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Garland v. Wells Fargo Home Mortgage Inc.

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

March 29, 2018



          Denise Page Hood, Chief Judge.

         I. BACKGROUND

         A. Procedural Background

         On June 19, 2017, Plaintiff Freddie Garland (“Garland”) commenced this action in the Circuit Court of Wayne County, Michigan against Defendants U.S. Bank, N.A. (“U.S. Bank”), Wells Fargo Home Mortgage Inc. (“Wells Fargo”) and Orlans PC (“Orlans”) (collectively “Defendants”), alleging that Defendants U.S. Bank and Wells Fargo fraudulently claims an interest in his property (Count 1) and wrongfully initiated foreclosure proceedings against him (Count 2), requesting that the Court issue a stay on the non-judicial foreclosure of his home. Garland also alleges that Defendant Orlans Violated the Fair Debt Collection Practices Act (Count 3). (Doc # 1-1, Pg ID 4-7) Garland also makes several other references to statutes and legal theories that do not form the basis of a cognizable claim throughout the complaint.

         On July 11, 2017, Defendant Orlans filed a Notice of Removal in this Court. (Doc # 1) This matter is currently before the Court on Defendant Orlans' Motion to Dismiss (Doc # 4) (pursuant to Fed.R.Civ.P. 12(b)(1) or 12(b)(6)) and Defendant Wells Fargo's Motion to Dismiss or, alternatively, for Summary Judgment. (Doc # 5)

         B. Factual Background

         Garland owns certain real property located at 15307 Stout, Detroit, Michigan 48223 (the “Property”). (Doc # 5) In 2004, Plaintiff obtained an $89, 000 loan from BNC Mortgage Inc. (the “Loan”) (Id.) Plaintiff and his then wife, Linda Garland, gave a Mortgage against the Property as security for repayment of the Loan. (Id.) The Loan and Mortgage were assigned to U.S. Bank in its capacity as trustee of a securitized trust. (Id.) Wells Fargo services the Loan for the bank.

         Garland was incarcerated in the Milan Federal Penitentiary from June 8, 2008 until his release on February 17, 2017. (Doc # 7; Pg ID 5) Sometime in July 2008, Garland also indicated that his then wife would “take care of the mortgage account.” (Doc # 5-6) Garland kept up communication with Wells Fargo while incarcerated. (See Doc # 5-8; Doc # 5-9; Doc # 5-10) On February 3, 2011, Garland named his the wife as his general “power of attorney” to conduct his affairs during his incarceration. The change was acknowledged by Wells Fargo on March 15, 2011. (Doc # 5-12)

         In June 2011, Plaintiff requested assistance from the Wayne County Mortgage Foreclosure Prevention Program. (Doc # 5-13) Wells Fargo acknowledged Garland's request for third-party assistance by letter on June 20, 2011, however, Garland did not default on the Loan. (Doc # 5-14)

         In June 2013, Garland changed his power of attorney to Alfreda Garland, which was acknowledged by Wells Fargo. (Doc # 5-15; Doc # 5-16) In October 2014, at a time when his mortgage obligation was past due, Garland sought mortgage assistance from Wells Fargo, but he did not default on the Loan. (Doc # 5-17; Doc # 5-18; Doc # 5-19)

         Garland and his wife Linda Garland were divorced on September 22, 2015. (Doc # 7, Pg ID 12) Linda remained as Garland's power of attorney under the terms of the Separation Agreement (the “Agreement”). (Id., Pg ID 13) The Agreement stated that Linda Garland would relinquish power of attorney no later than seven days after Garland's release from prison. (Id.) The agreement also specified that Linda and Plaintiff would “hold the real property located at 15307 Stout, Detroit, MI 48223 . . . as joint tenants with rights of survivorship until Defendant husband is released from incarceration.” (Id.) Linda Garland was to pay the monthly mortgage payments on Plaintiff Garland's behalf while he was incarcerated. (Id.) The Agreement specified that Plaintiff was to be awarded sole ownership of the Property upon his release, and hold his ex-wife free from all expenses associated with the Property. (Id.) After his release from prison, Garland became the sole owner of the Property.

         Garland was past due on his monthly obligation on the Loan once again in February 2017. (Doc # 5-20; Doc # 5-21) On March 18, 2017, on behalf of Wells Fargo, Orlans mailed Garland correspondence (the “Letter”) that detailed Garland's default on the Loan obligations and explained that the matter was referred to Orlans for further action. (Doc # 4, Pg ID 10) The Letter directed Garland's attention to the “Notice of Debt Pursuant to 15 U.S.C. § 1692” and relevant portions indicated:

You may have the rights to reinstate the Mortgage Loan by paying all past due installments, late charges, delinquent taxes, insurance premiums, and cost and fees incurred in the foreclosure. To request reinstatement information, contact our Loan Resolution Department at (248) 502-1400.

         The attached Notice of Debt provided:

1. The amount of debt as of May 16, 2017 is $76, 575.84.
2. Because of interest fees, and costs, and other charges that may vary from day to day, the amount you owe at a later date may be greater than the amount state above. Please contact Wells Fargo Home Mortgage Inc. or Orlans PC at (248) 502-1400 to obtain an updated payoff amount.
3. The name of the creditor to whom the debt is owed is U.S. Bank National Association, as Trustee, successor in interest to Bank of America, National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee for Structure Asset Securities Corporation, Amortizing Residential Collateral Trust, Mortgage Pass-Through Certificates, Series 2004-1.
4. Unless you, within thirty days after receipt of t[sic] notice, dispute the validity of the debt, or any portion thereof, the debt will be assumed to be valid by Orlans PC.
5. If you notify Orlans PC in writing with the thirty date period that the debt, or any portion thereof is disputed, Orlans PC will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to you by Orlans PC; and 6. Upon your written request within the thirty day period, Orlans PC will provide you with the name and address of the original creditor, if different from the current creditor.

Id. at 10-11.

         Wells Fargo sent Garland a letter to notify him that he had to pay $2, 318.50 by March 22, 2017 to avoid the possibility of acceleration. Id. By May 2017, Wells Fargo and Garland had not reached an agreement concerning mortgage assistance. (Doc # 5-22) Wells Fargo referred Garland's Mortgage Loan to Defendant Orlans to initiate foreclosure proceedings. (Doc # 5-23) On May 19, 2017, Wells Fargo sent a letter to Garland to discuss an offer for a Short Sale of the Property, with a deadline of June 2, 2017. (Doc # 5-24) The foreclosure notice set a sale date for June 22, 2017. (Doc # 5-25) At some point, Orlans contacted the Detroit Legal News to publish the foreclosure sale by advertisement. (Doc # 4, PgId. 11)

         II. ANALYSIS

         A. Standards of Review

         1. ...

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