United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION AND ORDER
W. Grimm United States District Judge.
Darla Moss fell behind on the payments on her mortgage loan
from Defendant Federal National Mortgage Association
(“Fannie Mae”), which Defendant Ditech Financial,
LLC (“Ditech”), f/k/a Green Tree Servicing, LLC
serviced. Am. Compl. ¶¶ 17-18, 34, 39, ECF No. 18.
Defendants’ agent BWW Law Group, LLC
(“BWW”) instituted a foreclosure action and
informed Moss, in “a quote good through October 17,
2014” (“Reinstatement Quote”), that she
could bring her loan current and avoid foreclosure by paying
a “Reinstatement Amount” of $22, 471.29, which
would cure the default and cover attorney’s fees and
expenses up until October 17, 2014. Id. ¶¶
19, 34-35, 40-41. Moss verified the amount and then paid $22,
471.29 on October 10, 2014. Id. ¶¶ 42-43.
Thereafter, Defendants dismissed the foreclosure action but
increased her monthly payments by $290.32 to cover
“corporate advance[s], ” such as legal fees and
expenses BWW charged, all but $165.00 of which had been
incurred before October 17, 2014. Id. ¶¶
46-48 & Ex. I, ECF No. 21-8. Unable to afford this
additional monthly expense and believing that Defendants had
waived the uncharged corporate advances through the
Reinstatement Quote, Moss filed suit against Defendants.
Compl., ECF No. 2.
claims that Ditech and Fannie Mae violated various state and
federal statutes, breached the agreements the parties entered
into in the Deed of Trust and Reinstatement Quote, and acted
negligently in representing the Reinstatement Amount to be
sufficient to bring her loan current and then increasing her
monthly payments to cover expenses incurred before she paid
the Reinstatement Amount. Am. Compl. ¶¶
Defendants have moved to dismiss, and the parties fully
briefed the motion. ECF Nos. 22, 22-1, 26, 26-1, 29. A
hearing is unnecessary. See Loc. R. 105.6.
has not stated a claim against Fannie Mae under the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§§ 1692 et seq. (Count II), or against
either Defendant under the Real Estate Settlement and
Procedures Act (“RESPA”), 12 U.S.C. §§
2601 et seq. (Count I), or in negligence (Count
VIII), and those claims are subject to dismissal. Yet,
Defendants have not shown that Moss failed to state a claim
against Ditech under the FDCPA (Count II), or against either
Defendant for breach of contract (Counts III-IV) or a
declaratory judgment (Count IX). Nor have they demonstrated
that she failed to state a claim for violations of the
Maryland Consumer Protection Act (“MCPA”), Md.
Code Ann., Com. Law §§ 13-101 et seq.; the
Maryland Mortgage Fraud Protection Act (“MMFPA”),
Md. Code Ann., Real Prop. §§ 7-401 et
seq.; or the Maryland Consumer Debt Collection Act
(“MCDCA”), Md. Code Ann., Com. Law §§
14-201 et seq. (Counts V-VII). Accordingly, I will
grant the motion in part and deny it in part, and dismiss
Counts I and VIII in their entirety and Count II as to Fannie
Rule of Civil Procedure 12(b)(6) provides for “the
dismissal of a complaint if it fails to state a claim upon
which relief can be granted.” Velencia v.
Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md.
Dec. 13, 2012). This rule’s purpose “‘is to
test the sufficiency of a complaint and not to resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.’” Id.
(quoting Presley v. City of Charlottesville, 464
F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears
in mind the requirements of Fed.R.Civ.P. 8, Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft
v. Iqbal, 556 U.S. 662 (2009), when considering a motion
to dismiss pursuant to Rule 12(b)(6). Specifically, a
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief,
” Fed.R.Civ.P. 8(a)(2), and must state “a
plausible claim for relief, ” as “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice, ”
Iqbal, 556 U.S. at 678-79. See Velencia,
2012 WL 6562764, at *4 (discussing standard from
Iqbal and Twombly). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678.
allegations of deceptive trade practices in violation of the
Maryland Mortgage Fraud Protection Act (“MMFPA”),
Md. Code Ann., Real Prop. §§ 7-401 et
seq., and the Maryland Consumer Protection Act
(“MCPA”), Md. Code Ann., Com. Law §§
13-101 et seq., are “subject to the heightened
pleading standards of Federal Rule of Civil Procedure
9(b).” Williams v. Dee Miracle Auto Grp. LLC,
No. ELH-15-2466, 2016 WL 3411640, at *4 (D. Md. June 22,
2016) (discussing MCPA) (quoting Combs v. Bank of Am.,
N.A., No. GJH-14-3372, 2015 WL 5008754, at *6 (D. Md.
Aug. 20, 2015)); Crowley v. JPMorgan Chase Bank,
Nat’l Ass’n, No. RDB-15-00607, 2015
WL 6872896, at *10 (D. Md. Nov. 9, 2015) (discussing MMFPA).
Rule 9(b) states that “in alleging a fraud or mistake,
a party must state with particularity the circumstances
constituting the fraud or mistake. . . .” Such
allegations [of fraud] typically “include the
‘time, place and contents of the false representation,
as well as the identity of the person making the
misrepresentation and what [was] obtained
thereby.’” In cases involving concealment or
omissions of material facts, however, meeting Rule
9(b)’s particularity requirement will likely take a
Piotrowski v. Wells Fargo Bank, N.A., No.
DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013)
(citations omitted); see Spaulding v. Wells Fargo Bank,
N.A., No. 12-1973, 2013 WL 1694549, at *9 (4th Cir. Apr.
reviewing a motion to dismiss, “[t]he court may
consider documents attached to the complaint, as well as
documents attached to the motion to dismiss, if they are
integral to the complaint and their authenticity is not
disputed.” Sposato v. First Mariner Bank, No.
CCB-12-1569, 2013 WL 1308582, at *2 (D. Md. Mar. 28, 2013);
see CACI Int’l v. St. Paul Fire & Marine Ins.
Co., 566 F.3d 150, 154 (4th Cir. 2009); see
also Fed. R. Civ. P. 10(c) (“A copy of a written
instrument that is an exhibit to a pleading is a part of the
pleading for all purposes.”). Moreover, where the
allegations in the complaint conflict with an attached
written instrument, “the exhibit prevails.”
Fayetteville Investors v. Commercial Builders, Inc.,
936 F.2d 1462, 1465 (4th Cir. 1991); see Azimirad v. HSBC
Mortg. Corp., No. DKC-10-2853, 2011 WL 1375970, at *2-3
(D. Md. Apr. 12, 2011).
Estate Settlement and Procedures Act (Count I)
enacted the Real Estate Settlement and Procedures Act
(“RESPA”), 12 U.S.C. §§ 2601 et
seq., in part “to insure that consumers throughout
the Nation are provided with greater and more timely
information on the nature and costs of the settlement
process.” 12 U.S.C. § 2601(a). To this end, a loan
servicer first must acknowledge receipt of a qualified
written request (“QWR”) within five days of
receiving it. 12 U.S.C. § 2605(e)(1). Then, within
thirty days, the servicer must either (A)
“make appropriate corrections in the account of the
borrower, ” and “transmit to the borrower a
written notification of such correction”; or
(B) “after conducting an investigation, provide the
borrower with a written explanation or clarification that
includes . . . a statement of the reasons for which the
servicer believes the account of the borrower is correct as
determined by the servicer”; or (C) if the
borrower requested information rather than a correction,
investigate and provide the information or explain why it is
unable to do so. See 12 U.S.C. §
2605(e)(2)(A)-(C). Significantly, the provision is
disjunctive and therefore, a failure to “make
appropriate corrections, ” as provided for in §
2605(e)(2)(A), is not necessarily a violation of §
2605(e)(2), as the servicer may have complied with subsection
(B) or (C) instead. See id.
sent a QWR by mail and by fax to Ditech on February
4, 2015. Am. Compl. ¶ 50 & Ex. E, ECF No. 21-4.
Ditech received it by mail on February 9, 2015, acknowledged
receipt three days later, on February 12, 2015, and sent a
substantive response on March 3, 2015. Am. Compl. ¶
54-55 & Exs. F-G, ECF Nos. 21-5 - 21-6. Moss claims that
Defendants violated § 2605 when “Ditech, as the
agent of FNMA, failed to timely respond to [her February 4,
2015] qualified written request and failed to make
appropriate corrections to the account” and
“failed to take timely action to correct errors
relating to allocation of payments, final balances for
purposes of reinstating and paying off the loan, or avoiding
foreclosure, or other standard servicer’s
duties.” Am. Compl. ¶¶ 72, 74.
argue that their February 12, 2015 acknowledgment of
Moss’s QWR was timely, as they require QWRs to be
submitted by mail, such that it was the February 9, and not
the February 4, date that triggered the five-day period for
acknowledging receipt. Defs.’ Mem. 7-8. They also
contend that their March 3, 2015 substantive response was
timely and that, although they did not correct the purported
error that Moss identified, they complied with §
2605(e)(2)(B) by “providing Plaintiff with an
explanation as to why [Ditech] believed the account
information was correct, ” such that they were not
required to correct the purported error. Id. at 9.
Opposition, Moss does not challenge the timeliness of
Defendants’ responses. See Pl.’s
Opp’n 6. Rather, she insists that Defendants’
March 3, 2015 response “was false and materially
misleading” and consequently fell “woefully short
of meeting the requirements” of §
2605(e)(2). Id. Thus, it is undisputed that
Defendants sent Moss a response but did not correct her
account as she requested. See 2d Am. Compl. ¶
55; Defs.’ Mem. 9. Therefore, they did not comply with
noted, § 2605(e)(2) provides the servicer with two
alternative responses to a QWR, in lieu of making
“appropriate corrections.” See 12 U.S.C.
§ 2605(e)(2)(A)-(C). The March 3, 2015 letter states:
“Records indicate that additional fees and costs were
assessed after the reinstatement quote was provided to you.
These are due and payable. We have enclosed a payment history
of the account for your review.” Am. Compl. Ex. G.
Thus, it shows that Defendants reviewed their records, and
the letter provides “a written explanation or
clarification that includes . . . a statement of the reasons
for which the servicer believes the account of the borrower
is correct.” See 12 U.S.C. §
2605(e)(2)(B). On the face of the letter, Defendants complied
with § 2605(e)(2)(B). Insofar as Moss challenges the
veracity of their response, RESPA is not the proper vehicle
for recovering from damages from false or misleading
statements. See Yacoubou v. Wells Fargo Bank, N.A.,
901 F.Supp.2d 623, 630 (D. Md. 2012) (“Unlike the
defamation tort, which depends in part on the truth or
falsity of communications, RESPA governs the timing
of communications.” (emphasis added)), aff’d
sub nom. Adam v. Wells Fargo Bank, 521 F. App’x
177 (4th Cir. 2013). Consequently, Moss fails to state a
claim for a violation of RESPA.
Debt Collection Practices Act (Count II)
Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. §§ 1692 et seq.,
“‘protects consumers from abusive and deceptive
practices by debt collectors, and protects non-abusive debt
collectors from competitive disadvantage.’”
Stewart v. Bierman, 859 F.Supp.2d 754, 759 (D. Md.
2012) (quoting United States v. Nat’l Fin. Servs.,
Inc., 98 F.3d 131, 135 (4th Cir. 1996) (quotation
omitted)). To state a claim for relief under the FDCPA,
Plaintiff must allege that “(1) [she] has been the
object of collection activity arising from consumer debt, (2)
the defendant is a debt [ ] collector as defined by the
FDCPA, and (3) the defendant has engaged in an act or
omission prohibited by the FDCPA.” Id. at
759-60 (citation omitted); see Ademiluyi v. PennyMac
Mortg. Inv. Trust Holdings I, LLC, 929 F.Supp.2d 502,
524 (D. Md. 2013) (citing 15 U.S.C. § 1692). Moss claims
that Defendants violated the FDCPA by “engaging in . .
. conduct the natural consequences of which is to harass,
oppress, or abuse any person in connection with the
collection of a debt, ” in violation of 15 U.S.C.
§1692(d), “using false, deceptive, or misleading
representations or means in connection with the collection of
a debt, ” in violation of 15 U.S.C. §1692(e), and
“using unfair or unconscionable means to collect or
attempt a debt, ” in violation of 15 U.S.C.
§1692(f).” Am. Compl. ¶¶ 79-81.
contend that Moss cannot state an FDCPA claim against them
because neither is a debt collector for purposes of the
FDCPA. Defs.’ Mem. 10. It is undisputed that Ditech is
a mortgage loan servicer and Fannie Mae is a creditor.
See Am. Compl. ¶ 28; Defs.’ Mem. 10.
Defendants argue that servicers and creditors do not qualify
as “debt collectors” unless the loan was in
default when Ditech began servicing it and when Fannie Mae
acquired the Note. Id. Moss counters that
“Ditech became the servicer of Ms.
Moss’s loan when she was already in default, ”
such that “Ditech constitutes a debt
collect[or] under the FDCPA.” Pl.’s Opp’n
8-9 (emphasis added).
in her Opposition, Moss does not assert that Fannie
Mae qualifies as a debt collector. Indeed, in Henson
v. Santander Consumer USA, Inc., the Fourth Circuit
recently concluded that “the default status of a debt
has no bearing on whether a person qualifies as a debt
collector” or a creditor. 817 F.3d 131, 135 (4th Cir.
2016). Observing that 15 U.S.C. § 1692a “excludes
from the definition of creditor ‘any person to the
extent that he receives an assignment or transfer of a
debt in default solely for the purposes of
facilitating collection of such debt for another,
” the Fourth Circuit further concluded that the
exclusion does not apply when a person acquires debt
“for its own account, ” instead of “on
behalf of others.” Id. Thus, it is immaterial
whether the debt was in default when Fannie Mae acquired it,
as Fannie Mae acquired it “for its own account, ”
as a creditor. See Id. Therefore, Moss cannot state
an FDCPA claim against Fannie Mae, and this claim is subject
to dismissal with regard to Fannie Mae. See id.
regard to Ditech, as a loan servicer, the company indeed
would qualify as a debt collector if the loan were in default
when Ditech began servicing it. See id.; 15 U.S.C.
§ 1692a. Moss does not allege explicitly that Ditech is
a debt collector or that the loan was in default when Ditech
began servicing it. But she does allege that (1) Ditech began
servicing the loan on September 1, 2013; (2) her monthly
payment was $787.94 (which is equivalent to $9, 455.28 per
year); (3) she was sent a Notice of Intent to Foreclose on
October 28, 2013; and (4) as of October 17, 2014, the amount
to cure her default, including attorney’s fees and
expenses, was $22, 471.29 (which is more than twice what
Moss’s monthly payments would have totaled for the
period that Ditech serviced her loan). Am. Compl.
¶¶ 31-34, 39-41. Additionally, the April 3, 2015
response to Moss’s second QWR (dated March 17, 2015)
lists “corporate advances, ” that is, amounts due
for legal fees and costs, as far back as August 21, 2013. Am.
Compl. Ex. I, ECF No. 21-8. Thus, while inartfully pleaded,
it is clear that, drawing all reasonable inferences in
Moss’s favor, as I must, she was in default when Ditech
began servicing her loan on September 1, 2013, and her FDCPA
claim against Ditech is not subject to dismissal on this
ground. See Henson, 817 F.3d at 135; 15 U.S.C.
§ 1692a; Stewart, 859 F.Supp.2d at 759-60.
Mortgage Fraud Protection Act (Count V) and Maryland Consumer