United States District Court, E.D. Michigan, Southern Division
TRACY ADAMS, on behalf of herself and others similarly situated, Plaintiff,
SETERUS, INC., Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 7]
PAGE HOOD UNITED STATES DISTRICT JUDGE.
September 4, 2018, Plaintiff filed a two-count Complaint
alleging violations of the Fair Debt Collection Practices Act
(“FDCPA”) and the Michigan Regulation of
Collection Practices Act (“MRCPA”). On November
1, 2018, Defendant filed a Motion to Dismiss the Complaint.
Dkt. No. 7. The Motion has been fully briefed, and a hearing
was held on December 19, 2018. For the reasons that follow,
the Motion to Dismiss is granted in part and denied in part.
STATEMENT OF FACTS
owns a residential home located at 8890 Burlingame Avenue,
SW, Byron Center, Michigan. Dkt. No. 1 at ¶ 20. The home
is secured by a mortgage owned, backed, or controlled by
Federal National Mortgage Association (“Fannie
Mae”) that is serviced by Defendant. Id. at
¶ 21. Defendant acquired the servicing rights to
Plaintiff’s Fannie Mae-owned loan from CitiMortgage
when the loan was in a state of default. Id. at
¶ 27-29. As a mortgage servicer, Defendant contracts
with Fannie Mae to collect payments, fees, and other amounts
owed by the home owner and to provide other services to
investors relating to the home owner’s loan.
Id. at ¶ 24. Pursuant to its agreement with
Fannie Mae, Seterus provides notices to Plaintiff and
consumers like Plaintiff using a form letter that is
identified in the Complaint as the “Michigan Final
Letter.” Id. at ¶¶ 47-48.
Michigan Final Letter includes the following language:
A. THIS COMMUNICATION IS FROM A DEBT COLLECTOR AS WE
SOMETIMES ACT AS A DEBT COLLECTOR.
B. If full payment of the default amount is not received by
us . . . on or before [the Expiration Date], we will
accelerate the maturity date of your loan and upon such
acceleration the ENTIRE indebtedness of the loan, including
principal, accrued interest, and all other sums due
thereunder, shall, at once and without further notice, become
immediately due and owing.
C. If you send only a partial payment, the loan will still be
in default and we may keep the payment. Additionally, we will
keep the payment and may accelerate the maturity date.
D. IF THE DEFAULT IS NOT CURED ON OR BEFORE THE EXPIRATION
DATE, THE LOAN OWNER AND WE INTEND TO ENFORCE THE LOAN
OWNER’S RIGHTS AND REMEDIES AND MAY PROCEED WITHOUT
FURTHER NOTICE TO COMMENCE
E. You have the right to reinstate your loan after
acceleration and the right to bring a court action or assert
in the foreclosure proceedings the nonexistence of a default
or any other defense to acceleration and sale. If you
reinstate your loan after acceleration, the loan no longer
will be immediately due in full.
Dkt. No. 1 at Ex. A (and Ex. B, C, D, E, F, and G). See
also Dkt. No. 1 at ¶¶ 49, 50, 51, 78.
2016, a “legal mediation officer” (i.e.,
a Rule 30(b)(6) witness) designated by Defendant testified in
another case (Hager v. Seterus, Inc., 1:15-cv-222
(W.D. N.C. )) as follows:
Q. My understanding of your testimony just now is that if
Seterus receives a payment in response to an NC Final, then
the debt is no longer 45 days due and so that’s
sufficient to hold off the acceleration process?
A. That’s correct.
Q. Okay. And is that -- is that Seterus’ policy just
with regard to North Carolina?
A. Seterus’ policy for the loans where we are accepting
payments and we’re able to apply full contractual
payment to the loan.
Q. Okay. So in response to a letter like Exhibit 11 [a
Seterus North Carolina Final Letter], Seterus’ policy,
if they're accepting payments, is if they receive an
amount equal to a normal ...