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Shea v. Ditech Financial LLC

United States District Court, D. Massachusetts

September 22, 2016

KAREN M. SHEA, Plaintiff,


          Nathaniel M. Gorton United States District Judge

         Plaintiff Karen M. Shea (“Shea”) brought this action against Ditech Financial LLC (“Ditech”), a former assignee of a mortgage granting a security interest in Shea's residence, and Wilmington Savings Fund Society, FSB DBA Christina Trust (“Wilmington”), the current assignee of that mortgage. Pending before the Court is plaintiff's motion for a preliminary injunction to restrain defendants from conducting a scheduled foreclosure sale on the residence. For the reasons that follow, the motion for a preliminary injunction will be denied.

         I. Background and Procedural History

         In October, 1996, Shea and then-husband Patrick Shea took title to property located at 145 Jericho Road, Scituate, Massachusetts (“the Property”). In March, 2006, Plaintiff and her husband refinanced their mortgage with a $400, 000 loan from Mt. Washington Cooperative Bank. The mortgage was assigned to the Mortgage Electronic Registration System (“MERS”) the same day. In December, 2008, MERS reassigned the mortgage to Countrywide Home Loans Servicing LP (“Countrywide”). Countrywide was later succeeded by BAC Home Loans Servicing, LP (“BAC”).

         In 2009, Shea began experiencing difficulty making payments on the loan and contacted BAC but was told that she would not be offered assistance until she was at least two months in arrears on her payments. Shea later fell behind in her payments and BAC commenced foreclosure proceedings. On July 19, 2009 BAC entered into a Forbearance Agreement with Shea under the Fannie Mae Homesaver Program. Under the terms of the Forbearance Agreement, Shea was required to make monthly payments in the amount of $1, 661.31, exactly half of her prescribed monthly payment, for six months commencing on July 19, 2009 and ending on January 1, 2010.

         According to Shea, she made each of the payments required under the Forbearance Agreement on time. At the end of the six-month agreement period, she claims, she was instructed by BAC to continue making monthly payments in the amount agreed to under the Forbearance Agreement. Although Shea purportedly continued to make payments, on May 14, 2010, BAC sent Shea a Notice of Intention to Foreclose which gave her 30 days to cure an alleged default of nearly $80, 000. Shea continued to make payments through July 20, 2010, but thereafter BAC stopped accepting her payments. She has made no further mortgage payments since then.

         Shea and her husband conveyed a deed for the Property to Shea on December 15, 2010 pursuant to a divorce agreement. On February 3, 2014 Countrywide assigned the mortgage to Green Tree Servicing, LLC (“Green Tree”), which changed its name to Ditech Financial LLC in August, 2015.

         On April 28, 2016 plaintiff commenced this action by filing a complaint in the Massachusetts Superior Court for Plymouth County. Defendant removed the action to federal court on July 18, 2016 and, one week later, filed a motion to dismiss the complaint which is currently pending. On July 27, 2016 Ditech sent Shea a Notice of Mortgagee's Sale of Real Estate stating that the Property would be sold at foreclosure auction on August 26, 2016. Two days later, Ditech assigned Shea's mortgage to Wilmington. On August 11, 2016, after receiving the Notice of Mortgagee's Sale of Real Estate, plaintiff filed the motion for a preliminary injunction which is currently before the Court. The Court allowed plaintiff's motion to amend her complaint to add Wilmington as a party on August 17, 2016.

         That same day, the Court held a hearing on the motion for a preliminary injunction after which it announced that it would hold the motion in abeyance until September 21, 2016. The Court instructed Wilmington to postpone the foreclosure sale until after that date and to use the intervening time to attempt to resolve the dispute. Because the parties have failed to do so, the Court will proceed to decide the motion on the merits.

         IV. Plaintiff's Motion for a Preliminary Injunction

         Plaintiff moves the Court for a preliminary injunction restraining Wilmington from conducting a mortgage foreclosure sale and from otherwise enforcing the Power of Sale contained in the mortgage agreement.

         A. Legal Standard

         In order to obtain a preliminary injunction, the moving party must establish 1) a reasonable likelihood of success on the merits, 2) the potential for irreparable harm if the injunction is withheld, 3) a favorable balance of hardships and 4) the effect on the public interest. Jean v. Mass. State Police, 492 F.3d 24, 26-27 (1st Cir. 2007). Out of these factors, the likelihood of success on the merits “normally weighs heaviest in the decisional scales.” Coquico, Inc. v. Rodriguez-Miranda, 562 F.3d 62, 66 (1st Cir. 2009).

         The Court may accept as true “well-pleaded allegations [in the complaint] and uncontroverted affidavits.” Rohm & Haas Elec. Materials, LLC v. Elec. Circuits, 759 F.Supp.2d 110, 114, n.2 (D. Mass. 2010) (quoting Elrod v. Burns, 427 U.S. 347, 350, n.1 (1976)). The Court may also rely on otherwise inadmissible evidence, including hearsay, in deciding a motion for preliminary injunction. See Asseo v. Pan American Grain Co., Inc., 805 F.2d 23, 26 (1st Cir. 1986). Ultimately, the issuance of preliminary injunctive relief is “an extraordinary and drastic remedy that is never awarded as of right.” Peoples Fed. Sav. ...

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