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Lamothe v. Wells Fargo Bank, N.A.

United States District Court, E.D. Michigan, Southern Division

July 2, 2015

DAVID M. LAMOTHE and DONNA M. LAMOTHE, Plaintiffs,
v.
WELLS FARGO BANK, N.A., [1] Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (DOC. #4) AND DISMISSING ACTION

GEORGE CARAM STEEH, District Judge.

Plaintiffs brought this action challenging defendant's denial of the permanent modification of their residential mortgage loan. Now before the court is defendant's motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. #4). For the reasons that follow, defendant's motion will be granted.

I. BACKGROUND

In April 2006, plaintiffs purchased the home located at 44621 Aspen Ridge Drive, Northville, MI 48168. Plaintiffs obtained a loan from World Savings Bank, FSB, defendant's predecessor in interest, in the amount of $337, 600.00. The loan was evidenced by a note and secured by a publicly recorded mortgage in the Wayne County Register of Deeds.

In mid-2014, plaintiffs applied for a mortgage loan modification. On May 1, 2014, defendant informed plaintiffs that they were eligible to start a trial payment period ("TPP") that had the potential of ripening into a permanent loan modification. The TPP notification stated, "[i]f you fail to provide a subordination agreement from another lender or fail to pay off a judgment lien as required, your modification may be denied even if you pay the trial period payments." (Doc. #4-5 at 4). In addition, the letter informed plaintiffs that they were required to make trial payments until a final modification was approved, and that the trial period could be extended until such time. ( Id. ). The TPP directed:

Submitting all required documentation to be considered for a modification program is the first step. If you are eligible for a modification program, you may need to successfully complete a "trial period" by making trial period payments. Once we are able to finalize your modified loan terms near the end of this trial period, we will send you a loan modification agreement ("Modification Agreement"), which will reflect the terms of your modified loan. In addition to successfully completing the trial period, you will need to sign and promptly return to us both copies of the Modification Agreement or your loan cannot be modified.

(Doc. 8-1 at 24).

Plaintiffs made the requisite trial payments through October 2014. However, in a letter dated October 3, 2014, defendant informed plaintiffs that the loan modification would be denied because "[t]here are title issues with your property which prevents us from completing your request for assistance." (Doc. #4-6 at 2). At oral argument, defendant's counsel explained that there was a senior lien on the property that needed to be subordinated. Plaintiffs were informed that they could appeal defendant's decision and were instructed on how they could go about doing so; they did not appeal. A modification agreement was never sent to plaintiffs.

Currently, a foreclosure sale has not occurred on the property.

Plaintiffs filed this action in Wayne County Circuit Court seeking to quiet title to the property in their names. Plaintiffs allege:

Count I Quiet Title
Count II Breach Of Loan Modification Agreement
Count III Breach Of ...

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