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Jones v. CitiMortgage, Inc.

United States District Court, D. Maryland

March 31, 2016

STANLEY AND DEBRA JONES Plaintiffs
v.
CITIMORTGAGE, INC. Defendant

MEMORANDUM OPINION

PETER J. MESSITTE UNITED STATES DISTRICT JUDGE

Stanley and Debra Jones brought this suit, pro se, against CitiMortgage, Inc., alleging fraud, theft, forgery, and predatory lending related to the Home Affordable Modification Agreement that the parties entered into in 2010. CitiMortgage has moved to dismiss the suit on the ground that the Complaint fails to state a claim for which relief may be granted. Def.’s Mot. Dismiss, ECF No. 7. The Court agrees and, for the reasons that follow, will GRANT the Motion and DISMISS this suit.

I.

Relevant background facts to this case are found in the Amended Complaint in a related case, Jones v. Nationstar Mortgage LLC, Civ. No. 14-2888-PJM, which the Joneses attached as an exhibit to the two-page Complaint in the present case. See Compl., Ex. A4, Amend. Compl., Jones v. Nationstar Mortgage, ECF No. 2-4.[1]

According to the Amended Complaint in Jones v. Nationstar Mortgage, on April 9, 2007, the Joneses obtained a loan from PHH Mortgage Corporation (“PHH”) in the amount of $374, 000, in order to refinance their property at 2322 Springdale Lane, Waldorf, Maryland. Compl., Ex. A4, Amend. Compl. ¶ 12, Jones v. Nationstar Mortgage, Civ. No. 14-2888-PJM, ECF No. 2-4. To secure the PHH Note, the Joneses executed a Deed of Trust on the property, which named PHH as the lender and Mortgage Electronic Registration System, Inc. (“MERS”) as the “beneficiary” of the Deed of Trust, “acting solely as a nominee for Lender.” Id. ¶¶ 13-15.

At some point in 2007 or 2008, the Federal National Mortgage Association (“Fanny Mae”) became the owner of the PHH Note through a securitization process. See Pls.’ Resp. Opp’n Mot. Dismiss, Ex. 2, Property Securitization Analysis Report, Carrigan Aff. ¶¶ 8-7, ECF No. 15-2. CitiMortgage does not dispute that Fannie Mae became the owner of the loan, and states that when it became the servicer of the loan on May 1, 2008, the loan was already owned by Fannie Mae. See Def.’s Suppl. Br. Mot. Dismiss, Ex. 1, Dauster-Adams Aff. ¶¶ 11-12, ECF No. 19-1.

On May 17, 2010, the Joneses signed a Home Affordable Modification Agreement (“Modification Agreement”), which lists CitiMortgage as the “Lender” and MERS as the Lender’s “nominee.” See Compl., Ex. A1, Modification Agreement at 1, ECF No. 2-1. The Modification Agreement states that it is intended to “amend and supplement (1) the Mortgage on the Property, and (2) the Note secured by the Mortgage, ” id. at 1, and that the “new Principal balance of my Note will be $401, 621.17.” Id. ¶ 3.B. Of the $401, 621.17 in principal, the terms of the agreement specify that $165, 203.72 is the “Interest Bearing Principal Balance, ” which will require monthly payments beginning on June 1, 2010, while the remaining $236, 417.45 is the “Deferred Principal Balance, ” which will not require monthly payments or accrue interest until June 1, 2015. See Id. ¶ 3.C. The Modification Agreement was recorded in the land records of Charles County on November 5, 2010. See Id. at 1, 10; Pls.’ Resp. Opp’n Mot. Dismiss, Ex. 2, Property Securitization Analysis Report, at 40, ECF No. 15-2.

On May 24, 2013, MERS, as nominee for PHH and its successors and assignees, executed an Assignment of the Deed of Trust in favor of Nationstar Mortgage, LLC (“Nationstar”) as the assignee.[2] See Compl., Ex. A4, Amend. Compl. ¶ 16, Jones v. Nationstar Mortgage, ECF No. 2-4. On June 13, 2014, Carrie Ward, as Nationstar’s substitute trustee, commenced foreclosure proceedings against the Joneses’ property in the Circuit Court for Charles County, Maryland (No. 08C14001486), alleging default on the payment of the current note. See Id. ¶¶ 23-27. Ward filed an “Ownership Affidavit” in the foreclosure proceedings that purported to certify that Nationstar Mortgage was the servicer of the loan, which was owned by Fannie Mae. See Id. ¶¶ 26-27.

On August 11, 2014, the Joneses, pro se, filed an action to quiet title against Nationstar in the Circuit Court for Charles County, Maryland (No. 08C14002043), which Nationstar removed to this Court. See Jones v. Nationstar Mortgage, Notice of Removal, ECF No. 1.[3] After the Joneses obtained counsel, they filed an Amended Complaint with additional claims, which were dismissed without prejudice to permit issues related to the Joneses’ claim to title to be resolved in the state foreclosure proceedings.[4] See Jones v. Nationstar Mortgage, Order of Dismissal, ECF No. 34.

The Joneses, once again pro se, filed the present suit against CitiMortgage on June 29, 2015 in the Circuit Court for Charles County, Maryland (No. 08C15001621), which CitiMortgage removed to this Court on August 5, 2015. See Notice of Removal, ECF No. 1.

The Complaint in the present suit brings claims of “fraud, theft, forgery and predatory lending” against CitiMortgage, alleging that the Modification Agreement was an “illegal transaction.” Compl. at 1, ECF No. 2. The Joneses assert as evidence of this supposed illegal transaction the fact that the Modification Agreement “increased the princip[al] amount on said property . . . from $374, 000 to $401, 621, ” an increase of $27, 621. Id. CitiMortgage purportedly “performed the Home Affordable Modification transaction on November 1, 2010” despite the fact that “Nationstar Mortgage, LLC and PHH Mortgage Corp. (PHH) with MERS claimed to be the holder of the note.” Id. The Joneses seek relief in the amount of $276, 210 in damages. Id.

On August 12, 2015, CitiMortgage moved to dismiss the Complaint for failure to state a claim for relief. ECF No. 7. The Joneses filed a Response in Opposition on October 2, 2015, ECF No. 15, to which CitiMortgage replied on October 15, 2015. ECF No. 16.

On March 17, 2015, the Court issued a Memorandum Order, requesting that CitiMortgage file a short supplemental brief addressing its relationship to the note at the time of the Modification Agreement. ECF No. 17. CitiMortgage filed a Supplemental Brief in Support of the Motion to Dismiss, which elaborated that, as the servicer of the loan, it was authorized to enter into a Modification Agreement by Fannie Mae, the owner of ...


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