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Donahue v. Federal National Mortgage Association

United States District Court, D. Massachusetts

May 20, 2019

JOSEPHINE B. DONAHUE, Plaintiff,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION AND OCWEN LOAN SERVICING, LLC, Defendants.

          MEMORANDUM AND ORDER

          Denise J. Casper United States District Judge

         I. Introduction

         Plaintiff Josephine Donahue (“Donahue”) has filed this lawsuit against Defendants Federal National Mortgage Association and Ocwen Loan Servicing, LLC (“Ocwen”) (collectively, “Defendants”) alleging violations of Mass. Gen. L. c. 183, § 32 and Mass. Gen. L. 183, § 4 (Count I), breach of the duty of good faith and reasonable diligence (Count II) and breach of contract and the covenant of good faith and fair dealing (Count III). D. 1-1. Ocwen has moved for summary judgment. D. 37. For the reasons stated below, the Court ALLOWS the motion.

         II. Standard of Review

         The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law.” Santiago-Ramos v. Centennial PR. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (quoting Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). The movant “bears the burden of demonstrating the absence of a genuine issue of material fact.” Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000); see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in her pleadings, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986), but “must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor, ” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). “As a general rule, that requires the production of evidence that is ‘significant[ly] probative.'” Id. (quoting Anderson, 477 U.S. at 249) (alteration in original). The Court “view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor.” Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009).

         III. Factual Background

         The following facts are undisputed unless indicated otherwise. On or about June 22, 2010, Donahue executed a mortgage (the “Mortgage”) in the amount of $484, 330.00 to Reliant Mortgage Company, LLC (“Reliant”) relating to real property located in Scituate, Massachusetts (the “Property”). D. 39 ¶ 1; D. 39-1; D. 45 at 1. Ocwen began servicing the Mortgage in February 2013. D. 39-6 ¶ 8. On June 10, 2014, the Mortgage was assigned from Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Reliant, to Ocwen. D. 39 ¶ 2; D. 39-3; D. 45 at 2.

         In or around April 2014, Donahue made a verbal request for mortgage assistance from Ocwen, which Ocwen acknowledged in a letter dated April 28, 2014. D. 39-8; D. 45 at 4. The letter explained that Ocwen required a complete copy of an attached “Financial Analysis Package” by June 29, 2014 from Donahue to process her request. D. 39-8 at 2; see D. 39-2 at 6. The parties dispute whether Donahue submitted the required financial information. Compare D. 39 ¶ 11, with D. 45 at 4-5.

         Donahue first defaulted on her loan payments under the Mortgage in or around September 2014. D. 39 at 3 n.1; D. 45 at 3; D. 47 ¶ 16; D. 47-3. Between September 2014 and January 2015, Defendants did not send any correspondence to Donahue about the opportunity for a face-to-face meeting. D. 47 ¶ 16; D. 39-6 ¶ 20 (referring to October 28, 2015 face-to-face letter as Ocwen's “First” HUD Face-to-Face Letter). Ocwen did, however, send Donahue a 150-day notice of a right to cure the mortgage default on November 14, 2014. D. 39 ¶ 12; D. 47-3; see D. 47 ¶ 16. As of the time of the November 14th letter, Donahue had failed to make her monthly loan payments for September, October or November 2014. D. 47-3 at 2. Before 150 days had passed, in January 2015, Donahue made the outstanding payments on the Mortgage, D. 47 ¶ 16, and Ocwen reinstated the loan, D. 39 at 3 n.1; D. 45 at 3.

         In March 2015, Donahue again defaulted on the Mortgage. D. 39 ¶ 7; D. 47 ¶ 17. In April 2015, Donahue entered into a “Temporary Repayment Agreement” with Ocwen. D. 39 ¶ 14; D. 39-10; D. 45 at 6. It is undisputed that Donahue failed to make any payments under the Agreement. D. 39 ¶ 15; D. 45 at 6. On May 28, 2015, Ocwen sent Donahue a pre-foreclosure referral letter, reflecting the balance owed on the Mortgage and encouraging Donahue to “call [Ocwen] immediately to discuss possible alternatives to foreclosure” if she could not make her account current. D. 39-5 at 3; D. 39-6 ¶ 17. In or about July 2015, Donahue made another verbal request for mortgage assistance, as acknowledged by Ocwen in a letter dated July 15, 2015. D. 39-11; D. 39-6 ¶ 18. Ocwen informed her that she still had not submitted a complete mortgage assistance package and set a deadline of August 13, 2015 for receipt of that package. D. 39-11 at 2.

         According to Ocwen, Ocwen first offered a face-to-face meeting with Donahue in a letter dated October 28, 2015. D. 39 ¶ 20, see D. 39-12. Katherine Ortwerth (“Ortwerth”), a Senior Loan Analyst at Ocwen, refers to the letter as “Ocwen's First HUD Face-to-Face Letter” and attests that it was sent to Donahue. D. 39-6 ¶ 20; 12/6/18 hearing transcript (counsel for Ocwen acknowledging that this letter was not sent by certified mail). Donahue claims that the letter was never sent because she did not receive it and the purported United States Postal Service (“USPS”) tracking No. on the letter reflects origin and receipt destinations in California. D. 45 at 7-8; D. 47 ¶ 13; D. 48-1.

         In or about November 2015, Donahue submitted a request for modification of her delinquent loan. D. 39 ¶ 21; D. 45 at 8. By letter dated December 4, 2015, Ocwen acknowledged Donahue's request and solicited additional documentation from Donahue, including a copy of her most recent retirement, social security and death benefit income. D. 39 ¶ 22; D. 39-14; D. 45 at 8. On December 23, 2015, Ocwen sent Donahue a list of missing documents needed to review her request for modification. D. 39 ¶ 23; D. 39-15; D. 45 at 8.

         On January 28, 2016, Ocwen ordered “Doorknocks” for Donahue. D. 53-1 at 7. On or about February 2, 2016, Ocwen asserts that it had a door hanger left at the Property, advising Donahue of her right to “a face-to-face interview with a representative from the mortgage on the underlying loan agreement.” D. 39-16 at 3. Ocwen has filed a photo of a door hanger on a door knob that is printed on letterhead from a company called Safeguard Properties. Id. at 2. The header above the photo identifies the address as that of the Property and lists a “Completed Date” of February 2, 2016. Id. Ortwerth from Ocwen attests that it is the regular practice of Ocwen to have Ocwen's vendor visit properties and leave a door hanger with information about a face-to-face meeting once a request is made for a property visit pursuant to 24 C.F.R. § 203.604. D. 53-1 ¶ 11. Ortwerth further attests that this practice was followed in February 2016 and that, based on her review of Donahue's file, nothing indicates that the usual procedure was not followed in this case. Id.

         On February 4, 2016, Ocwen requested a face-to-face letter be sent to Donahue, as reflected in Donahue's account file. D. 53-1 at 7. On February 5, 2016, Ocwen asserts that it sent a letter informing Donahue of her right to a face-to-face meeting. D. 39 ¶ 27; D. 39-6 ¶ 26; D. 39-17. An entry dated February 8, 2016 in Donahue's account file reflects the same mailing date. D. 53-1 ¶ 6; D. 53-1 at 8. The February 8, 2016 entry also lists a USPS tracking No. that corresponds to the one at the top of the letter. D. 53-1 ¶ 6; D. 53-1 at 8.

         Donahue contends that Ocwen never sent the February 5, 2016 letter, because she never received it and because the tracking number-identical to the one offered for the October 28 letter-indicates origin and receipt destinations in California in March 2016. D. 45 at 10-11; D. 47 ¶ 13; D. 48-1. Donahue attests that she never received any correspondence or notice from Ocwen advising her of the option of a face-to-face meeting. D. 47 ¶ 13. She also attests that no Ocwen agent ever made a trip to the Property, id., despite the Property being within 200 miles of an Ocwen branch office, Id. ¶ 10.

         Donahue remained in default. D. 39 at 3 n.1; D. 44 at 9. In or around June 2016, approximately one month before the scheduled foreclosure sale, Donahue submitted another request for mortgage assistance. D. 39 ¶ 29; D. 45 at 11. On June 30, 2016, Ocwen acknowledged receipt of Donahue's request and indicated that she had until July 14, 2016 to provide all supporting documents listed in the letter. D. 39 ¶ 31; D. 39-19; D. 45 at 11. The parties dispute whether Donahue submitted the documents. Compare D. 39 ¶ 32, with D. 45 at 11-12. Ocwen representatives spoke with Donahue or her authorized ...


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