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Saade v. Pennymac Loan Services, LLC

United States District Court, D. Massachusetts

October 17, 2016



          Indira Talwani United States District Court.

         Pro Se Plaintiff Jacques Saade's Second Amended Complaint (“Complaint”) [#56], alleges thirteen causes of action stemming from his attempt to refinance his home mortgage loan. The PennyMac Defendants, [1] Citi Defendants, [2] and Jennifer Kirkwood (“Kirkwood”) have moved to dismiss the complaint in its entirety. Mot. Dismiss [## 59, 74, 82]. A Magistrate Judge issued a Report and Recommendation [#98] recommending that the motions to dismiss be granted. Plaintiff timely filed objections to the Magistrate Judge's report. Verified Obj. (“Obj.”) [#106]. After considering Plaintiff's objections and reviewing the objected to portions of the Report and Recommendation [#98] de novo, the court finds that Plaintiff's objections are without merit. Accordingly the court ADOPTS the Report and Recommendation [#98] and provides the following discussion as to several of the objections raised by Plaintiff.

         A. DISCUSSION

         1. Plaintiff's Objection to the Magistrate Judge's Finding that Count I Failed to State a Claim.

         The Magistrate Judge's Report and Recommendation found that Plaintiff failed to adequately allege facts to support his negligent and intentional misrepresentation claim under Count 1. Plaintiff's Objection argues that Citi Defendants breached Mass. Gen. Laws ch. 93A by falsely assuring him that if he submitted modified monthly payments his home loan would be refinanced. Obj. 5 [#106] (“Plaintiff was instructed and induced to believe that the requisite for refinancing was to make several modified monthly payments, and that making these modified monthly payments will finalize the refinancing after three month[s] of compliance making these payments pursuant to the refinancing agreement, Id. Par. 172. Plaintiff complied with Citi's instruction and made the modified monthly payments pursuant to the agreement.”). Plaintiff avers that he sent modified refinance “trial period” payments pursuant to a refinance agreement, and that Citi Defendants' failure to comply with the agreed upon terms of the refinancing plan constitute an unfair and deceptive trade practice.

The Objection states,
In this instant matter [for] more than a year defendants kept misrepresenting that plaintiff did not provide requested documents for the refinancing review when plaintiff submitted same on countless occasions. In addition, plaintiff was told in person at Hynes Auditorium that he was approved for refinancing, this was another misrepresentation when two days later he was notified by defendant SLS that he was in default and that SLS was pursuing foreclosure proceeding against the plaintiff when he had made more than a year of the agreed upon modified monthly payments- as turned out [] no such refinancing approval. In short these are allegations well pled that demonstrated the defendants' unfair conducts and breach of parties agreements that entitled the plaintiff to relief under ch. 93A.

Obj. 13-14 [#106].

         Reading Plaintiff's allegations liberally, Plaintiff suggests that Count I raises a chapter 93A claim against Citi Defendants for violating the Home Affordable Modification Program (“HAMP”). Under HAMP, home loan servicers assess eligibility for a loan modification using a set of guidelines promulgated by the Treasury Department, and if the borrower meets those criteria, “the guidelines direct the servicer to offer that individual a Trial Period Plan (‘TPP')” as a precursor to obtaining a permanent modification.” Young v. Wells Fargo Bank, N.A., 717 F.3d 224, 228 (1st Cir. 2013) (quoting Markle v. HSBC Mortg. Corp. (USA), 844 F.Supp.2d 172, 177 (D.Mass.2011)). If the borrower makes the required monthly payments, provides the necessary documentation, and maintains eligibility, the guidelines state that the servicer should offer the borrower a permanent loan modification. Id. at 229. Courts have found that a violation of HAMP that is itself unfair or deceptive can create liability under Chapter 93A. Newell v. America's Serv. Co., 2013 WL 4805060, * (D. Mass. Sept. 9, 2013) (“In evaluating Chapter 93A claims premised on violations of the HAMP guidelines, sessions of this court have routinely held that a viable Chapter 93A claim will lie only if the activity would be independently actionable under 93A as unfair or deceptive.”); Speleos v. BAC Home Loans Serv., L.P., 824, F.Supp.2d 226, 234 (D.Mass. 2011) (“A violation of HAMP that is unfair or deceptive in and of itself can, therefore, create a viable claim under Chapter 93A.”). The Trial Period Plan contemplated by HAMP are uniform, four page agreements, executed by servicers and borrowers. Stagikas v. Saxon Mortg. Services, Inc., 795 F.Supp.2d 129, 133 (D. Mass. 2011); Durmic v. J.P. Morgan Chase Bank, NA, 2010 WL 4825632, *3 (D. Mass. Nov. 24, 2010) (“The TPP is a Fannie Mae/Freddie Mac ‘Uniform Instrument' that has the appearances of a contract.'”).

         Plaintiff's attempt to fit his allegations into this framework fails. Plaintiff's pleadings do not allege that the parties executed a written Trial Period Plan or other written agreement related to the modified monthly payments. An oral agreement made by Citi Defendants and Plaintiff concerning modified monthly payments is not enforceable. Under Mass. Gen. Laws ch. 259 § 1, any agreement concerning a mortgage, including a modification of the loan terms, must be in writing. See French v. Chase Bank, N.A., 2012 WL 273724, *2 (D. Mass. Jan. 31, 2012). Plaintiff's allegations that he relied on Defendants' statements and submitted modified payments so that his loan would be modified is insufficient under Chapter 93A to state a cause of action. There must also be some allegation that the parties executed a written contract concerning the modified payments. Finding no such allegation in any of Plaintiffs' pleadings, the court agrees with the Report and Recommendation [#98], and finds that Plaintiff's claims under Count 1 shall be dismissed.

         2. Plaintiff's Objection to the Magistrate Judge's Finding that Count V Failed to State a Claim.

         The Magistrate Judge's Report and Recommendation recommended dismissing Plaintiff's Fair Credit Reporting Act claim against Specialized Loan Servicing, LLC (“SLS”) because Plaintiff failed to specify the section of the Fair Credit Reporting Act that was violated, and because he failed to allege facts showing how the Act was violated. R&R 18 [#98]. In his Objection, Plaintiff argues that SLS did not have a lawful right to report Plaintiff to credit reporting agencies, and that the information SLS provided regarding Plaintiff was inaccurate in violation of 15 U.S.C. § 1681s-2(a)(1)(A) and § 1681s-2(a)(1)(B). Obj. 27 [#106]. Plaintiff's claim is barred, however, because furnishers' liability for reporting inaccurate credit information was expressly limited by Congress in the Fair Credit Reporting Act. 15 U.S.C. § 1681s-2(c)(1); Chiang v. Verizon New England, Inc., 595 F.3d 26, 35 (1st Cir. 2010) (noting that Congress expressly limited furnishers' liability by prohibiting private suits and that consumers have no private right of action if the furnisher does not reasonably investigate a consumer's claim despite direct notification from the consumer); Cunha v. LVNV Funding, LLC, 2015 WL 5737134, *3 (D. Mass. Sept. 30, 2015) (“Section 1681s-2 does not provide a private right of action to consumers who dispute credit information directly with a furnisher of information.”). While Plaintiff argues that he disputed SLS' furnishing of inaccurate credit information, there is no private right of action even if SLS did not follow up on Plaintiff's dispute. Id.

         Plaintiff's argument that he seeks to recover under Mass. Gen. Laws ch. 93A for SLS's alleged violation of the Fair Credit Reporting Act is also unavailing. The Fair Credit Reporting Act specifically preempts state law. “No requirement or prohibition may be imposed under the laws of any State . . . with respect to any subject matter regulated under 1681s-2.” 15 U.S.C. § 1681t(b)(1)(F). Thus, to the extent that Plaintiff seeks to allege a chapter 93A claim based on a violation of the Fair Credit Reporting Act, this claim is pre-empted. Cunha, 2015 WL 5737134 at *5 (“To the extent [plaintiff's] Chapter 93A claim is premised on an unfair credit reporting, failure to correct credit information, or failure to investigate a disputed debt, it is pre-empted by the FRCA.”); Catanzaro v. Experian Info. Sol., Inc., 671 F.Supp.2d 256, 262 (D. Mass. 2009) (“[B]ecause the Court will not sanction the use of Chapter 93A as a end run around state and federal statutory schemes, it finds that plaintiff's Chapter 93A claims are preempted.”). Accordingly, the Court agrees with the recommendation that Plaintiff's claims under Count V shall be dismissed.

         3. Plaintiff's Objection to the Magistrate Judge's Finding that ...

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