UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE
Fairon N. Brown and Donna Brown
v. Civil No. 15-cv-467-JL Opinion No. 2017 DNH 145 Wells Fargo Home Mortgage A/K/A Wells Fargo Bank, N.A., and Federal National Mortgage Association
MEMORANDUM ORDER
This action turns on whether the defendants satisfied the
obligations imposed on them by regulations promulgated under the
Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C.
§ 2601 et seq. and the Equal Credit Opportunity Act (“ECOA”), 15
U.S.C. § 1691 et seq., after the mortgagor requested a loan
modification because they fell behind on their mortgage.
In 2014, Fairon and Donna Brown requested a loan
modification from Wells Fargo Home Mortgage, which serviced
their mortgage loan on behalf of its owner, Federal National
Mortgage Association (“FNMA”). Wells Fargo offered a loan
modification, but the Browns, having found employment in the
meantime, cured the default and did not accept the modification.
A year later, having again fallen behind on their payments, the
Browns again sought a loan modification. Wells Fargo denied
this second application and subsequently foreclosed. The Browns then filed this action against Wells Fargo and
FNMA, alleging that Wells Fargo violated RESPA by foreclosing
during pendency of a modification request and violated the ECOA
by failing to notify the Browns of any decision on that request
before the foreclosure sale. The Browns sought damages as well
as injunctive relief for these violations. The Browns also
brought claims under New Hampshire’s Unfair, Deceptive, or
Unreasonable Collection Practices Act (“UDUCPA”), N.H. Rev.
Stat. Ann. § 358-C:3, and the duty of good faith and fair
dealing. Upon defendants’ motion, the court dismissed the
Browns’ claims under the UDUCPA and the duty of good faith and
fair dealing for failure to state a claim. Brown v. Wells Fargo
Home Mortgage, 2016 DNH 102, 13-16. The court also dismissed
the Browns’ claims for post-foreclosure injunctive relief under
RESPA as unavailable under the statute. Id. at 8-9. Finally,
to the extent the Browns challenged the validity of the
foreclosure, the court dismissed those claims as barred by N.H.
Rev. Stat. Ann § 479:25, II. Id. at 6-7. Thus, only the
Browns’ claims under RESPA and the ECOA remain. By dint of
those claims, the court has subject-matter jurisdiction over
this matter under 28 U.S.C. §§ 1331 (federal question).
The defendants now move for summary judgment on both remaining
claims. The defendants have demonstrated that there is no
dispute of material fact that Wells Fargo met the obligation
2 imposed on it by Regulation X, 12 C.F.R. § 1024.41, promulgated
under RESPA, with respect to one loan modification request,
which it did when it offered the Browns a loan modification in
2014. Thus, it was not obligated to comply with that regulation
again when faced with the Browns’ second modification request.
Similarly, the defendants have demonstrated that no dispute of
material fact exists over whether they notified the Browns of
action taken on their 2015 loan modification request as required
by Regulation B, 12 C.F.R. § 1002.9, and the ECOA. Though the
Browns attempt to raise a question as to whether Wells Fargo
actually mailed such a notice, their admission that they
received one notification letter in August 2015 precludes a
finding of any such dispute. The court, therefore, grants the
defendants’ motion.
Applicable legal standard
“The court shall grant summary judgment if the movant 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 dispute is genuine if the evidence about the
fact is such that a reasonable jury could resolve the point in
the favor of the non-moving party. A fact is material if it
carries with it the potential to affect the outcome of the suit
3 under the applicable law.” DeAndrade v. Trans Union LLC, 523
F.3d 61, 65 (1st Cir. 2008) (internal quotations omitted).
The moving party “bears the initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of [the factual record] which it
believes demonstrate the absence of a genuine issue of material
fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
“Once the moving party has properly supported [her] motion for
summary judgment, the burden shifts to the nonmoving party, with
respect to each issue on which [she] has the burden of proof, to
demonstrate that a trier of fact reasonably could find in [her]
favor.” DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir.
1997) (citing Celotex, 477 U.S. at 322-35). “[T]he non-moving
party ‘may not rest upon mere allegation . . . but must set
forth specific facts showing that there is a genuine issue for
trial.’” Braga v. Hodgson, 605 F.3d 58, 60 (1st Cir. 2010)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986)). In analyzing a summary judgment motion, the court
draws “all reasonable inferences that may be extrapolated from
the record . . . in favor of the non-movant,” but may disregard
“allegations of a merely speculative or conclusory nature.”
Serra v. Quantum Servicing, Corp., 747 F.3d 37, 39–40 (1st Cir.
2014). “As to issues on which the [nonmovants] bears the
ultimate burden on proof,” as the Browns do here, they “cannot
4 rely on an absence of competent evidence, but must affirmatively
point to specific facts that demonstrate the existence of an
authentic dispute.” Kenney v. Floyd, 700 F.3d 604, 608 (1st
Cir. 2012).
Background
The Browns mortgaged their home in Litchfield, New
Hampshire, in 2004.1 After several assignments not relevant
here, Wells Fargo assigned the mortgage to FNMA on June 26,
2015,2 but continued to service the loan.3 Mr. Brown became
unemployed in 2014 and by May of that year had missed more than
one mortgage payment.4 Around the same time, he sought a loan
modification from Wells Fargo. In response, on August 4, 2014,
Wells Fargo offered to modify the Browns’ loan, sending them a
loan modification agreement and a letter informing them that, to
accept the loan modification, “[a]ll loan documents are due
within 14 days” of that date.5 The Browns did not sign or return
the loan modification documents, thus rejecting the modification
1 Defendants’ Mot. Ex. A (doc. no. 40-2). 2 Defendants’ Mot. Ex. D (doc. no. 40-5). 3 Smith Aff’t (doc. no. 40-6) ¶ 4. 4 Brown Dep., Defendants’ Mot. Ex. F (doc. no. 40-7) at 24-25. 5 Smith Aff’t Ex. 2 (doc. no. 40-6).
5 offer.6 Wells Fargo therefore denied their modification request
in November 2014.7
By June 2015, the Browns were again in arrears and, on
June 29, 2015, again sought relief from Wells Fargo. During a
telephone call with the servicer on that day, the Browns made an
oral application for a 6-month forbearance in light of
Mr. Brown’s unemployment. A month later, the Browns again
contacted Wells Fargo. During that telephone call, Wells Fargo
informed the Browns that their application was incomplete and
that they would need to submit additional documentation to
complete it.8 The Browns, in response, submitted documents to
Wells Fargo.
Wells Fargo denied the Browns’ June 29, 2015 request for
loan modification. On August 3, 2015, Wells Fargo sent a letter
to the Browns with the following statement:
6 The Browns contend that they “never rejected nor accepted the August proposed loan modification.” Defendants’ Mot. Ex. G (doc. no. 40-8) at 6. They did not do so, they explain, because “by the time Fairon had received the proposed loan modification Fairon had secured or was about to secure new employment,” and the loan modification “became moot when Fairon promptly cured the existing default.” Id. They do not, however, contest the facts most relevant here: that Wells Fargo considered their modification application and that they received the modification offer. 7 Smith Aff’t Ex. 3 (doc. no. 40-6). 8 Brown Dep. (doc. no. 40-7) at 40-41.
6 We’re responding to your recent request for mortgage assistance. At this time, we are unable to move forward with an evaluation of your current situation.
We have reviewed this mortgage account in the past. Based on that review and the recent information you have provided to us, we have determined there has not been a sufficient enough change in your circumstances for us to conduct another review.9
Wells Fargo then sent the Browns a second letter, dated
August 17, 2015, informing them that “[a]t this time, we are
unable to move forward with an evaluation of your current
situation,” and that if the Browns’ “mortgage has been or will
be referred to foreclosure, that process may move forward now.”10
FNMA foreclosed on August 26, 2015.11 The Browns did not move to
enjoin the foreclosure and subsequently filed this action in
November 2015, almost three months after the foreclosure sale.
Analysis
As discussed supra, the Browns retained two claims after
the court granted, in part, the defendants’ motion to dismiss.
Specifically, the Browns contend that Wells Fargo violated
Regulation X, 12 C.F.R. § 1024, promulgated under RESPA,
12 U.S.C. §§ 2601 et seq., by commencing foreclosure proceedings
9 Smith Aff’t ¶¶ 5, 8; Ex. 5 (doc. no. 40-6). The Browns claim that they never received this notice. As discussed infra, the court credits that claim. 10 Smith Aff’t ¶¶ 5, 8; Ex. 6 (doc. no. 40-6). 11 Defendants’ Mot. Ex. H (doc. no. 40-9).
7 and conducting the foreclosure sale prior to acting on the
Browns’ June 29, 2015 request for a loan modification. The
Browns further contend that Wells Fargo violated the ECOA,
15 U.S.C. § 1691(d), and Regulation B promulgated under that
statute, 12 C.F.R. § 1002.9, by failing to provide notice of
adverse action taken on that request. The defendants move for
summary judgment on both counts, arguing both that the
plaintiffs’ claims fail as a matter of law and that the
plaintiffs are unable to prove any damages resulting from either
claim. Before turning to the substance of the defendants’
motion, the court addresses two issues with respect to the
plaintiffs’ response.
First, the plaintiffs filed a four-paragraph objection that
woefully fails to satisfy Local Rule 56.1(b).12 Under that rule,
“[a] memorandum in opposition to a summary judgment motion shall
incorporate a short and concise statement of material facts,
supported by appropriate record citations, as to which the
adverse party contends a genuine dispute exists so as to require
a trial.” LR 56.1(b). The plaintiffs’ objection lacks any
statement of material facts, let alone any record citations.
Instead, through a footnote, the plaintiffs improperly
“incorporate[] . . . as if fully stated in this opposition”
12 See Obj. (doc. no. 46).
8 (1) their motion to strike the affidavit of Shae Smith, a Vice
President of Loan Documentation at Wells Fargo, which the
defendants submit in support of their summary judgment motion13;
(2) Mr. Brown’s affidavit filed in support of their objection14;
and (3) “the arguments presented in plaintiff’s [sic] objection
to defendants [sic] motion to dismiss, as well as in plaintiff’s
[sic] supplemental sueply [sic] to the same.”15 This amounts to
an impermissible attempt to circumvent this court’s Local Rules
“aimed at enabling a district court to adjudicate a summary
judgment motion without endless rummaging through a plethoric
record.” Puerto Rico Am. Ins. Co. v. Rivera-Vazquez, 603 F.3d
125, 131-32 (1st Cir. 2010) (incorporating other filings by
reference does not constitute compliance with local rule
requiring objections to summary judgment to address material
facts in dispute). The court declines to engage in “the sort of
archeological dig that [such] anti-ferret rules are designed to
prevent,” id. at 131, and may therefore “deem[] admitted” all
“properly supported material facts set forth in [Wells Fargo’s]
factual statement,” LR 56.1(b); see also Fed. R. Civ.
P. 56(e)(2). It need not necessarily do so to resolve this
13 See Mot. to Strike (doc. no. 43). 14 Document no. 45. 15 Document nos. 13, 19.
9 motion, however, because its analysis turns on facts to which
the plaintiffs affirmatively agree.
Second, the plaintiffs have moved to strike the affidavit
of Shae Smith16 submitted in support of defendants’ motion for
summary judgment challenging (1) the affiant’s personal
knowledge as to whether any notices in the Browns’ file were
actually sent to the Browns17 and (2) the admissibility of the
exhibits attached to the affidavit and paragraphs 6 and 8 of the
affidavit as inadmissible hearsay not subject to the business-
record exception. The court denies that motion.
The Browns’ admission that they received two of the notices
attached to Smith’s affidavit -- those dated August 4, 2014,
offering the Browns a loan modification in response to their
first application, and August 17, 2015, denying the Browns’
second application18 -- vitiates any dispute over whether those
specific notices were sent to the Browns. That is, because the
notices were received -- facts the Browns affirmatively admit --
there can be no dispute that they were sent. This renders moot
the plaintiffs’ motion to strike Smith’s affidavit for lack of
personal knowledge of the sending as to those two notices.
16 Document no. 40-6. 17 Mot. to Strike (doc. no. 43) at 5-6, 9-13. 18 Brown Aff’t (doc. no. 45) ¶¶ 2-3, 5.
10 Furthermore, because Wells Fargo does not offer the
August 4, 2014 or August 17, 2015 letters for the truth of the
matters asserted therein, their contents do not amount to
inadmissible hearsay and defendants therefore need not establish
that they fall within the exception for business records under
Rule 803(6) to establish their admissibility. See Fed. R. Evid.
801(c) (“‘Hearsay’ means a statement that . . . a party offers
in evidence to prove the truth of the matter asserted in the
statement). As discussed infra, Wells Fargo instead relies on
the August 4, 2014, notice to demonstrate that the Browns
received a response to their 2014 loan modification application
and thus that Wells Fargo was relieved of any obligation under
Regulation X to consider a second modification, as opposed to
the substance and content of that notice. Likewise, Wells Fargo
relies on the August 17, 2015 letter to demonstrate compliance
with Regulation B and the ECOA by providing notice to the
plaintiff of its denial of their 2015 loan modification
application. In other words, the two notification letters were
not offered to prove the truth of their content, but rather as
proof that they were sent -- that the notifications occurred.
And the Browns admit that they did.
The Browns’ admission that they received the notifications
also undermines another of their arguments -- that paragraphs 6
and 8 of the Smith Affidavit fail to establish or provide
11 admissible evidence, either under a hearsay exception or through
first-hand knowledge, that the notices were sent. This
argument, separate from their hearsay challenge to the notices,
has some merit, as far as it goes. See Fed. R. Evid. 803(6),
602. But it makes no difference here. Again, the Browns admit
that they received the August 4, 2014 and August 17, 2015
notices, which allows the permissible inference that the notices
were sent. Thus, any argument concerning the shortcomings of
the Smith Affidavit or other evidence on this point misses the
mark.
Finally, to the extent the Browns contend that the Smith
Affidavit fails to lay appropriate foundation for the
admissibility of the remaining notices, as discussed infra, the
fact that the Browns received the August 4, 2014, and August 17,
2015 notices is sufficient to defeat their claims. The
remaining notices, admissible or not, have no bearing on the
summary judgment analysis. The plaintiffs’ motion to strike is,
therefore, denied.
A. RESPA claim
Regulation X, 12 C.F.R. § 1024, promulgated under RESPA, 12
U.S.C. §§ 2601 et seq., requires mortgage loan servicers to
follow certain procedures after receiving a borrower’s loss
mitigation application. It may be enforced “pursuant to
12 section 6(f) of RESPA,” 12 C.F.R. § 1024.41, which permits
recovery for “any actual damages to the borrower” and a
plaintiff’s costs and fees incurred in a successful action, 12
U.S.C. § 2605(f)(1)-(3).
The Browns have alleged that Wells Fargo violated
Regulation X, and specifically 12 C.F.R. §§ 1024.41(f)(2)
and (g), by commencing foreclosure proceedings and conducting a
foreclosure sale prior to acting on the Browns’ June 29, 2015
oral modification application.19 As the defendants point out,
however, “[a] servicer is only required to comply with the
requirements of [Regulation X] for a single complete loss
mitigation application for a borrower's mortgage loan account.”
12 C.F.R. § 1024.41(i).20 “In other words, a borrower may not
bring an action for violation of [Regulation X] if that borrower
has previously availed herself of the loss mitigation process.”
Mangum v. First Reliance Bank, No. 4:16-CV-02214-RBH, 2017 WL
1062534, at *3 (D.S.C. Mar. 21, 2017).
The Browns do not dispute that Wells Fargo considered their
loss mitigation application in 2014 and offered a loan
19 See Compl. (doc. no. 1-1) ¶¶ 49-53. 20This version of Regulation X is presently in effect, and has been at all times relevant to this action. The regulations have since been amended, but that amendment does not take effect until October 19, 2017.
13 modification.21 They concede that they received the notification
that their application was granted, as well as Wells Fargo’s
proposed loan modification agreement.22 They do not argue that
the 2014 loan modification process violated Regulation X.23
Thus, there is no dispute of material fact over whether Wells
Fargo complied with its obligations under Regulation X with
respect to one loan modification application from the Browns.
Nor do the Browns argue that their decision to reject the
modification offer and cure the default in 2014 obligated Wells
Fargo to comply with the regulations with respect to a second
modification application, contrary to the clear language of the
regulation.
Accordingly, because the Browns have identified no material
fact in dispute supporting the position that Wells Fargo was
21Indeed, the Browns’ objection does not address this argument at all. See Obj. (doc. no. 46). 22 Brown Aff’t (doc. no. 45) ¶¶ 2-3. 23Mr. Brown suggests, also in his affidavit, that Wells Fargo’s notice granting the Browns’ modification application failed to comply with Regulation X because it “fail[ed] to inform [them] that [they] have a right to appeal the offer of loan modification within 14 days.” Id. (citing 12 C.F.R. §§ 1024.41(h)). Even were this argument properly before the court in the plaintiffs’ objection memorandum, which it is not, the plaintiffs have not alleged that they were in any way damaged by this alleged violation of Regulation X. Indeed, it is unclear to the court what damages the plaintiffs may have suffered when they had, as Mr. Brown affirms, already cured their default before receiving the modification offer. See id.
14 obligated to comply with the requirements of Regulation X with
respect to a second modification after granting a modification
in 2014, the court grants the defendants’ motion for summary
judgment as to the Browns’ RESPA claim.
B. Equal Credit Opportunity Act (Count 2)
The plaintiffs also bring one claim under the Equal Credit
Opportunity Act, which requires a creditor, “[w]ithin thirty
days . . . after receipt of a completed application for credit,”
to “notify the applicant of its action on the application.” 15
U.S.C. § 1691(d)(1). Regulation B, promulgated under the ECOA,
similarly requires creditors to provide timely notice of action
taken on incomplete applications.24 See 12 C.F.R.
§ 1002.9(a)(1)(ii). The Browns contend that they received no
notice of Wells Fargo’s decision on their June 29, 2015 loan
modification application in violation of Regulation B.
The parties agree that Brown’s June 29, 2015 oral request
for forbearance constituted an oral loan modification
application. They further agree that, in accordance with
Regulation B, Wells Fargo notified the Browns that their
application was incomplete and requested additional information
24The Browns do not dispute Wells Fargo’s characterization of their application as incomplete. The court, accordingly, adopts that characterization, though its analysis would be substantially the same were the application considered complete.
15 during a July 29, 2015 telephone call with Mr. Brown.25 See
12 C.F.R. § 1002.9(c)(3). “If the application remains
incomplete” after such oral notice of incompleteness, Regulation
B obligates the creditor to provide written notice, again within
30 days, “of action taken[] in accordance with [§ 1002.9(a)]; or
of the incompleteness, in accordance with [§ 1002.9(c)(2)].”
Id. § 1002.9(c)(1).
A creditor taking the former course, as Wells Fargo argues
it did here, must “notify an applicant of action taken within .
. . 30 days after taking adverse action on an incomplete
application . . . .”26 Id. § 1002.9(a)(1)(iii). Wells Fargo,
moving for summary judgment, contends there can be no dispute --
based on the August 17, 2015 notice -- that they notified the
25Though the Browns initially contended that Wells Fargo violated Regulation B by failing to inform them of missing information within 30 days, they conceded at oral argument on the defendants’ motion to dismiss that this telephone call, though initiated by the Browns, satisfied that requirement. See Brown, 2016 DNH 102, 11-12. 26If the creditor takes an “adverse action,” it generally must provide the applicant with “a statement of reasons for such action from the creditor.” Id. § 1002.9(a)(2); see also 15 U.S.C. § 1691(d)(2). Wells Fargo need not have done so in this case because “a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default,” as was undisputedly the situation here, does not constitute an “adverse action” triggering that requirement. 15 U.S.C. § 1691(d)(6).
16 Browns of their decision not to review the Browns’ June 29, 2015
application.27
The Browns, arguing that Wells Fargo failed to provide any
notice of action taken on the Browns’ June 29, 2015 request for
loan modification, “den[y] receipt” of all of the “so-called
denial letters . . . during the 2015 calendar year . . . .”28
They challenge the reliability of Wells Fargo’s records, arguing
that “[a]t the very least, there is a question of fact as to
whether or not those letters were in fact mailed and/or
delivered.”29 But Mr. Brown admits that he received the notice
dated August 17, 2015.30 No other evidence submitted to the
court suggests other than that Wells Fargo sent, and he
received, at least that notice. Accordingly, even crediting the
Browns’ position that they never received several of Wells
Fargo’s letters, it is undisputed that Wells Fargo sent, and
27 See Smith Aff’t Exs. 5, 6 (doc. no. 40-6). 28Obj. (doc. no. 46) ¶ 4. The Browns nowhere argue that the August 17, 2015 notice would not have satisfied the timeliness requirement of 12 C.F.R. § 1002.9(a)(1)(iii), that is, that Wells Fargo provide notice within 30 days of its decision. They argue only that they never received any notice. 29 Id. 30Brown Aff’t (doc. no. 45) ¶ 5 (Brown “did receive [the August 18, 2015 notice] . . . sometime between August 20 and August 23 of 2015.”)
17 they received, notice of Wells Fargo’s decision not to evaluate
their application.31
Regulation B required Wells Fargo to “notify [the Browns]
of its action on [their] application.” 15 U.S.C. § 1691(d)(1).
Wells Fargo has adduced evidence supporting their compliance
with that provision. The Browns concede that they received
notice of Wells Fargo’s decision and have not identified any
evidence creating a dispute as to that fact. Accordingly, the
court grants the defendants’ motion for summary judgment on the
Browns’ ECOA claim.
C. Damages
The defendants also move for summary judgment on both
claims on the grounds that the plaintiffs cannot present
admissible evidence sufficient to establish they have suffered
“any actual damages” under either RESPA or the ECOA.32 Because
31To the extent that the Browns intend to argue that the August 17, 2015 notice fails to satisfy the requirements of Regulation B because “it does not say that it is a denial,” see Brown Aff’t (doc no. 45) ¶ 5, the Browns have waived that argument by failing to develop it. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.”). The Browns cannot raise an issue of material fact through a single sentence in an affidavit ostensibly incorporated by reference into a woefully underdeveloped objection, which does not so much as mention the issue. 32Mem. in Supp. of Mot. for Summary Judgment (doc. no. 40-1) at 9-22.
18 the court concludes, supra Parts III.A and III.B, that the
defendants are entitled to summary judgment on both claims, the
court need not, and therefore does not, address the availability
or sufficiency of the plaintiffs’ damages evidence.
Conclusion
For the reasons set forth above, the defendants’ motion for
summary judgment33 is GRANTED and the plaintiffs’ motion to
strike34 is DENIED. The clerk shall enter judgment accordingly
and close the case.
SO ORDERED.
Joseph N. Laplante United States District Judge
Dated: July 26, 2017
cc: William C. Sheridan, Esq. Michael R. Stanley, Esq.
33 Document no. 40. 34 Document no. 43.