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Dorita AJA v. Ocwen Loan Servicing LLC

United States District Court, D. Massachusetts

November 30, 2017

DORITA AJA, Plaintiff,



         This is a dispute concerning a mortgage. Plaintiff Dorita Aja has been in default on a mortgage-on a property that is not her principal residence-for approximately eight years. Defendant Ocwen Loan Servicing, LLC is the current servicer of the note. Aja has brought suit against Ocwen under state law to void the mortgage, recover damages, and enjoin any potential foreclosure. Both parties have moved for summary judgment, and Ocwen has also moved to strike certain paragraphs of Aja's affidavits in support of her motion for summary judgment. For the following reasons, the motions to strike will be denied as moot, plaintiff's motion for summary judgment will be denied, and defendant's motion for summary judgment will be granted.

         I. Background

         The following facts are as set forth in the record.

         A. Factual Background

         Plaintiff Dorita Aja owns property located at 22.5 Sigourney Street, Unit F in Jamaica Plain, Massachusetts (the “property”). (Compl. ¶ 4). She does not reside in the property. (Pl.'s SMF ¶ 7). On December 20, 2004, she mortgaged the property for the original principal amount of $362, 500. (Docket No. 86, Ex. G). The annual interest rate of the note was 6.85%, resulting in required monthly payments of $2, 375.31. (Id.).

         The initial owner of the note was Shamrock Financial, a Rhode Island corporation. (Id.). Shamrock Financial assigned the mortgage to Option One Mortgage Co. (Docket No. 86, Ex. I). The mortgage was recorded with the Suffolk County Registry of Deeds on December 27, 2004. (Def.'s SMF ¶ 3). On March 3, 2008, Option One assigned the mortgage to Wells Fargo as trustee for “MASTR Asset Backed Securities Trust 2005-OPT1”; the assignment was recorded with the Registry of Deeds on March 7, 2008. (Docket No. 86, Ex. J). The 2008 assignment was signed by Topako Love, who purported to be the Assistant Secretary of Option One. (Id.). A minor correction to the name of the mortgagee was made on October 24, 2012. (Docket No. 86, Ex. K; Def.'s SMF ¶ 6).

         Aja has been in default on her payment obligations since at least early 2010. (Pl.'s Affidavit in Support ¶ 6).[1]

         In 2008, the Massachusetts Attorney General brought proceedings against Option One (later renamed Sand Canyon) and its loan servicer American Home Mortgage Servicing, Inc. (“AHMSI”), for predatory and discriminatory lending practices. (Docket No. 93, Ex. L). On August 8, 2011, Option One entered into a consent judgment where it agreed to various forms of monetary and injunctive relief. (Id.; Def.'s SMF ¶ 9). Option One promised to modify certain loans after the consent judgment's effective date of November 6, 2011. (Docket No. 93, Ex. L; Def.'s SMF ¶ 10). As relevant here, loans originated by Option One and serviced by AHMSI were eligible for modification provided that they were secured by property that (1) was located in Massachusetts, (2) occupied by the owner, and (3) the owner's primary residence. (Def.'s SMF ¶ 11).[2]

         There is no record of any representative of Option One, AHMSI, or Ocwen contacting Aja concerning the 2011 consent judgment. However, in a letter dated August 25, 2011, AHMSI notified Aja that it was “currently gathering information to determine if [she was] eligible for the Home Affordable Modification Program (HAMP).” (Docket No. 90, Ex. 1 at 91). Aja apparently provided some information to AHMSI, because on March 21, 2012, AHMSI sent another letter to Aja informing her that the information package she sent was incomplete and that she would need to send additional information concerning her finances. (Id. at 87). Aja apparently sent the requested information. However, on April 11, 2012, AHMSI notified Aja that she was ineligible for a HAMP modification because the property was not her principal residence. (Id. at 98).

         Ocwen replaced AHMSI as the loan servicer on February 19, 2013. (Def.'s SMF ¶ 17). On March 3, 2015, Ocwen mailed Aja a letter providing a “Shared Appreciation Modification” offer. (Docket No. 90, Ex. 1 at 107). The enclosed “Frequently Asked Questions” section stated that she was eligible for the modification because (1) her property was “underwater, ” as she owed more than the property was worth, and (2) she did not qualify for HAMP. (Id. at 109). To qualify, Aja would have to make an initial monthly payment of $2, 052.90 by April 1, 2015. (Id. at 107). Under the terms of the Shared Appreciation Modification offer, Ocwen would categorize $32, 191.08 of Aja's outstanding balance as “deferred principal” as to which Aja would not owe any interest. (Id. at 111). The deferred principal balance would also be eligible for debt forgiveness over the next three years. (Id.). The interest rate on the remaining balance of $501, 992.26 would further be reduced to 2.21528% per year. (Id.). In exchange, Aja would have to remit 25% of any future appreciation in the property's value to Ocwen, capped at the amount of principal forgiveness of $32, 191.08. (Id. at 112). There would also be a “balloon payment” due in 2035. (Id. at 116).

         Aja never made the April 1, 2015 payment, and thus never accepted the Shared Appreciation Modification offer.

         On July 20, 2015, Aja's then-attorney David Zak mailed a demand letter to Ocwen pursuant to Mass. Gen. Laws ch. 93A.[3] The demand letter requested that Ocwen grant a principal balance reduction of $184, 183, which the letter characterized as lost equity. (Compl. Ex. A at 3). The letter alleged multiple violations of Chapter 93A by Ocwen, Option One, and AHMSI. (Id. at 1-4). Ocwen's counsel replied on October 13, 2015, denying any violation of Chapter 93A. (Docket No. 90, Ex. 2 at 19). Nevertheless, the reply included a settlement offer. By that date, the outstanding balance on Aja's account had increased to $549, 774.67. (Id. at 22).[4] Ocwen's settlement offer would reduce the balance to $536, 000 and lower the interest rate to 3.9%; there would also be a balloon payment of $378, 306.60 due in 2035. (Id.).

         Aja did not accept the settlement offer, instead electing to file suit.

         B. Procedural Background

         Aja filed suit on December 3, 2015, in the Suffolk County Superior Court. Her complaint asserts five counts: violation of Mass. Gen. Laws ch. 266, § 35A (Count 1); violation of Mass. Gen. Laws ch. 267, § 1 (Count 2); an action to quiet title under Mass. Gen. Laws ch. 240, § 1 (Count 3); violation of Chapter 93A with respect to the HAMP modification process (Count 4); and violation of Chapter 93A with respect to the Shared Appreciation Modification and Chapter 93A offers (Count 5). Ocwen removed the action to this Court on January 5, 2016. Both parties have moved for summary judgment, and Ocwen has also moved to strike portions of two of Aja's affidavits in support of her motion.

         II. Legal Standard

         The role of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990)). Summary judgment is appropriate when the moving party shows that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue is “one that must be decided at trial because the evidence, viewed in the light most flattering to the nonmovant, would permit a rational fact finder to resolve the issue in favor of either party.” Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (citation omitted). In evaluating a summary judgment motion, the court indulges all reasonable inferences in favor of the nonmoving party. See O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). When “a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quotations omitted). The nonmoving party may not simply “rest upon mere allegation or denials of his pleading, ” but instead must “present affirmative evidence.” Id. at 256-57.

         III. Motions to Strike

         Defendant has moved to strike certain paragraphs to plaintiff's affidavits in support of her motion for summary judgment. Because the Court will not rely on the disputed paragraphs in deciding the cross-motions for ...

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