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Fisher v. HSBC Bank

United States District Court, D. Massachusetts

September 17, 2018

Denise Fisher f/k/a Denise Santry Plaintiff,
HSBC Bank as Trustee et al. Defendants.



         This dispute arises from a Home Affordable Modification Program (“HAMP”) Trial Period Plan with respect to a mortgage on real estate located on Revere Street in Hull, Massachusetts (“the Property”). Denise Fisher (“plaintiff” or “Fisher”) alleges that HSBC Bank, USA, N.A. as trustee for the holders of Deutsche Mortgage Securities Trust Mortgage Pass Through Certificates Series 2004-2 (“HSBC Bank”) and its predecessor in interest Bank of America, N.A. (“BANA”) breached a contract in which they agreed to consider a loan modification if certain conditions were met. In addition to the bank defendants, Fisher brings this action against Ocwen Loan Servicing LLC (“Ocwen”), the current servicer of her loan. Pending before the Court are separate motions of 1) BANA and 2) HSBC Bank and Ocwen to dismiss the complaint.

         I. Background

         Denise Fisher originally acquired title to real estate located on Revere Street in Hull, Massachusetts in 1986. She became the sole owner of the property in December, 1992. In November, 2003, Fisher executed a promissory note in favor of Greenpoint Mortgage Funding Inc. (“Greenpoint”) to evidence a loan (“the note”). On that same date, as security for repayment of the note, Fisher granted a mortgage lien to Mortgage Electronic Registration Systems, Inc. as nominee for Greenpoint (“the mortgage”). In November, 2011, the mortgage was assigned to HSBC Bank. Ocwen became the loan servicer in or about December, 2013.

         In late 2009, Fisher received a HAMP Trial Period Plan (“TPP”) package from BANA, the loan servicer before Ocwen. The TPP provides that Ms. Fisher would make three payments on or before January 1, February 1 and March 1, 2010, respectively. The plan also provides that the trial period began on January 1, 2010, and would end on the earlier of the first day of the month following the month in which the last TPP payment is due or the termination of the plan.

         Different sections of the TPP bear on the parties' divergent arguments so it is appropriate to include those sections in their entirety:

         Section 2.F

If prior to the Modification Effective Date [April 1, 2010], (i) the Servicer does not provide me a fully executed copy of this plan and the Modification Agreement; (ii) I have not made the Trial Period payments required under Section 2 of the Plan; or (iii) the Servicer determines that my representations in Section 1 are no longer true and correct, the Loan Documents will not be modified and this Plan will terminate. In this event, the Servicer will have all of the rights and remedies provided by the Loan Documents, and any payment I make under this Plan shall be applied to amounts I owe under the Loan Documents and shall not be refunded to me.
Section 2.G
I understand that the Plan is not a modification of the Loan Documents and that the Loan Documents will not be modified unless and until (i) I meet all of the conditions required for modification, (ii) I received a fully executed copy of a Modification Agreement, and (iii) the Modification Effective Date [April 1, 2010] has passed. I further understand and agree that the Servicer will not be obligated or bound to make any modification of the Loan Documents if I fail to meet any one of the requirements under this Plan. . . .
Section 3
Once Servicer is able to determine the final amounts of unpaid interest and any other delinquent amounts (except late charges) to be added to my loan balance and after deducting from my loan balance any remaining money held at the end of the Trial Period under Section 2.D, above, the Servicer will determine the new payment amount. If 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 as necessary to reflect this new payment amount and waive any unpaid late charged accrued to date.

         The TPP agreement was signed by Fisher in December, 2009, and she began making TPP payments in January, 2010.[1] BANA did not send a loan modification agreement after the three-month trial period concluded. Fisher alleges that she was “directed by a Bank of America Representative to continue sending in her payments” in the modified amount and that she did so, until September, 2011. The complaint asserts that Fisher considered filing for bankruptcy but decided not to because she believed she would receive a loan modification. Fisher claims that she timely made 18 consecutive monthly payments and that BANA accepted those payments until September, 2011, when BANA sent back the payment she made that month enclosed with a written letter.

         Fisher inquired into why she did not receive a modification agreement from BANA. In early 2012 she received several letters from BANA that informed her that Wells Fargo was her “investor”. In a subsequent conversation, a BANA Customer Relationship Manager notified Fisher that her modification was denied “because her investor did not participate in HAMP” [the Home Affordable Modification Program]. In March, 2012, Fisher received a letter from BANA that stated that she did not qualify for a loan modification because “her only source of income was unemployment benefits.” She maintains that statement was inaccurate and that her HAMP application specified that she was gainfully employed.

         Plaintiff alleges that HSBC and BANA breached an oral promise to modify her payment schedule and that BANA and its successors in interest should be estopped from denying the loan modification. She also seeks a declaratory judgment that a loan modification occurred and that it would be unfair and inequitable for HSBC to be permitted to foreclose on the Property.

         Fisher filed this action in the Massachusetts Superior Court for Plymouth County in September, 2017, and amended her complaint in November, 2017. HSBC and Ocwen ...

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