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Currie v. Wells Fargo Bank, N.A.

United States District Court, Fourth Circuit

May 23, 2013

MICHAEL CURRIE et al., Plaintiffs,
v.
WELLS FARGO BANK, N.A. et al., Defendants.

MEMORANDUM OPINION

ALEXANDER WILLIAM, Jr., District Judge.

The instant case sounds in mortgage fraud. Plaintiffs have filed an eight-Count Complaint totaling forty-six pages. Defendants have filed a Motion to Dismiss in which they seek the dismissal of each and every Count of the Complaint. The Court has carefully reviewed the record and deems a hearing unnecessary. For the following reasons, the Court GRANTS IN PART AND DENIES IN PART Defendants' Motion to Dismiss.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs Michael Currie and Kimberly Currie are residents of the state of Maryland. Before a foreclosure sale, Plaintiffs owned real property located at 4305 Thames Court, Upper Marlboro, Maryland 20772 (the Property).

Defendant Wells Fargo Bank, N.A. (Wells Fargo) is a national banking association with its principal place of business in Arizona. Plaintiffs allege that Wells Fargo also does business as Wells Fargo Home Mortgage (Wells Fargo Home), America's Servicing Company (America Servicing), and Premier Asset Services (Premier Asset). Except as otherwise indicated, the Court collectively refers to Wells Fargo, Wells Fargo Home, America Servicing, and Premier Asset as "Wells Fargo." Defendant HSBC Bank USA, N.A. (HSBC) is a bank and served as Trustee for Wells Fargo Home Mortgage Asset-Backed Securities 2007-M09 Trust (the Trust). The Trust owned the mortgage loan on Plaintiffs' Property and purchased the Property at a January 20, 2012 foreclosure sale.

On February 27, 1997, Plaintiffs purchased the Property. In 2007, Plaintiffs refinanced their mortgage with Wells Fargo. The amount of the refinanced mortgage was $270, 000. In late 2008, Plaintiffs experienced financial hardships. Therefore, Plaintiffs contacted Wells Fargo and asked for a loan modification. An unnamed Wells Fargo representative told them that they had to be in default for ninety days to be "considered" for a loan modification. Doc. No. 1 ¶ 34. In early 2009, Plaintiffs defaulted on their home loan, allegedly in reliance on Wells Fargo's representations.

Sometime thereafter, Plaintiffs requested a loan modification. In late May 2009, Wells Fargo did not provide Plaintiffs with the loan modification they requested. Instead, it offered them a "Special Forbearance Agreement" (Agreement). Under the Agreement, Plaintiffs would have to make monthly payments of $2, 600, which was higher than their regular monthly payment of $1, 950. Around this time, Wells Fargo informed Plaintiffs that the Agreement was a prerequisite to a loan modification and that their request for modification was denied "because of a failure to adhere to the terms of the forbearance plan." Id. ¶ 37.

Shortly thereafter, Wells Fargo Home sent Plaintiffs a foreclosure notice. The notice identified Wells Fargo Home as the secured party when Wells Fargo Home was merely the servicer of the loan and the Trust was the actual secured party. Plaintiffs also allege that Wells Fargo Home concealed the identity of the Trust so that Plaintiffs would not know how to verify the false information that was allegedly provided to them.

Plaintiffs requested another loan modification. In connection with this request, Wells Fargo instructed Plaintiffs to send in a good faith payment of $2, 400, which was delivered to Wells Fargo on August 31, 2009. On the same day, however, Wells Fargo denied Plaintiffs' request, asserting that Plaintiffs failed to submit all the required information. Wells Fargo failed to specify what documents were missing. Wells Fargo eventually returned the payment, stating that no plan was in place to receive the funds.

Plaintiffs hired an attorney. The attorney inquired about the status of Plaintiffs' request. Wells Fargo informed the attorney that Plaintiffs did not provide the required documentation and/or did not provide it in a timely fashion. Wells Fargo also stated that it had closed Plaintiffs' loan modification application. Finally, Wells Fargo stated that Plaintiffs needed to submit updated documentation because the old documentation did not comply with federal guidelines.

Plaintiffs faxed Wells Fargo the requested documentation twice in October 2009: once in early October and once on October 30. Yet, on October 30, 2009, Wells Fargo informed Plaintiffs that it had denied their request because it had not received the required information.

In November 2009, Plaintiffs again faxed the requested information. Plaintiffs' attorney spoke with a Wells Fargo representative who told him that Wells Fargo had received all the necessary information. Wells Fargo notified Plaintiffs in a separate communication that it was processing their request and expected to render a final decision within 45 to 60 days.

On December 17, 2009, Wells Fargo offered Plaintiffs another Agreement (Second Agreement). Although the Second Agreement stated that Wells Fargo would accept reduced monthly payments on a temporary basis, the monthly payments thereunder exceeded the $1, 932 monthly payments that Plaintiffs were required to make under the home loan. The Second Agreement provided that Wells Fargo would suspend foreclosure proceedings once the initial installment was received and would continue to do so as long as Plaintiffs adhered to it. Plaintiffs signed the Second Agreement on December 28, 2009. However, Plaintiffs made only two of the three payments required thereunder.

In late March 2010, Wells Fargo sent Plaintiffs another notice of intent to foreclose. In the following month, Plaintiffs reapplied for a loan modification under the Home Affordable Modification Program (HAMP).[1] On June 29, 2010, Plaintiffs faxed the requested documentation to Wells Fargo. But, in July 30, 2010, Wells Fargo denied the request on the ground that Plaintiffs failed to provide the requested documentation.

Apparently, Plaintiffs applied for another loan modification. In response, Wells Fargo notified Plaintiffs in August 2010 that it would consider their request upon the submission of certain documentation. Plaintiffs allege that they had already sent Wells Fargo the information specified in the August 2010 communication.

In late September 2010, Wells Fargo filed an "Order to Docket" in the Circuit Court for Prince George's County, Maryland to initiate foreclosure proceedings. In support of its Order to Docket, Wells Fargo apparently filed an "allonge" to Plaintiffs' mortgage note dated May 25, 2007. According to Plaintiffs, an allonge is basically a slip of paper that allows for information to be added to the note when there is insufficient space on the note itself. Plaintiffs state that the allonge purports to be an assignment of the note to HSBC as Trustee for the Trust. Plaintiffs then state that Wells Fargo Home apparently first recognized HSBC and not Wells Fargo as the secured party around the time Wells Fargo Home was preparing to file the Order to Docket. Plaintiffs further allege that Wells Fargo prepared three foreclosure notices, but that only the last one filed with the Order to Docket identified HSBC as the secured party.[2] Based on these and other irrelevant allegations, Plaintiffs conclude that it is "highly likely" that the allonge was prepared and attached to the note at the time the Order to Docket was filed, not on May 25, 2007 as represented. See id. ¶¶ 70-74.

In the same month, Wells Fargo sent another Agreement (Third Agreement). The Third Agreement provided that Plaintiffs would have to pay $886 in September 2010 and $2, 949.24 for October through December 2010. Plaintiffs allege that they "agreed to it and made all of the required payments, completing the plan in December 2010." Id. ¶ 78.[3]

In January 5, 2011, Plaintiffs spoke with a Wells Fargo representative. The representative told them that they were "approved" for a loan modification at a 4% fixed interest rate with a monthly payment of $1, 851.52. The representative further stated that two payments were needed in the January 2011/February 2011 time period. Plaintiffs allege that they made both of these payments on time. Yet, in February 2011, Wells Fargo notified Plaintiffs that they were ineligible for mortgage assistance because they failed to provide it with all the information needed within the required time frame.

Thereafter, Plaintiffs and Wells Fargo engaged in back-and-forth communications regarding whether Plaintiffs had submitted the required information. Allegedly, Wells Fargo falsely stated that Plaintiffs were ineligible for a loan modification because of nonresponsiveness to its requests. Plaintiffs add that Wells Fargo made this statement to facilitate the state court foreclosure proceedings.

On April 18, 2011, Plaintiffs and Wells Fargo participated in mediation in connection with the foreclosure proceedings. Plaintiffs allege that the Parties reached a Mediation Agreement whereby Wells Fargo would "evaluate" Plaintiffs for a loan modification if Plaintiffs submitted certain documentation by April 29, 2011. Plaintiffs allegedly faxed Wells Fargo this information in a timely manner.

In August 2011, Wells Fargo declined to modify Plaintiffs' home loan, asserting that Plaintiffs failed to timely submit all the requested information. Sometime later, Wells Fargo allegedly told an unnamed "public official" that it did not consider Plaintiffs' loan modification application because Plaintiffs "asked to be considered for a short sale." Id. ¶ 92.

At some point, Plaintiffs applied for a loan modification pursuant to the Home Affordable Foreclosure Alternative (HAFA). Wells Fargo denied this application on the basis that Plaintiffs failed to return the required documentation. In this communication, Wells Fargo stated that it could not offer Plaintiffs a short sale or deed-in-lieu of foreclosure. Subsequently, however, Wells Fargo allowed Plaintiffs to participate in the short sale program.

On January 6, 2012, Plaintiffs submitted a signed, bona fide sales contract to Wells Fargo at a short sale price of $175, 000. Plaintiffs allege that Wells Fargo indicated a willingness to consider their bid. However, all of Plaintiffs' information suddenly disappeared from Wells Fargo's online short-sale database available to Plaintiffs' realtor. Plaintiffs were subsequently informed that Wells Fargo could not continue the short sale review because the deadline for the foreclosure date was rapidly approaching. Plaintiffs add that Wells Fargo had "unilateral ability" to extend the date of the foreclosure sale.

The foreclosure sale took place on January 20, 2012. Plaintiffs' Property was purchased for $160, 300. This price is $14, 700 less than Plaintiffs' short sale purchaser would have paid and $68, 700 less than the fair market value of the Property. The Circuit Court for Prince George's County ratified the foreclosure sale on March 27, 2012.

Plaintiffs filed the instant Complaint on August 17, 2012. Doc. No. 1. Plaintiffs' Complaint contains eight Counts. The first four Counts are for violations of various Maryland consumer/debtor protection statutes. Counts V-VIII, by contrast, assert claims for negligence, breach of contract, and promissory estoppel. On October 1, 2012, Defendants filed a Motion to Dismiss. Doc. No. 10. Although Defendants raise numerous arguments in their Motion to Dismiss, one recurring refrain is that numerous courts have held that plaintiffs cannot assert claims similar to the ones Plaintiffs are asserting based on alleged violations of the HAMP. Plaintiffs generally respond that this ...


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