United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR
Dennis Saylor, IV United States District Judge.
a dispute over an alleged right to a mortgage modification.
Plaintiff Donnah Nickerson-Reti alleges that she received a
modification to her mortgage loan under the Home Affordable
Mortgage Program (“HAMP”) and made timely
payments on it, but that defendant Bank of America did not
honor the modification. The bank has moved for summary
judgment in its favor. It contends that her claim is without
merit for a variety of reasons, among them that she merely
applied to be considered for a modification; that her
application was properly denied because she did not submit
the required documents; and that no contract between the
parties was ever formed.
yet another installment in the protracted nationwide
litigation over the HAMP program. That litigation has been
notable, among other things, for the widespread disagreement
and confusion among borrowers, lenders, and the courts
concerning the meaning of one of the critical program
documents: the Trial Period Program, or “TPP, ”
agreement. In substance, the Court concludes that the TPP
process is intended to involve three steps leading up to the
formation of a contract to modify a mortgage: (1) an
invitation by a lender to a borrower to make an offer, (2) an
offer by the borrower, and (3) acceptance by the lender. The
attempted arrangement here failed at the third stage, because
the bank never accepted the TPP agreement. Nonetheless, based
on evidence of potential mistakes or misconduct by the bank,
plaintiff's claim under Mass. Gen. Laws ch. 93A will
and for the reasons set forth below, that motion for summary
judgment will be granted in part and denied in part.
where otherwise noted, the following facts are set forth in
the light most favorable to plaintiff.
Nickerson-Reti purchased a property at 133 Burlington St. in
Lexington, Massachusetts, on June 22, 2007, with the help of
a $417, 000 mortgage loan. (Def. SMF Ex. B at 23:5-11,
26:21-23, 48:1-3). She executed a promissory note promising
to repay the debt with 5.625% interest over 30 years and gave
a mortgage as security for the note. (Id. Ex. B at
28:22-23, 48:1-49:14). Her monthly payment was $2, 400.49.
(Id. Ex. B at 48:1-19, 49:6-14).
made timely payments for almost two years, and even made
additional payments in order to bring down the principal.
(Id. Ex. B at 53:19-54:1; Pl. SMF Ex. P). As of the
beginning of 2009, she was current on her payments. She
contends that she could have afforded to continue making them
in the near future, but that her financial situation had
deteriorated. (Def. SMF Ex. B at 64:4-11). She testified
that in the next year or two she would have been required to
apply for public assistance or sell her possessions in order
to make her monthly payments. (Id. Ex. B at
73:11-75:4; see also Id. Ex. B at 64:13-17 (“I
wanted to take a proactive approach and do something to lower
my interest rate and keep things more manageable in case. . .
. My credit rating was over 800, and I wanted to keep it that
did not seek to refinance the loan, or to sell the property
and move somewhere less expensive. Instead, she made an
inquiry to Bank of America about her eligibility for a
modification of her mortgage under the Home Affordable
Mortgage Program (“HAMP”), a program intended to
assist financially struggling homeowners avoid foreclosure.
She made three or four calls for that purpose between
February and April 2009. (Def. SMF Ex. B at 53:15-19).
at that point, Nickerson-Reti was current on her payments. A
representative from Bank of America told her that in order to
be considered for HAMP, she had to miss payments. (Def. SMF
Ex. B at 52:23-24). The representative told her that the bank
would not consider her for a HAMP modification because she
had not missed two months' payments. (Id. Ex. B
at 66:23-67:11). The bank did, however, offer to refinance
her mortgage at ¶ 4% or 4.5% interest rate.
(Id.). Nickerson-Reti declined that offer,
specifically because she wanted her interest rate to be
reduced to 2%, as allegedly promised by the HAMP program.
(Id. Ex. B at 67:24-68:20).
Nickerson-Reti deliberately went into default to try to
qualify for the HAMP program. For “two months, [she]
purposely did not make the mortgage payment, because the
person on the phone at Bank of America told [her] that . . .
it's what [she] needed to do to be considered for a HAMP
modification.” (Id. Ex. B at
wrote a letter to the bank on April 13, 2009, explaining the
“difficult circumstances related to my request for a
Home Affordable Modification to my mortgage.” (Pl. SMF
Ex. R). On April 29, 2009, the bank invited her to apply for
a “workout alternative” and requested a checklist
of certain documents. (Id.). One item on the
checklist requested: “Verification of all sources of
income (including last 30 days of pay stubs). If self
employed, please provide current profit and loss
statements.” (Id.). Nickerson-Reti returned
the checklist at some point with that item checked off, and
the handwritten notation next to it reads “Self
employed. No. profit/loss statements. IRS 1040 sent
previously.” (Id.). Nickerson-Reti apparently
faxed to the bank her May 2009 real-estate tax bill and proof
of her homeowners insurance policy. (Id.). It is not
clear when Nickerson-Reti previously sent her Form 1040, or
specifically what other proof-of-income documents she had
sent at that point.
December 30, 2009, Bank of America sent Nickerson-Reti a
written Loan Modification Trial Period Plan
(“TPP”) package. The cover letter stated:
We recently sent you a letter with instructions on how to
start making your new trial period mortgage payment of $1,
582.16 as part of the three-month trial period under the
Federal Government's Home Affordable Modification
Program. If you haven't already done so, it is important
that you take the first step by making your first month's
trial period mortgage payment as soon as possible.
Making this payment allows you to begin the trial
period while you gather the requested documentation.
If for some reason you are not eligible for the Home
Affordable Modification Program once you've started the
trial period, we will contact you and review other options.
Once you've made your first trial period mortgage
payment, the next step is for you to return the requested
documents and enclosed forms in order to finalize
the three-month trial period and qualify for the permanent
modification of your loan.
Please complete the enclosed documents and return
them with the required financial information by
(Def. SMF Ex. C at 1). Under the TPP, payments in the amount
of $1, 582.16 (reduced from her existing requirement of $2,
400.49) were due on or before February 1, 2010; March 1,
2010; and April 4, 2010. (Id. Ex. C at
package requested, among other things, that Nickerson-Reti
provide a “Tax Information Form-IRS Form 4506-T”
and certain “Additional Income Documentation.”
The requested information included, in relevant part, the
b. For each borrower who is
√ Copy of the most recently filed federal tax return
signed and dated for each borrower with all schedules. . . .
√ Copy of the most recent quarterly or year-to-date
d. For each borrower who is relying on . . .
child support as qualifying income:
√ Copy of divorce decree, separation agreement or other
written agreement or decree that states the amount of the . .
. child support and period of time over which it will be
received. Payments must continue for at least three years to
be considered qualifying income under this program.
√ Proof of full, regular and timely payments; for
example, deposit slips, bank statements, court verification,
or filed federal tax return with all schedules.
(Id. Ex. C at 4).
If I am in compliance with this Trial Period Plan (the
“Plan”) and my representations in Section 1
continue to be true in all material respects, then the
Servicer will provide me with a Home Affordable Modification
Agreement (“Modification Agreement”), as set
forth in Section 3, that would amend and supplement (1) the
Mortgage on the Property, and (2) the Note secured by the
I understand that after I sign and return two copies of this
Plan to the Servicer, the Servicer will send me a signed copy
of this Plan if I qualify for the Offer or will send me
written notice that I do not qualify for the Offer. This
Plan will not take effect unless and until both I and the
Servicer sign it and Servicer provides me with a copy of this
plan with the Servicer's signature.
(Id. Ex. C at 5) (emphasis added). The TPP also
stated that “[i]f I comply with the requirements in
Section 2 and my representations in Section 1 continue to be
true in all material respects, the Servicer will send me a
Modification Agreement for my signature which will modify my
Loan Documents . . . .” (Id. Ex. C at 7).
signed the TPP on January 13, 2010, and returned it to the
bank. (Def. SMF Ex. B at 79:21-80-21; id. Ex. D at
4). Neither party has provided the Court with
Nickerson-Reti's full application. However, her attorney
questioned Chad Anderson, the deposition witness produced by
the bank under Fed.R.Civ.P. 30(b)(6), about the contents of
that application. Anderson acknowledged that Nickerson-Reti
provided the bank with a signed and dated hardship affidavit;
a signed and dated 4506-T form; two signed and dated copies
of the TPP; at least two bank statements from her account at
Eastern Bank; five checks made out to her by her husband,
Kelman Reti, for child support; and a signed 2008 tax return,
including Schedule C, titled “Profit or Loss from
Business.” (Def. SMF Ex. E at 89:14-97:14). Having
reviewed that application, Anderson testified that the only
document that was missing was a copy of the written agreement
stating the amount of child support and the period of time
over which it would be received. (Id. Ex. E at
timely made the three trial-period payments in February,
March, and April, 2010. She continued to make monthly payments
in the amount of $1, 582.16 for more than three and a half
years, until she sold the house. (Def. SMF Ex. B at
83:24-84:10; Pl. SMF Ex. P).
testified that for eight months, Bank of America sent her
statements telling her that she was in the trial modification
period. (Def. SMF Ex. B at 83:2-84:2; see Id. Ex. B
86:16-17 (“I received a signed statement every month
saying they had accepted it.”)).
30, 2010, the bank sent Nickerson-Reti a letter stating that
unable to finalize [her] Home Affordable Modification until
[it] receive[d] the following additional and/or correct and
complete information from each borrower:
• The Request for Modification and Affidavit (RMA)
completed and signed by each borrower
• Signed copy of the most recently filed federal tax
return with all schedules
• Copy of the two most recent pay stubs not more than 90
days old indicating year-to-date earnings (clean and
• If self-employed, copy of the most recent filed
federal tax return with all schedules, and copy of the most
recent quarterly or year-to-date profit/loss statement
• Copy of two most recent bank statements for two
• A signed and dated copy of the IRS form 4506-T or form
(Def. SMF Ex. F at 1).
asked about this document, Nickerson-Reti testified that she
had received many letters like that, but had been told to
ignore them. (Def. SMF Ex. B at 122:5-22). According to
Nickerson-Reti, she provided the bank with the documents it
requested on multiple occasions. She testified that she sent
her personal budget worksheet, a hardship letter, and her tax
return to the bank for the first time in April 2009.
(Id. Ex. B at 71:10-72-17). She stated that her
income came from Social Security, child support payments from
her husband, and some medical consulting. (Id. Ex. B
at 16:18-21, 20:1-14, 21:18-19). Although she was
self-employed as a consulting physician, she stated that she
did not have any quarterly or year-to-date profit/loss
statements, and that she “provided Schedule Cs from tax
returns. That's the only thing I have ever used as such a
statement, and I explained that to somebody on the phone and
they said okay.” (Id. Ex. B at 117:2-7).
July 30, 2010 letter did not refer to missing documentation
relating to child-support income. (See Def. SMF Ex.
F). As to that issue, Nickerson-Reti testified that she was
in fact still married to her husband (although they have been
separated for twenty years) and that there was no court order
or divorce decree concerning the child support; rather, her
husband made payments voluntarily, if erratically.
(Id. Ex. B at 14:2-9, 20:1-21:17).
testified that after she received the July 30 letter, she
sent more documents to the bank. (Id. Ex. B at
122:5-123:7). She testified that the bank repeatedly lost her
application, forcing her to resubmit documents. (Id.
Ex. B at 114:11-13, 184:24-185:9, 189:3-9).
noted, the TPP provided that it would not take effect unless
the bank sent a signed copy of the TPP to Nickerson-Reti. She
acknowledges that she never received a copy signed by the
bank. She nonetheless alleges that a representative of the
bank did in fact sign it. (Def. SMF Ex. B at 82:10-83:24).
The basis for that claim is unclear, and in any event ...