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Harry v. Countrywide Home Loans Inc.

United States District Court, D. Massachusetts

October 18, 2016

THOMAS HARRY JR. and GRETCHEN C. HARRY, Plaintiffs,
v.
COUNTRYWIDE HOME LOANS INC., et al. Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This case arises from the possible foreclosure of the property located at 89 Pimlico Pond, Mashpee, Massachusetts (“the property”). Plaintiff's amended emergency motion for a temporary restraining order or injunctive relief is pending before the Court.

         I. Background

         Thomas Harry, Jr. and Gretchen Harry (collectively “plaintiffs”) took title to the property in 2002. In November, 2005, plaintiffs refinanced their mortgage with a loan of approximately $245, 000 from Countrywide Home Loans, Inc. (“Countrywide”) that was secured by a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”). Bank of America, N.A. (“BANA”) was the original servicer of the loan. In October, 2011, MERS assigned the mortgage to the Bank of New York Mellon, f/k/a the Bank of New York as Trustee for the Certificate holders of CWABS, Inc. Asset-backed Certificates, Series 2005-17 (“BNY Mellon”) which then retained Ditech Financial, LLC, f/k/a Green Tree Servicing, LLC (“Ditech”) to service the loan.

         In plaintiffs' view, Countrywide engaged in predatory lending practices by filling out the loan application without input from plaintiffs and because it knew that plaintiffs lacked sufficient income or assets to warrant the refinancing. Plaintiffs further allege that Countrywide used bait and switch tactics regarding the interest rate and that they were never notified of their right to rescind. Plaintiffs submit that they made payments on the note from January, 2006 through November, 2009.

         In August, 2011, plaintiffs received a letter from Harmon Law Offices (“Harmon”) which stated that Harmon had been instructed to foreclose on their property on behalf of BNY Mellon. In November, 2011, Harmon filed a complaint on behalf of BNY Mellon in the Massachusetts Land Court Department of the Trial Court. Plaintiffs acknowledge that by at least December, 2011 they were represented by counsel.

         In February, 2014, Ditech provided plaintiffs with a notice of default. In March, 2015, Harmon again notified plaintiffs that it was going to foreclose on the property on behalf of BNY Mellon and Ditech. On March 20, 2015, plaintiffs sent a notice of rescission under TILA, 15 U.S.C. § 1635.

         Then in September, 2015 Harmon yet again served plaintiffs with a notice of foreclosure, and in March, 2016 plaintiffs filed a complaint in Massachusetts Superior Court seeking, inter alia, quiet title, to have the note declared null and void, to have the mortgage “released” (presumably meaning discharged), to have their TILA rescission enforced and to recover damages. The Massachusetts Superior Court allowed an ex parte motion for the filing of a lis pendens that same month. In April, 2016 defendants BANA, Countrywide and Bank of America Corporation (“BAC”) removed the case to the United States District Court for the District of Massachusetts on the basis of federal question jurisdiction.

         On or about September 27, 2016, Ditech issued a notice of foreclosure sale to plaintiffs. On October 14, 2016, plaintiffs filed an emergency motion for a temporary restraining order or preliminary injunction to prevent Harmon, which is not a named party, from selling the property. On October 17, 2016, plaintiffs filed an amended motion asking the Court to enjoin BNY Mellon and Ditech instead of Harmon. That motion on which a hearing was held on October 18, 2016 is the subject of this memorandum and order.

         II. Plaintiff's Motion for a Preliminary Injunction

         Plaintiffs move for a preliminary injunction to prevent the mortgage foreclosure sale of the property.

         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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