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Pacifico v. Nationstar Mortgage, LLC

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

February 10, 2017

NATIONSTAR MORTGAGE, LLC, et al. Defendants.

          Honorable Matthew F. Leitman, Judge


          ELIZABETH A. STAFFORD United States Magistrate Judge


         Plaintiff Kelly Pacifico filed this action in state court against Nationstar Mortgage LLC (Nationstar) and The Bank of New York Mellon, as trustee for Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2003-40A (NY Mellon) (collectively, “defendants”), alleging wrongful foreclosure, breach of contract, fraudulent misrepresentation by servicer, RESPA violations, and negligence. Defendants removed the action to this Court. [ECF No. 1]. Before the Court is defendants' motion to dismiss. [ECF No. 11].[1] The Court RECOMMENDS that defendants' motion to dismiss be GRANTED IN PART AND DENIED IN PART.


         This action involves residential property located at 5210 Glenwood Creek, Clarkston, Michigan 48348. [ECF No. 1-2, PgID 14; ECF No. 11-2, PageID 101]. On July 31, 2003, Pacifico obtained a mortgage loan for $240, 000.00 from non-party Westminster Mortgage Corporation to purchase the property. [ECF No. 11-2, PageID 101]. The loan was secured by a mortgage interest in the property. [Id.]. The mortgage was then assigned to NY Mellon. [ECF No. 1-2, PageID 14]. The servicing rights to the mortgage were transferred to Nationstar. [Id.]. Pacifico defaulted on her loan obligations and on April 28, 2015, a sheriff's sale was scheduled to occur, but was postponed due to the filing of her lawsuit a week before the sale was to occur. [ECF No. 1-2, PageID 12; ECF No. 11-4, PgID 127; ECF No. 12-1, PageID 245].

         Pacifico claims in her complaint that, prior to the foreclosure notice, Nationstar had deemed her eligible for its Home Affordable Unemployment Program (HAMP) and that a representative told her to sign a new agreement and forward it back immediately. [ECF No. 1-2, PageID 15]. But she received the new agreement almost 30 days after her first payment under the new agreement was to be due. [Id.]. Pacifico called Nationstar's representative, but the representative was unhelpful and Pacifico hung up. [Id.]. Despite her representative's efforts over the next several months, Nationstar refused to allow her to perform under the new agreement. [Id., PageID 15-16]. Ultimately, Nationstar sent a letter stating, with explanation, that her request for participation in the HAMP program was declined. [Id., PageID 16-17]. As a timeline, Pacifico states that Nationstar received her complete loan modification package on or about January 2014, but that she did not receive written notice from Nationstar that it denied her application until August 2014. [Id., PageID 16, 19]. She states that she submitted multiple completed loss mitigation packages throughout 2014 and 2015, until Nationstar noticed her home for the foreclosure sale in April 2015. [Id., PageID 20].

         III. ANALYSIS

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests a complaint's legal sufficiency. Although the federal rules only require that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief, ” Federal Rule of Civil Procedure 8(a)(2), the statement of the claim must be plausible. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Iqbal Court explained, “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         The plausibility standard “does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556. In deciding whether a plaintiff has set forth a “plausible” claim, the Court must construe the complaint in the light most favorable to the plaintiff and accept as true all well-pleaded factual allegations. Id.; see also Erickson v. Pardus, 551 U.S. 89, 94 (2007).

         As a preliminary matter, defendants point out that Pacifico has not asserted any claims against NY Mellon; her only reference to NY Mellon in the complaint is that it is the current holder and owner of the mortgage. [ECF No. 1-2, PageID 14]. Pacifico does not address this deficiency, so she has abandoned any claim against NY Mellon and it should be dismissed as a defendant. Bazinski v. JPMorgan Chase Bank, N.A., No. 13-14337, 2014 WL 1405253, at *2 (E.D. Mich. Apr. 11, 2014) (“Claims left to stand undefended against a motion to dismiss are deemed abandoned.”).

         Count I - Real Estate Settlement Procedures (RESPA) Violations

         Defendants' motion to dismiss with respect to Count I of Pacifico's complaint should be granted in part and denied in part. In Count I, Pacifico alleges that Nationstar failed to properly evaluate her loan modification and mitigation requests as required by 12 C.F.R. §§ 1024.38 and 1024.41, and that those violations are actionable under Section 6(f) of RESPA, 12 U.S.C. § 2605(f). For these alleged violations, Pacifico requests relief in the form of restraining the Sheriff's sale, ordering Nationstar to conduct a proper evaluation of her loan modification request, and awarding damages under RESPA. [ECF No. 1-2, PageID 17-21].

         Pacifico's reliance on Section 1024.38, which sets forth “[r]easonable policies and procedures” for servicers, is without merit because violations of that section “cannot support a private action.” Smith v. Nationstar Mortg., No. 15-13019, 2015 WL 7180473, at *4 (E.D. Mich. Nov. 16, 2015). See also Austerberry v. Wells Fargo Home Mortg., No. 15-CV-13297, 2015 WL 8031857, at *5 (E.D. Mich. Dec. 7, 2015) (“[T]he Court concludes that while Plaintiff ...

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