United States District Court, D. Massachusetts
ROBERT J. SEARLE and SUSAN SEARLE, Plaintiffs,
RBS CITIZENS, N.A., DITECH GREENTREE FINANCIAL, and HARMON LAW OFFICES, P.C., Defendants.
MEMORANDUM AND ORDER ON MOTION FOR PRELIMINARY
INJUNCTION AND MOTION TO DISMISS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
Robert and Susan Searle bring this action against RBS
Citizens, N.A. (“Citizens”) and Ditech Financial
LLC, formerly known as Green Tree Servicing LLC
(“Ditech/Green Tree”) (collectively
“Defendants”), in an attempt to avert the
foreclosure of their home located at 9 Prospect St.,
Merrimac, Massachusetts. Plaintiffs claim that Defendants
failed to respond to their requests to produce certain
documents related to the mortgage, and thus violated (1) the
Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. § 2605(e)(1)(A) and (B), and Regulation X at
24 C.F.R. § 3500; (2) the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. § 1692(a); and (3)
the Truth in Lending Act (“TILA”), 15 U.S.C.
§ 1640(a)(1) and (2). [ECF No. 19]. Currently pending
are Plaintiffs' motion for leave to file a Second Amended
Complaint and motion for a preliminary injunction to prevent
the foreclosure of the property, and Defendants' motion
to dismiss. [ECF Nos. 21, 22, 26].
reasons stated herein, the motion for leave to file a Second
Amended Complaint and motion to dismiss [ECF Nos. 21, 22] are
GRANTED and the motion for a preliminary injunction
[ECF No. 26] is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
10, 2005, Plaintiffs took out a $50, 000 home equity line of
credit from First Horizon Home Loan Corporation.
[ECF Nos. 26 at 1, 26-1 at 23]. The line of credit served as a
second lien behind their original mortgage. [ECF No. 26-1 at
2]. The agreement that governed the line of credit stipulated
that the initial interest rate would be 6.5%, with a
five-year draw period. After the end of the draw period, the
loan would go into a fifteen year repayment period with a
fixed interest rate, during which time the Plaintiffs were to
make a monthly payment of principal plus interest. [ECF No.
26 at 1].
allege that as the end of the draw period approached, they
realized that their new payment was not going to be
affordable. [ECF No. 26 at 1]. By then, Plaintiffs had both
lost their jobs and were struggling financially due to their
reduction in income. Id. Because of this, for the
first ten months after the loan converted to a fixed rate
loan, they continued to make “interest only”
payments, even though the agreement required them to pay
interest plus principal. Id. Along with each
“interest only” payment made over the ten-month
period, Plaintiffs sent letters to the lender, Citizens,
the servicer at that time, Green Tree,  requesting a loan
modification. [ECF Nos. 26-1 at 1-4, 26-2 at 25]. After ten
months, the servicer sent a letter to Plaintiffs stating that
it “would no longer accept [the] ‘interest
only' payments and would foreclose on [Plaintiffs'
property] if [they] did not pay the monthly [p]rincipal and
[i]nterest payment they had requested.” [ECF No. 26-1
at 2]. Plaintiffs were persistent in their efforts to
research and request a loan modification, including making
daily inquiries over a period of several months. Id.
at 2-3. Plaintiffs assert that eventually, the servicer
advised them that it does not make loan modifications. [ECF
Nos. 26 at 2, 26-2 at 17, 29].
early 2012, Plaintiffs sought the help of the Massachusetts
Attorney General's Office, and over the next year, that
office assisted Plaintiffs in their efforts to obtain a
modification by coordinating communication with Green Tree.
[ECF Nos. 26 at 2, 26-1 at 20-22, 26-2 at 11-13, 16]. After
some back and forth, Plaintiffs were able to obtain a
modification. [ECF No. 26-1 at 3]. In early April 2012, Green
Tree sent Plaintiffs documents to modify the interest rate
and extend the maturity date of the loan by eighteen months
(“the Modification Agreement”). [ECF No. 26 at 3,
26-2 at 2-9 ]. Plaintiffs claim that, when they reviewed the
documents, they realized that the interest rate would
actually go up, it was not clear what the monthly payment
would be, and the documents were otherwise
“shoddy” and “inconsistent.” [ECF No.
26-1 at 2-5]. Despite these concerns, however, Plaintiffs
signed the Modification Agreement on April 19, 2012. [ECF No.
21-5 at 3].
Plaintiffs wrote four letters, which they believed to be
“Qualified Written Requests” under RESPA, from
November 9, 2014 to November 4, 2016. [ECF Nos. 26 at 4, 26-2
at 2-9]. Plaintiffs sent copies of each letter to the lender,
Citizens, and to the servicer. Id. Plaintiffs
believed that Citizens and Ditech/Green Tree did not have the
legal right to collect payments. In a letter to Green Tree,
dated March 28, 2015, Plaintiffs requested, among other
• “copies of ALL documents since consummation of
the loan to further insure a Validation of Debt with also a
Request for Accounting;”
• “an itemized accounting of the ‘Corporate
Advances' that have been accumulating on each monthly
statement and where they derive;”
• “any and all reference to ‘insurance'
and costs associated with insurance and/or taxes;” and
• “validation of who owns the note and . . . a
copy of same along with copy of the assignments from the
original note holder to the current note holder.”
[ECF No. 26-2 at 5]. On that same date, Plaintiffs requested
similar documents from Citizens.Id. at 3-4.
Plaintiffs allege that Defendant “failed to comply on
all requests, ” though they also acknowledge that they
received replies that contained monthly statements and a
“spreadsheet accounting.” [ECF No. 26 at 4].
complaint states that Ditech became the servicer of the loan
in late 2015. Id. at 8. The complaint does not
describe the relationship between Green Tree and Ditech, or
assert that servicing rights were transferred from Green Tree
to Ditech. Defendants clarify that Ditech previously did
business under the name “Green Tree Servicing”
[ECF No. 21 at 1-2], which Plaintiffs do not dispute.
contend that they have suffered financially and have been
kept in “foreclosure status” for the past seven
years. [ECF No. 26 at 9]. They claim that “[c]ontinuing
to avoid compliance with this request for pertinent documents
has damaged [them] and continues to keep them from moving
forward in obtaining financing elsewhere due to the
‘Foreclosure Status' they are forced to remain
in.” Id. at 5. Additionally, Plaintiffs allege
that Defendants have “threaten[ed] to foreclose on the
property, and provide[d] foreclosure auction dates that
encourage the public to visit their home to take
pictures.” [ECF No. 26-1 at 3]. Furthermore, Plaintiffs
assert that many individuals have approached the house,
knocked on the door, and asked if they can buy the house,
which Plaintiffs claim is a violation of their right to quiet
March 6, 2017, Plaintiffs filed their initial complaint and
motion for preliminary injunction in Essex Superior Court,
which requested that the court enjoin Defendants from
conducting a foreclosure sale of the property. [ECF No. 28 at
2-3]. On March 15, 2017, Defendants removed the case to this
Court [ECF No. 1], and on April 5, 2017, they filed a motion
to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to
state a claim [ECF No. 9].
23, 2017, with leave of the court, Plaintiffs filed an
amended complaint and motion for preliminary injunction. [ECF
No. 19]. On July 1, 2017, Defendants filed a motion to
dismiss the amended complaint. [ECF No. 21]. On August 2,
2017, Plaintiffs moved for leave to file a second amended
complaint. [ECF No. 22]. On August 30, 2017, Plaintiffs filed
their proposed second amended complaint and another motion
for a preliminary injunction. [ECF No. 26]. On September 11,
2017, Defendants filed a supplemental opposition to