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Hubbard v. Nationwide Lending Corp.

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

July 10, 2018


          Patricia T. Morris Magistrate Judge



         On September 12, 2017, Plaintiff Sherman Hubbard filed a suit in Alcona County Circuit Court which named Nationwide Lending Corporation, New Century Mortage Corporation, Deutsche Bank National Trust Company, and Select Portfolio Servicing Incorporated as Defendants. ECF No. 1. On October 3, 2017, the Defendants removed the case to federal court. ECF No. 1. All pretrial matters were referred to Magistrate Judge Patricia T. Morris. ECF No. 6. On October 10, 2017, Defendants Deutsche Bank National Trust Company and Select Portfolio Servicing Incorporated filed a motion to dismiss. ECF No. 3. The remaining Defendants have not been served.

         On January 29, 2018, Judge Morris issued a report recommending that the motion to dismiss be granted and the complaint dismissed. ECF No. 12. Hubbard timely objected, ECF No. 14, and the served Defendants have responded, ECF No. 15. For the following reasons, Hubbard's objections will be overruled, the report and recommendation will be adopted in part, the motion to dismiss will be granted, and the complaint will be dismissed.


         The premise of the motion to dismiss and the basis on which Judge Morris recommended dismissal is the same. Hubbard previously filed an action involving two of the same parties and alleging the same misconduct. See Hubbard v. Select Portfolio Servicing, Inc., Case No. 16-cv-11455. That action was dismissed because Hubbard failed to state a claim. Case No. 16-cv-11455, ECF No. 50. Hubbard appealed that dismissal. ECF No. 54. On June 7, 2018, the Sixth Circuit affirmed the dismissal. ECF No. 56.

         In the Court's August 30, 2017, opinion and order adopting Judge Morris's report and recommendation in the first case, the Court summarized the allegations in Hubbard's complaint. Case No. 16-cv-11455, ECF No. 50. These allegations were all drawn directly from Hubbard's complaint. And it is, of course, axiomatic that at the pleading stage all well-pleaded allegations in a plaintiff's complaint are assumed to be true.

. . . According to Hubbard, he is bringing claims of breach of contract and fraud. Compl. at 2, ECF No. 1. On January 14, 2004, Hubbard entered into an “Adjustable Rate Note” with Nationwide Lending. Id. The loan was assigned to Bank of America and then sold to Deutsche Bank. In 2008, Hubbard paid $41, 887 to Bank of America during a bankruptcy proceeding. Id. at 3.2 In 2012, Select Portfolio Servicing became the loan servicer. Id.
In 2013, Hubbard was informed that he would receive a loan modification pursuant to “the U.S. Justice Department and State Attorney General's Global Settlement.” Id. After making three trial payments of $1, 375.74, Hubbard was informed that “the monthly payments would be Substantially less than $1, 375.74 and the interest rate on the loan would be at market Rate of 2.75-3.75% The final loan modification offer was $136, 000 loan amount Interest Rate of 8.78% and a monthly payment amount of $1375.74.” Id. (sic throughout).
Accordingly, Hubbard argues that Defendants “failed to perform on the federally ordered settlement by not offering [a]n at market interest rate at the time of the loan modification.” Id. He alleges that “Defendants have knowingly and willfully . . . fraudulently deceived Plaintiff and Plaintiffs Attorney by having them submit loan modification documentation in excess of 15 time Each and every time claiming some form of paperwork is missing, incomplete, or Expired. Defendant has repeatedly changed or assigned a new loan servicer to Further delay the loan modification process.” Id. (sic throughout). Hubbard further alleges that on “4 separate occasions defendant has offered loan modifications without Any paper work to plaintiff with deceptive open ended terms.” Id.
As a result of Defendants' alleged misconduct, Hubbard's home was foreclosed upon for “nonpayment of taxes.” Id. He asserts that, because Defendants are unwilling to complete the mortgage modification mandated by the federal settlement, he is “unable to repair credit” and “unable to make necessary repairs to property.” Id. at 4.

Id. at 1-3.

         Hubbard's complaint in the present action includes similar allegations. He frames the action as one “to quiet title to real property” which he owns. Compl. at 1, ECF No. 1, Ex. A. Like in his original complaint, Hubbard alleges that he “entered into a note and mortgage with Defendant Nationwide Lending corp on January 14 2004.” Id. at 2. He then alleges that on December 20, 2004, Nationwide “assigned the mortgage and note to Defendant New Century Mortgage Corporation.” Id. Several weeks later, Nationwide “filed another assignment of mortgage to Defendant Deutsche Bank National Trust. Id. In 2008, Hubbard “filed chapter 7 bankruptcy.” Id.

         Years later, on February 10, 2015, “Defendant Deutchse Bank has Defendant Select Portfolio Serving file an affidavit regarding lost or misplaced assignment.” Id. In March of 2015, Defendant Select Portfolio Servicing hired Trott and Trott to start a foreclosure proceeding.” Id. Around the same time, “Plaintiff sent Trott and Trott a letter disputing Defendants claims.” Id. According to Hubbard, “Defendant Deutchse Bank claims Plaintiffs' mortgage is part of a trust of pass through certificates.” Id. Hubbard alleges that “this is impossible as the mortgage and note were not in possession of Deutsche Bank [but] in fact New Century Mortgage Corp still had possession of the mortgage and the note.” Id.

         Thus, the gravamen of Hubbard's factual allegations is that his mortgage was assigned by Nationwide to New Century, and so the later assignment to Deutchse Bank was invalid. Because New Century went bankrupt in 2008, Hubbard believes that ...

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