CAUSES OF ACTION AGAINST ALL OR ANY DEFENDANTS
florida-appellate-courts-are-getting-it-and-so-is-everyone-else
Relevant Portions of UCC Article 3: UCC Article 3
Appraisal Fraud Complaint Missouri Rusty
Copy of final Lara Luis COMPLAINT
Mot. For Order Prohibiting Sale, Assignment, or Transfer
- LENDER LIABILITY pdf—- see also cuomo-files-civil-and-criminal-charges-against-debt-collectors-for-fraud-on-courts
- 15522201-Tila-Disclosure-Req-Viol-Remedies
- some-stories-dont-end-well-in-this-battle-for-justice-a-smiling-judge-refuses-to-get-it
GOING AFTER THE LAW FIRM? The attorney firm of Barrett Daffin Frappier Turner & Engle, L.L.P. (also known as Barrett Burke Wilson Castle Daffin & Frappier, L.L.P.) located at 15000 Surveyor Boulevard Suite 100 Addison, Texas 75001 has been sanctioned multiple times in the state of Texas for its violation of debt collection practices. SEE COLLECTION LAWS AND ETHICS AGAINST LENDER\’S LAWYERS
excellent-article-sumarizing-many-areas-of-foreclosure-litigation
non-judicial-as-private-contract-opening-the-door-to-homeowners-for-self-help
demand-letters-claiming-damages-for-errors-and-omissions-negligence-and-malpractice
identity-theft-mers-and-other-issues-great-post-from-james
mortgage-aggregators-wholesalers-agents-of-financial-death
lawyers-and-banks-sanctioned-for-filing-wrongful-foreclosures
superb-complaint-piercing-the-heart-of-deutsch-bank%E2%80%99s-authority-to-collect-money-file-suit-seeking-recovery-of-property-and-money-through-receiver-and-damages-against-the-lawyers-who-filed-t
predatory-lawyers-and-servicers-no-better-than-predatory-lenders
QUIET TITLE
excellent-multi-count-complaint-from-california-attorney-complaint-1
title-carriers-hit-the-fan-their-solvency-in-question
Moody\’s Assigned High Ratings To Bonds Backed by Mortgage That Were Designed to Fail
appraisal-and-ratings-fraud-documented
would-you-pay-103000-for-this-arizona-fixer-upper-appraisal-fraud-predatory-loan-securitization-in-its-finest-moment
fraud-in-the-factum-voids-the-instrument-under-state-law-and-is-a-real-defense-against-even-an-holder-in-due-course
missal-report-documents-new-century-predatory-lending-even-after-general-counsel-warned-against-it-borrowers-may-have-cause-of-action-against-auditor-kpmg
CBS NEWS ON PONZI SCHEME ?id=3134273n
Fraud in the inducement n. the use of deceit or trick to cause someone to act to his/her disadvantage, such as signing an agreement or deeding away real property. The heart of this type of fraud is misleading the other party as to the facts upon which he/she will base his/her decision to act. Example: “there will be tax advantages to you if you let me take title to your property,” or “you don’t have to read the rest of the contract–it is just routine legal language” but actually includes a balloon payment. (See: fraud, extrinsic fraud)
appraisal-fraud-and-industry-standards-described-in-2003-official-white-paper-red-flags-described-in-detail-with-excellent-diagrams-explanations-and-descriptions-of-best-practices
appraisal-fraud-rules-set-to-cut-off-mortgage-originators-from-appraisers-this-week
“Fraud on the Market” at the core of the mortgage meltdown is hotly contested: millowitzvcitigrioup1-30-07
secvlangford-8708-judicial-notice-and-whether-swap-agreements-are-securities
- Bond Insurers Are NOT Purchasers of Securities: Amicus Brief of Bond Association Take Position Excluding Insurers as Holders in Due Course:fsa_20v_20stephens_206-21-06
mortgage-broker-and-lender-liability
title-agent-liability-for-errors-and-omissions-and-title-insurance
trustees-deed-pool-certificate-holders-substitutions-and-beneficiaries
unnamed-defendants-in-mortgage-meltdown-accountants-for-banks-and-investment-bankers
courtesy of Consumer Rights Defenders at 818.453.3585 ask for Sara. Call us for free consultation about your litigation and in pro se needs. We can help nationwide. Now read this:
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from our legal staff: If the banks don’t comply with Civil Code section 2923.5 or any of the prerequisite foreclosure statutes, the foreclosure is subject to a temporary restraining order and preliminary injunction and if foreclosed wrongfully, a set aside order, but you need to litigate the issue. Read the codes and call us for assistance. We have lawyers and paralegals standing by and we are affordable. 818.453.3585
9-4 M-F PDT. Ask for Sara or Steve.
http://current.com/shows/the-young-turks/videos/bank-of-americas-phony-mortgages-are-as-fraudulent-as-fake-prada-purses-and-they-get-away-with-it
Consumer Rights Defenders can help you pro se homeowners with the litigation work that you will need from A-Z, starting with your complaint and then work through discovery which is the most important part of your case. You should consider having counsel for depositions, court appearances and settlement conferences and in the unlikely event you need a trial. Most cases settle. Affordable help for everyone. State and Federal courts. Attorneys and paralegal teams here for you.
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Unilateral rescission on basis of mistake, duress, fraud or undue influence: A contract is subject to unilateral rescission by a party whose consent to the contract (or the consent of another party jointly contracting with the rescinding party) was:
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CRD, can help with the litigation work that you will need from A-Z, starting with your complaint and then work through discovery which is the most important part of your case. You should consider having counsel for depositions, court appearances and settlement conferences and in the unlikely event you need a trial. Most cases settle. We have referrals if you are concerned about what we can do for you.
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Proposed Mortgage Deal Said to Be Limited to Foreclosures
y.
After a default of the $600,000 purchase loan taken out by borrower HYUNH in 2006, the following sequence of recorded documents occurred:
(1) 8/3/07 a Notice of Default was recorded by Quality Loan Service Corporation (QLSC) – Note that the trustee under the Deed of Trust was First American Title;
(2) 8/30/07 Assignment of Deed of Trust was recorded (MERS assigned its beneficial interest to Avelo Mortgage) – Note the typical assignment of the Deed of Trust together with “notes therein” (The Fontenot case sees this as proper even though MERS does not, and has never held any note in its possession).
(3) 11/9/07 Notice of Sale by QLSC.
(4) 11/9/07 (same day but after the Notice of Sale was recorded) Substitution of Trustee was recorded substituting QLSC for First American Title (note, apparently this document was executed on 8/2/07 prior to the notice of default being recorded by QLSC);
Thereafter, the property was sold at non-judicial foreclosure trustee sale on 7/08. The purchaser at the foreclosure sale was Avelo Mortgage, allegedly paying 400k for the property. Avelo recorded the Trustees Deed upon sale.
Appellants contend they are not challenging irregularities in the foreclosure proceeding. Rather, they argue that respondent is not the holder of the underlying promissory note and therefore cannot invoke the tender rule against them. In their complaint, appellants alleged that New Century remains in possession of the promissory note and that appellants owe no obligation to respondent. On appeal, appellants contend that whether respondent holds the promissory note is a factual dispute, and sustaining respondent’s demurrer presupposes that respondent has authority to enforce the loan obligation. They assert that while MERS had the authority to transfer its beneficial interest under the deed of trust, there is no evidence that MERS, which was acting as a nominee of New Century, held the promissory note and was authorized to assign the note itself to respondent.
The role of MERS is central to the issues in this appeal. “`MERS is a private corporation that administers the MERS System, a national electronic registry that tracks the transfer of ownership interests and servicing rights in mortgage loans. Through the MERS System, MERS becomes the mortgagee of record for participating members through assignment of the members’ interests to MERS. MERS is listed as the grantee in the official records maintained at county register of deeds offices. The lenders retain the promissory notes, as well as the servicing rights to the mortgages. The lenders can then sell these interests to investors without having to record the transaction in the public record. MERS is compensated for its services through fees charged to participating MERS members.’” (Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1151 [121 Cal.Rptr.3d 819] (Gomes v. Countrywide), quoting Mortgage Electronic Registration Systems, Inc. v. Nebraska Dept. of Banking & Finance (2005) 270 Neb. 529 [704 N.W.2d 784, 785].)
On appeal, the court affirmed the order, finding that Gomes could not seek judicial intervention in a nonjudicial foreclosure before the foreclosure has been completed. (Gomes v. Countrywide, supra, 192 Cal.App.4th at p. 1154.) Nonetheless, the appellate court reached the merits of Gomes’s claim as an independent ground for affirming the order sustaining the demurrer. The court rejected Gomes’s argument that MERS lacked authority to initiate the foreclosure procedure because the deed of trust explicitly provided MERS with the authority to do so. The court found that the “deed of trust contains no suggestion that the lender or its successors and assigns must provide Gomes with assurances that MERS is authorized to proceed with a foreclosure at the time it is initiated.” (Id. at p. 1157.) Thus, Gomes acknowledged MERS’s authority to foreclose by entering into the deed of trust. (Ibid.)
Just as in Gomes v. Countrywide, the deed of trust in this case specifically states: “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.”
(5) Appellants concede that MERS had the authority to assign its beneficial interest to respondent.Accordingly, respondent had the same authority to initiate foreclosure proceedings. And while Gomes v. Countrywide did not address the tender issue, it does not follow that a beneficiary may initiate nonjudicial foreclosure proceedings under a deed of trust without the original promissory note, but cannot seek tender from a defaulting borrower attempting to set aside the foreclosure. Although California courts have not resolved this issue (see Miller & Starr, Cal. Real Estate (3d ed. 2010-2011 Supp.) Deeds of Trust and Mortgages, § 10:39:10, p. 4), several federal district courts in this state have upheld a beneficiary’s authority to initiate foreclosure proceedings and invoke the tender rule against a defaulting borrower, even when the beneficiary is not the holder of the original promissory note. Those courts have noted that “California law `does not require possession of the note as a precondition to [nonjudicial] foreclosure under a Deed of Trust.’” (Jensen v. Quality Loan Service Corp. (E.D.Cal. 2010) 702 F.Supp.2d 1183, 1189; see also Odinma v. Aurora Loan Services (N.D.Cal., Mar. 23, 2010, No. C-09-4674 EDL) 2010 U.S. Dist. Lexis 28347; see also Morgera v. Countrywide Home Loans, Inc.(E.D.Cal., Jan. 11, 2010, No. 2:09-cv-01476-MCE-GGH) 2010 U.S.Dist. Lexis 2037, p. *21 [MERS, as nominee of lender, has authority to initiate nonjudicial foreclosure without underlying promissory note].) Moreover, in cases involving an assignment of a deed of trust from MERS to a third party, courts have invoked the tender rule despite arguments that MERS did not have the authority to assign its interest under the deed of trust without the promissory note. (See Lai v. Quality Loan Service Corp.(C.D. Cal., Aug. 26, 2010, No. CV 10-2308 PSG (PLAx)) 2010 U.S. Dist. Lexis 97121.) Appellants offer no authority, state or federal, to support the legal loophole they claim for defaulting borrowers and their successors.
Appellants also argue that respondent was not authorized to substitute Quality as the trustee prior to becoming the beneficiary under the deed of trust. Quality initiated the foreclosure proceedings when it was not the trustee and therefore had no legal right to do so. Under a deed of trust, the trustee may be substituted by a “substitution executed and acknowledged by: (A) all of the beneficiaries under the trust deed, or their successors in interest. . .; or (B) the holders of more than 50 percent of the record beneficial interest of a series of notes secured by the same real property or of undivided interests in a note secured by real property equivalent to a series transaction, exclusive of any notes or interests of a licensed real estate broker that is the issuer or servicer of the notes or interests or of any affiliate of that licensed real estate broker.” (Civ. Code, § 2934a, subd. (a)(1).)
(6) We agree with appellants that respondent did not have the authority to execute a substitution of trustee until MERS assigned the deed of trust to it. Thus, Quality’s August 3, 2007 notice of default was defective. Nonetheless, Huynh had more than three months to satisfy his obligation before Quality executed a notice of sale. The substitution of trustee was effective when respondent became the beneficiary under the deed of trust and when the substitution was recorded on November 9, 2007. (Civ. Code, § 2934a, subd. (a)(4) ["From the time the substitution is filed for record, the new trustee shall succeed to all the powers, duties, authority, and title granted and delegated to the trustee named in the deed of trust."].) Thus, the notice of sale was valid.Quality then completed the foreclosure in July 2008, long after its substitution as trustee took effect. This situation is distinct from other cases that have voided a nonjudicial foreclosure sale when a party other than the trustee initiated the proceeding and completed the sale without having been substituted in as the trustee. (See Pro Value Properties, Inc. v. Quality Loan Service Corp. (2009) 170 Cal.App.4th 579, 583 [88 Cal.Rptr.3d 381]; see also Dimock v. Emerald Properties, supra, 81 Cal.App.4th at pp. 876-878 [foreclosure sale void where original trustee completed foreclosure sale after being replaced by new trustee].) Appellants offer no authority for the proposition that the defective nature of the initial notice of default corrupted all subsequent steps in the nonjudicial foreclosure proceeding such that the sale was void, not merely voidable.
Thus, this ruling seems to leave open a tiny door for situations where the wrong trustee sells the property at foreclosure sale. In those situations, the sale may be VOID with no obligation to tender. So, looking for grounds to challenge the Substitution of Trustee may be one of the few remaining challenges in California to either enjoin or set aside a wrongful foreclosure sale despite courts recognizing the the foreclosure procedure must be valid.
The Court cited Tender statute in California:
(8) A tender is an offer of performance made with the intent to extinguish the obligation. (Civ. Code, § 1485.) It must be unconditional (Civ. Code, § 1494) and offer full performance to be valid (Civ. Code, § 1486). Civil Code section 1512 provides: “If the performance of an obligation be prevented by the creditor, the debtor is entitled to all the benefits which he would have obtained if it had been performed by both parties.”
NOTE: I do not believe the “tender rule” is a hard and fast rule. You have to look at what your facts are. Some cases have held that a tender may not be required where it would be inequitable to do so. (See Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424; see also Dimock v. Emerald Properties (which was actually cited by the Ferguson court) (2000) 81 Cal.App.4th 868, 876-878 [which held that there was no requirement to tender when the wrong trustee sells the property, in these instances, the sale is VOID, not merely VOIDABLE, and no tender was needed to challenge the VOID sale].) There are other cases that talk about VOID vs. VOIDABLE. However, you need to be aware of the rule, and there will be tender challenges raised in almost every case of wrongful foreclosure so there has to be a strategy, and cases to deal with that. Also, where the Plaintiff’s lawsuit challenges the validity of an alleged underlying debt, tender is not required since it would constitute an affirmation of the debt.” See Onofrio v. Rice, supra, 55 Cal.App.4th at p. 424.
NOTE2: This case also discussed the requirements of a Quiet Title lawsuit in California:
(2) Here, appellants sought to quiet title against respondents and set aside the trustee sale at which respondents purchased the property. In order to state a viable cause of action for quiet title, a complaint must include: “(a) A description of the property that is the subject of the action. . . . [¶] (b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. . . . [¶] (c) The adverse claims to the title of the plaintiff against which a determination is sought. [¶] (d) The date as of which the determination is sought. . . . [¶] (e) A prayer for the determination of the title of the plaintiff against the adverse claims.” (Code Civ. Proc., § 761.020.) To bring an action to quiet title a plaintiff must allege he or she has paid any debt owed on the property. Shimpones v. Stickney (1934) 219 Cal. 637, 649 ["[A] mortgagor cannot quiet his title against the mortgagee without paying the debt secured.”].) The complaint must also be verified (sworn under oath).
Why did the homeowner win? Because the banks could not prove that they owned the note. Why couldn’t they prove it? Because the loans had been improperly securitized!
These excerpts are from the Huffington Post
Checking out “Ph.D MARC J. SEIFER HANDWRITING EXPERT on ANDREW HARMON SIGNATUR” on Foreclosure Hamlet: http://ning.it/kCAdcT
GEORGE E. BABCOCK .
expert.witness@live.com
GEORGE E. BABCOCK .
expert.witness@live.com
Please…Do it! Okay ?
GEORGE E.BABCOCK ESQUIRE 401-274-1905 FOR HELP ON FORECLOSURE DEFENSE.
I’m trying to see if anyone can figure out what the judge actually wants to see, I can’t see how I can state a claim with particularity with a short and plain statement.
IF YOU HAVE A MERS WHICH STANDS FOR MORTGAGE ELECTRONIC REGISTRATION SERVICES WHICH WOULD BE IN MOST CASES ON THE 1ST PAGE OF YOUR MORTGAGE PARAGRAPH C OR YOU HAVE A MORTGAGE WITH INDYMAC OR ONE WEST BANK CALL KIM THOMAS OR GEORGE
In taking judicial notice of the events surrounding the FDIC’s sale of Indy Mac to One West, this Court cannot find that One West’s sole purpose for purchasing Indy Mac was to facilitate debt collection, including the collection on the plaintiff’s mortgage.
————————————————————————-
One west received all deposits of Indy Mac without regard to whether a debt was in default.
Whoa…where is the court coming from here Stop Whoa what is the court saying hear *G*I*B*B*E*R*I*S*H *G*I*B*B*E*R*I*S*H *G*I*B*B*E*R*I*S*H *G*I*B*B*E*R*I*S*H
Expert.witness@live.com
DAVID L. PADGETT, Plaintiff,
v.
ONEWEST BANK, FSB, d/b/a INDYMAC MORTGAGE SERVICES, Defendant.
Civil Action No. 3:10-CV-08
United States District Court, Northern District of West Virginia, Martinsburg
April 19, 2010
MEMORANDUM OPINION AND ORDER
JOIHN PRESTON BAILEY, UNITED STATES DISTRICT JUDGE
Currently pending before the Court are Defendant Onewest Bank, FSB’s Motion to Dismiss [Doc. 11], filed March
15, 2010; Defendant’s Motion to Stay [Doc. 15], filed April 1, 2010; Defendant’s Motion to Strike [Doc. 18], filed April 5,
2010; and Plaintiff’s Motion to Correct [Doc. 19], filed April 5, 2010. Plaintiff responded to the motion to dismiss on
March 29, 2010, and the defendant replied on April 12, 2010. Plaintiff responded to the motion to stay on April 2, 2010,
and the defendant filed no reply. Plaintiff responded to the motion to strike on April 7, 2010, and the defendant filed no
reply. Defendant filed no response to the motion to correct. The Court has reviewed the record and the arguments of the
parties and, for the reasons set out below, concludes that the defendant’s Motion to Dismiss [Doc. 11] should be
GRANTED IN PART and DENIED IN PART, the defendant’s Motion to Stay [Doc. 15] should be DENIED, the defendant’s
Motion to Strike [Doc. 18] should be DENIED, and the plaintiff’s Motion to Correct [Doc. 19] should be GRANTED.
BACKGROUND
I. Factual Allegations
The plaintiff, David L. Padgett, alleges the following facts in the challenged First Amended Complaint [Doc. 9]. On
April 12, 2006, the plaintiff entered into a home mortgage, secured by a deed of trust, with IndyMac Bank, F.S.B.
(“IndyMac”) for the plaintiff’s home located in Martinsburg, West Virginia. ([Doc. 9] at ¶ 8). On December 18, 2007, the
plaintiff filed a Chapter 7 bankruptcy petition, listing IndyMac as a secured creditor. (Id. at ¶ 10). On February 1, 2008,
IndyMac filed a motion in the bankruptcy court seeking relief from the automatic stay so that it could proceed to
foreclose on the plaintiff’s residence. (Id. at ¶ 11). By the end of April 2008, the plaintiff was one month in arrears on his
home mortgage loan. (Id. at ¶ 13).
On April 30, 2008, the parties filed an Agreed Order in the bankruptcy court resolving IndyMac’s motion to lift the
automatic stay. (Id. at ¶ 14). Pursuant to this Agreed Order, the plaintiff’s mortgage was deemed current as of May 1,
2008, and the one payment for which the plaintiff was in arrears was added onto the end of the mortgage. (Id. at ¶¶ 15-
16). The first payment due under the Agreed Order was due in May 2008. (Id. at ¶ 17). The plaintiff made the May 2008
payment in a timely fashion and has made his monthly mortgage payment each month after May 2008, up to and
including the date of the filing of the plaintiff’s First Amended Complaint. (Id. at ¶¶ 18-19).
In March 2009, Defendant OneWest Bank, F.S.B. (“OneWest”) purchased IndyMac, whereupon IndyMac Mortgage
Services (“IndyMac MS”) became a division of OneWest. (Id. at ¶¶ 20-21). On July 16, 2009, OneWest, doing business
as IndyMac MS, sent the plaintiff a letter claiming he was one month behind on his payments. (Id. at ¶ 22). In response,
on July 28, 2009, the plaintiff wrote to OneWest, enclosing a copy of the Agreed Order from his bankruptcy proceeding
and requesting that OneWest supply him with documentation that he nevertheless remained one month behind. (Id. at
¶¶ 24-26). Again, on August 3, 2009, and September 16, 2009, IndyMac MS sent letters to the plaintiff alleging he was
behind on his mortgage payments. (Id. at ¶¶ 28-29).
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On September 30, 2009, the plaintiff, through counsel, wrote to the attorneys who represented IndyMac in
connection with the plaintiff’s bankruptcy proceedings. (Id. at ¶ 31). This letter reminded them of the terms of the
Agreed Order and informed them that the plaintiff was current in his mortgage payments. (Id. at ¶¶ 32-33).
On October 7, 2009, OneWest sent the plaintiff a statement alleging that $1,247.06 was past due on his account.
(Id. at ¶ 35). Again, on November 30, 2009, the plaintiff’s counsel wrote to the attorneys who represented IndyMac in
connection with the plaintiff’s bankruptcy to remind them of the terms of the Agreed Order and inform them that the
plaintiff was current in his mortgage payments. (Id. at ¶¶ 37-39).
On December 4, 2009, OneWest wrote to the plaintiff demanding payment of $186,715.61. (Id. at ¶ 41). In
response, the plaintiff requested verification of the alleged debts. (Id. at ¶ 43). OneWest replied on December 17, 2009,
enclosing a one-year payment history, which showed that the plaintiff had made his monthly payments in a timely
fashion each month and that OneWest had imposed a $15.00 late charge on the plaintiff’s account each month. (Id. at
¶¶ 44-47).
On December 16, 2009, December 18, 2009, January 19, 2010, and January 21, 2010, OneWest either wrote
directly to the plaintiff demanding payment of an alleged one- month arrearage or sent him a statement alleging that
$1,247.06 was past due on his account. (Id. at ¶¶ 48-55). Since this time, OneWest continues to assess monthly late
fees against his account and has informed credit reporting agencies that the plaintiff’s mortgage is delinquent, though
plaintiff alleges he is current on his monthly mortgage payments. (Id. at ¶¶ 56-59).
II. Procedural History
On January 11, 2010, the plaintiff brought suit in the Circuit Court of Berkeley County, West Virginia, asserting
claims against OneWest and IndyMac MS pursuant to state law, including, inter alia, the West Virginia Consumer Credit
and Protection Act, W.Va. Code § 46A-2-122, et seq. (“WVCCPA”). On February 12, 2010, OneWest, noting that it does
business as IndyMac MS, removed the above-styled action to the Northern District of West Virginia on the basis of
diversity jurisdiction [Doc. 4].
On February 18, 2010, OneWest filed a Motion to Dismiss. [Doc. 6]. In its motion, OneWest argued that the
plaintiff failed to state a claim upon which relief can be granted. ([Doc. 6] at 1-3). Specifically, OneWest argued that all
of the plaintiff’s claims for relief were preempted by the Home Owners’ Loan Act of 1933, 12 U.S.C. § 1461, et seq.
(“HOLA”). (Id. at 4).
On February 24, 2010,[1] the plaintiff filed the challenged First Amended Complaint [Doc. 9], which contains eight
counts.[2] Counts I, II, and III arise under the WVCCPA. In Count I, the plaintiff alleges that the letters written by
OneWest violate the unfair debt collection provisions of the WVCCPA. ([Doc. 9] at ¶¶ 60-68). Specifically, the letters
written after September 30, 2009, constitute violations of W.Va. Code § 46A-2-128(e) because OneWest knew as of that
date that the plaintiff was represented by counsel with respect to the debt. (Id. at ¶ 66). Moreover, each of the letters
written after July 15, 2009, is a separate fraudulent, deceptive, or misleading representation of the character, extent, or
amount of OneWest’s claim against the plaintiff, in violation of W.Va. Code § 46A-2-127(e). (Id. at ¶ 67). In Count II, the
plaintiff alleges that each time OneWest charged the plaintiff’s account for late fees, it committed a separate violation of
W.Va. Code § 46A-2-128(d) because the plaintiff’s account was current. (Id. at ¶ 75). In Count III, the plaintiff alleges
that each late fee charge is also a separate unfair and deceptive practice prohibited by W.Va. Code § 46A-6-104. (Id. at
¶ 80).
In Counts IV, V, and VI, the plaintiff alleges defamation, breach of contract, and negligence on the part of
OneWest. (Id. at ¶¶ 82-101). In particular, the plaintiff alleges that OneWest committed common law defamation by
falsely misrepresenting to credit reporting agencies that his mortgage was delinquent when it was, in fact, current. (Id.
at ¶ 82-89). Next, the plaintiff alleges that each of OneWest’s assessments of a late fee after May 1, 2008, is a breach of
the mortgage and deed of trust executed by the plaintiff, as modified by the Agreed Order entered in the plaintiff’s
bankruptcy proceeding. (Id. at ¶ 92). Finally, the plaintiff alleges that OneWest’s false representations to the credit
reporting agencies were also negligent. (Id. at ¶ 100).
Count VII arises under the Real Estate Settlement Practices Act, 12 U.S.C. § 2601, et seq. (“RESPA”). (Id. at ¶¶
102-112). Specifically, the plaintiff alleges that he or his counsel sent three letters to OneWest that constituted qualified
written requests within the meaning of 12 U.S.C. § 2605(e). (Id. at ¶¶ 105-107). According to the plaintiff, OneWest’s
failure to respond to these requests resulted in three separate violations of the RESPA. (Id. at ¶¶ 108-110). First,
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OneWest failed to acknowledge receipt of the requests within 20 days as required by 12 U.S.C. § 2605(e)(1). (Id. at ¶
108). Second, OneWest failed to correct or otherwise respond to any of the requests within 60 days as required by 12
U.S.C. § 2605(e)(2). (Id. at ¶ 109). Third, OneWest failed to protect the plaintiff’s credit rating after receipt of the
requests as required by 12 U.S.C. § 2605(e)(3). (Id. at ¶ 110).
Finally, Count VIII arises under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). (Id. at
¶¶ 113-123). In particular, the plaintiff alleges that OneWest’s actions as a “debt collector” constituted three violations of
the FDCPA. (Id. at ¶¶ 119-121). First, each of OneWest’s demands for payments that are not due is a false
representation of the character, amount or legal status of a debt in violation of 15 U.S.C. § 1692e(2)(A). (Id. at ¶ 119).
Second, each of OneWest’s demands for payment of a late fee charge is a false representation of the character, amount,
or legal status of a debt in violation of 15 U.S.C. § 1692e(2)(A). (Id. at ¶ 120). Third, each of OneWest’s demands for
payment of a late fee charge is an unfair or unconscionable practice in violation of 15 U.S.C. § 1692f(a). (Id. at ¶ 121).
On February 26, 2010, in light of the plaintiff’s First Amended Complaint, this Court dismissed without prejudice
OneWest’s Motion to Dismiss [Doc. 6]. [Doc. 10].
On March 15, 2010, OneWest filed the pending Motion to Dismiss [Doc. 11], again arguing that the plaintiff’s state
claims are preempted by the HOLA. ([Doc. 11] at 2-4). Specifically, the plaintiff’s first six counts, as described above, are
preempted by the HOLA because each claim is based upon the imposition of late fees or actions purportedly taken by
OneWest in connection with the servicing of the plaintiff’s mortgage loan. (Id. at 4). Next, OneWest argues that the
plaintiff’s RESPA and FDCPA claims must also be dismissed. (Id. at 4-5). The plaintiff’s RESPA claims fail because he
failed to allege any facts demonstrating actual damages as a result of any alleged violation of RESPA. (Id. at 5). Finally,
the plaintiff’s FDCPA claims fail because OneWest, as mortgagee of the debt, is not a “debt collector” within the meaning
of FDCPA. (Id.).
On March 29, 2010, the plaintiff filed his Memo in Opposition [Doc. 13], contending that none of his claims should
be dismissed. ([Doc. 13] at 1). First, the plaintiff argues that the HOLA does not preempt claims that seek to enforce
mortgage agreements, as do his state law claims. (Id.). Moreover, the plaintiff argues he has alleged sufficient facts to
support his federal law claims. (Id.).
On April 12, 2010, OneWest filed its Reply [Doc. 22], reasserting its argument that both the plaintiff’s state and
federal claims should be dismissed. ([Doc. 22] at 11). According to OneWest, the state law claims are preempted
because they attempt to regulate its servicing of the plaintiff’s loan (Id. at 1-6); the injury required to support his RESPA
claim is inadequately pled (Id. at 6-8); and OneWest is not covered by the FDCPA, as it is a “creditor” not a “debt
collector.” (Id. at 8-11).
In the meantime, the parties filed three other motions, beginning with OneWest’s Motion to Stay [Doc. 15], filed
on April 1, 2010. In its motion, OneWest requests that this Court stay all proceedings pending its ruling on OneWest’s
Motion to Dismiss [Doc.11]. ([Doc. 15] at 3). In support of this request, OneWest cites a high likelihood that all of the
plaintiff’s state claims will be dismissed based upon preemption. ([Doc. 16] at 6-7). In response, the plaintiff argues that
his claims are not preempted because they do not challenge the making or terms of the loan, but instead seek remedies
for OneWest’s breach of the loan agreement. ([Doc. 17] at 1).[3]
Moreover, on April 5, 2010, OneWest filed a Motion to Strike [Doc. 18]. In its motion, OneWest asks this Court to
strike all references to, and all claims asserted against, IndyMac MS. ([Doc. 18] at 2). In support of this request,
OneWest notes that IndyMac MS is a division of OneWest and that any claims asserted against IndyMac MS, as a
separate entity, are redundant and immaterial. (Id.). In response, the plaintiff argues OneWest’s motion is premature
and otherwise inappropriate. ([Doc. 21] at 1). Specifically, the plaintiff asserts the motion is premature because without
discovery there is no factual basis for determining whether the corporate organization of OneWest and IndyMac MS is
such that OneWest is fully liable for all the acts of IndyMac MS. (Id.) Next, the plaintiff contends the motion is
inappropriate because he continues to receive communications from OneWest under the name of IndyMac MS. (Id.).[4]
Finally, also on April 5, 2010, the plaintiff filed a Motion to File a Corrected Memorandum [Doc. 19]. Specifically,
the plaintiff seeks to correct the first sentence of Section IV. B., p. 13, of his Memorandum in Opposition [Doc. 13],
which the plaintiff admits contains an incorrect statement of one of the plaintiff’s claims for relief. ([Doc. 19] at 1).[5]
DISCUSSION
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I. Motion to Dismiss Standard
In assessing a Rule 12(b)(6) motion for failure to state a claim, the court must accept the factual allegations
contained in the complaint as true. Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910 F.2d 139, 143 (4th
Cir. 1990). “[A] motion to dismiss for failure to state a claim for relief should not be granted unless it appears to a
certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his
claim.” Johnson v. Mueller, 415 F.2d 354 (4th Cir. 1969).
“A complaint need only give ‘a short and plain statement of the claim showing that the pleader is entitled to
relief.’” In re Mills, 287 Fed.Appx. 273, 280 (4th Cir. 2008) (quoting Fed.R.Civ.P. 8(a)(2)). “Specific facts are not
necessary; the statement need only give the defendant fair notice of what the … claim is and the grounds upon which it
rests.” Id. (internal quotations and citations omitted). “[T]he pleading standard Rule 8 announces does not require
detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A
pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor
does a complaint suffice if it tenders naked assertions devoid of further factual enhancements.” Ashcroft v. Iqbal, __ U.S.
__, 129 S.Ct. 1937, 1949 (May 18, 2009)(internal quotations and citations omitted).
II. HOLA Preemption Standards
The HOLA empowers the Office of Thrift Supervision (“OTS”) “to authorize the creation of federal savings and loan
associations, to regulate them, and by its regulations to preempt conflicting state law.” In re Ocwen Loan Servicing, LLC
Mortg. Servicing Litigation, 491 F.3d 638, 642 (7th Cir. 2007); see 12 U.S.C. § 1464. Under this authority, OTS
promulgated a preemption regulation in 12 C.F.R. § 560.2 (the “Regulation”), which is entitled to “no less pre-emptive
effect than federal statutes.” Fidelity Fed. Sav. and Loan Ass’n v. de las Cuesta, 458 U.S. 141, 153 (1982). The
Regulation provides that:
OTS hereby occupies the entire field of lending regulation for federal savings associations. OTS intends to
give federal savings associations maximum flexibility to exercise their lending powers in accordance with a
uniform federal scheme of regulation. Accordingly, federal savings associations may extend credit as
authorized under federal law, including this part, without regard to state laws purporting to regulate or
otherwise affect their credit activities, except to the extent provided in paragraph (c) of this section . . ..
12 C.F.R. § 560.2(a) (emphasis added).
In section 560.2(b), the OTS provided illustrative examples of the types of state laws preempted. Among these
listed examples, preempted state laws “include, without limitation, state laws purporting to impose requirements
regarding”:
(5) Loan-related fees, including without limitation, initial charges, late charges, prepayment penalties,
servicing fees, and overlimit fees;
. . .
(10) Processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages; .
. . 1
2 C.F.R. § 560.2(b)(5) and (10).
Moreover, the OTS expressly provided, in section 560.2(c), categories of state laws that “are not preempted to the
extent that they only incidentally affect the lending operations of Federal savings associations or are otherwise consistent
with the purposes of paragraph (a) . . ..” 12 C.F.R. § 560.2(c). The state laws generally excepted from preemption by
the HOLA are:
(1) Contract and commercial law;
(2) Real property law;
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(3) Homestead laws specified in 12 U.S.C. 1462a(f);
(4) Tort law;
(5) Criminal law; and
(6) Any other law that OTS, upon review, finds:
(i) Furthers a vital state interest; and
(ii) Either has only an incidental effect on lending operations or is not otherwise contrary to
the purposes expressed in paragraph (a) . . ..
Id.
The OTS has explained, however, that the preemption provision in section 560.2(a) is not intended “to preempt
basic state laws such as state uniform commercial codes and state laws governing real property, contracts, torts, and
crimes.” OTS, Lending and Investment, 61 Fed.Reg. 50951, 50966 (Sept. 30, 1996). “[T]he purpose of [the exemptions
in] paragraph (c) is to preserve the traditional infrastructure of basic state laws that undergird commercial transactions,
not to open the door to state regulation of lending by federal savings associations.” Id. The OTS has also outlined the
proper analysis for courts to employ when confronted with interpretive questions under section 560.2(a):
When analyzing the status of state laws under [the Regulation], the first step will be to determine
whether the type of law in question is listed in paragraph (b). If so, the analysis will end there; the law is
preempted. If the law is not covered by paragraph (b), the next question is whether the law affects
lending. If it does, then, in accordance with paragraph (a), the presumption arises that the law is
preempted. This presumption can be reversed only if the law can clearly be shown to fit within the
confines of paragraph (c). For these purposes, paragraph (c) is intended to be interpreted narrowly. Any
doubt should be resolved in favor of preemption.
Id. at 50966-67. See also Casey v. F.D.I.C., 583 F.3d 586, 593 (8th Cir. 2009); Silvas v. E*TRADE Mortgage Corp., 514
F.3d 1001, 1005 (9th Cir. 2008).
In Jones v. Home Loan Inv., FSB, No. 2:09-0537, 2010 WL 1238437, at *4 (S.D. W.Va. Mar. 22, 2010), the
Honorable Judge John T. Copenhaver, Jr. concisely summarized the process of applying OTS’s analysis:
If a court performs the first step of the OTS’s analysis and concludes that the state law bases for plaintiff’s
claims fall within section 560.2(b), plaintiff’s claims are preempted by HOLA. Alternatively, if the court
concludes that the state law claim falls outside of section 560.2(b), it must then determine whether
plaintiff’s claims clearly fit within the confines of permissible state law claims laid out in section 560.2(c).
In order to fit within these confines, the court must be satisfied that the state law involved has, at most,
only an incidental effect on lending operations.
Next, noting that the Fourth Circuit has “yet to consider the application of section 560(c) to state law claims,”
Judge Copenhaver considered the “as applied” analysis articulated by the Eighth and Ninth Circuits. Id. In particular,
those Circuits have interpreted section 560.2 as meaning that any “state law that either on its face or as applied imposes
requirements regarding the examples listed in § 560.2(b) is preempted.” Casey, 583 F.3d at 595; Silvas, 514 F.3d at
1006. Under this framework, the “as applied” rule exempts from preemption only those generally applicable state laws
that fit within the confines of section 560.2(c) without more than incidentally affecting lending.
Finally, Judge Copenhaver considered the Seventh Circuit’s approach, which led to the same result without
expressly relying upon the “as applied” rule articulated in the Eighth and Ninth Circuits. Jones, 2010 WL 1238437, at *5.
Specifically, in considering what state laws are exempted from HOLA preemption, the Seventh Circuit balanced the OTS’s
authority over the federal savings and loan banks with the ability of consumers to recover under the HOLA’s statutory
structure. See In re Ocwen Loan Servicing, LLC Mortg. Servicing Litigation, 491 F.3d 638, 643 (7th Cir. 2007). In so
doing, the Ocwen Court noted that the OTS has very limited power to oversee disagreements between the banks and
their consumers. Id. (citing to “How to Resolve a Consumer Complaint” 1-2,http://www.OTS.treas.gov/docs/4/480924.pdf).
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More specifically, the Ocwen Court emphasized that inasmuch as the HOLA provides no private right of action to
consumers, consumers have little recourse in disputes with federal savings banks outside of those generally applicable
state laws exempted from preemption in section 560.2(c). Id. (citing Burns Int’l Inc. v. Western Savings & Loan Ass’n,
978 F.2d 533, 535-37 (9th Cir. 1992)). “Against this background of limited remedial authority,” the court in Ocwen “read
subsection (c) to mean that OTS’s assertion of plenary regulatory authority does not deprive persons harmed by the
wrongful acts of savings and loans associations of their basic state common-law-type remedies.” Id. Thus, while the
HOLA and the OTS preempt any attempt at state regulation of federal savings banks, the OTS allows states to maintain
their state- law-based causes of action to protect their citizens.[6] Id.
In providing support for its conclusion, the Ocwen Court quoted at length from an OTS opinion letter similarly
relied upon by the courts in Casey and Silvas. Id. at 644 (quoting OTS Opinion Letter P-96-14, Dec. 24, 1996, at 5). In
this letter, the OTS’s chief counsel addressed whether the HOLA preempted Indiana’s generally-applicable state law
prohibiting deceptive acts and practices in the course of commerce. Id. Noting the OTS’s indication that it does not
intend to preempt state laws establishing basic norms undergirding commercial transactions, the chief counsel
determined that the Indiana state law fell within the traditional “contract and commercial law” category properly
excluded from preemption under section 560.2(c). In reaching this determination, the chief counsel emphasized that the
impact the law had on lending appeared to be only incidental to the primary purpose of the statute and there was no
indication that the law was in conflict with the purpose of the HOLA’s preemption provision or the OTS’s regulation of
federal savings associations. Id. Thus, the chief counsel found that the Indiana deceptive acts and practices law was not
preempted by federal law. Id.
Based upon its analysis of the HOLA and the OTS’s position as stated in the chief counsel’s letter, the Ocwen Court
held that section 560.2(c) preserves those state laws of general applicability only incidentally affecting the banking and
lending activities of a federal savings association. Ocwen 491 F.3d at 644-45; see also State Farm Bank v. Reardon, 539
F.3d 336, 344 (6th Cir. 2008). Finding several generally applicable state statutes preempted because they fell within the
section 560.2(b) illustrative examples, the Ocwen Court clarified that “[n]ot all state statutes that might be invoked
against a federal [savings and loan bank] are preempted, any more than all common law doctrines are.” Ocwen, 491
F.3d at 646. While the court in Ocwen concluded that traditional common law actions of fraud, breach of contract,
defamation and slander of title generally avoid HOLA preemption, the result depends on the particular nature of the
claims as alleged by the plaintiff. Id. (“The twentieth [claim] alleges fraud, and does not appear to be preempted,
though this could depend on the nature of the fraud, which is unexplained.”).
In concluding his review of Casey, Silvas, and Ocwen, Judge Copenhaver noted the one commonality among the
cases was that each court “considered the specific nature of each state law claim to determine whether an allegatio