for services charged against [the plaintiff's] account." ( Id. at Ex. R). The defendant acknowledged receipt of the letter but never provided the requested documents.

         In October 2015, the defendant reinstituted foreclosure proceedings. ( Id. at ¶ 32).

         B. The Complaint

          The complaint advances five causes of action.

• Count I is for the defendant's "failure to render an accounting." It alleges that the defendant failed to respond to the plaintiff's request for documentation regarding his account. At oral argument, the plaintiff described this claim as "derivative" of his claim in Count III for violation of the Fair Debt Collection Practices Act.
• Count II is for violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617. It alleges that the defendant failed to do several things it was required to do. Specifically, the defendant allegedly failed to provide the plaintiff with a proper foreclosure notice, failed to properly identify the underlying debt owner and servicer, refused to allow the plaintiff to reinstate his account after default, unlawfully accelerated the mortgage, and failed to respond to the plaintiff's "qualified written requests" ("QWR's") for information about his mortgage prior to initiating foreclosure proceedings.
• Count III is for violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p. It alleges that the defendant used deceptive practices to collect the amounts due under the loan, including failing to identify the holder of the note and failing to provide requested documentation.
• Count IV is for violation of the Home Affordable Modification Program ("HAMP"). It alleges that the defendant engaged in unlawful "dual tracking, " that is, it pursued foreclosure while it also considered the plaintiff's loan ...

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