United States District Court, D. Maryland
JOHN C. WALLACE and ANNIE WALLACE Plaintiffs
OCWEN LOAN SERVICING, LLC Defendant
J. MESSITTE, UNITED STATES DISTRICT JUDGE.
and Annie Wallace sued Ocwen Loan Servicing
(“Ocwen”) in the Circuit Court for Prince
George's County on June 2, 2016 alleging violations of
the Maryland Consumer Protection Act (“MCPA”),
Md. Code Ann., Com. Law § 13-101, et seq., and
breach of contract in connection with the modification of the
terms of their mortgage loan. ECF No. 2. Ocwen removed the
matter to this Court and has filed a Motion to Dismiss. ECF
No. 8. For the reasons discussed below, the Court will GRANT
FACTUAL AND PROCEDURAL BACKGROUND
November 2013, the Wallaces requested a modification of the
mortgage on their primary residence at 6907 Aspen Leaf Court,
Bowie, Maryland, due to severe financial hardship. ECF No. 2
¶¶ 2, 3. Indymac Bank Home Loan Servicing
(“Indymac”), then their loan servicer, offered
the Wallaces reduced payments for a trial period (hereinafter
“Trial Plan”), agreeing that, “providing
[that] the terms of the agreement are met and your financial
situation shows affordability to service your debts,
[Indymac] will re-evaluate your financial situation in order
to review a loan modification . . . ” ECF No. 8-3 at
Wallaces apparently believed their modification was part of
the Government's Home Affordable Modification Program
(“HAMP”). In modifications made pursuant to the
HAMP program, a certified lender and borrower negotiate a new
monthly payment and if the borrower makes that payment in
full and on time during a several month “trial period,
” the new monthly payment is formalized in a loan
the Wallaces made their first payment, the rights to service
their loan were transferred to Ocwen Loan Servicing
(“Ocwen”). ECF No. 2. ¶ 4. The Wallaces
allege that Ocwen failed to honor the terms of the agreement
they had made with Indymac, offering them instead loan
modification terms that were significantly less generous.
Id. ¶ 6. Because they could not afford those
new terms, the Wallaces further allege that their credit
scores have suffered and they are in danger of foreclosure.
Id. ¶¶ 9, 10.
counters that it was under no obligation to make permanent
the reduced payments that the Wallaces had negotiated with
Indymac after the term of the Trial Plan because that
agreement was not made pursuant to the HAMP program. ECF No.
8-2 at 5. Instead, says Ocwan, Indymac only committed to
“re-evaluate” the Wallaces' financial
situation, which Ocwen did, and as a result, offered them a
different loan modification. Id.
Wallaces, represented by counsel, filed suit in the Circuit
Court of Prince George's County on June 2, 2016. Ocwen
was served with process on July 5, 2016 and timely removed
the case to this Court on August 3, 2016. Ocwen filed a
Motion to Dismiss on August 8, 2016, which has not been
opposed by Plaintiffs.
a complaint adequately states a claim for relief is normally
judged under Federal Rule of Civil Procedure 8(a)(2), which
requires “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). To survive a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6), a plaintiff must
plead facts sufficient to “state a claim to relief that
is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). This standard requires “more than a sheer
possibility that a defendant has acted unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009). Although a court will accept
factual allegations as true, “[t]hreadbare recitals of
the elements of a cause of action, supported by mere
conclusory statements do not suffice.” Id. A
court can look to materials attached to a motion to dismiss
without transforming it into a motion for summary judgment
where they “(1) [are] clearly integral to, and [were]
relied upon in, [the] complaint; and (2) [the opposing party]
does not dispute [their] authenticity. Blankenship v.
Manchin, 471 F.3d 523, 526 n.1 (4th Cir. 2006).
Wallaces' claims under MCPA contain allegations of fraud.
Claims for fraud must meet the heightened pleading standard
of Rule 9(b), which requires a party to “state with
particularity the circumstances constituting fraud or
mistake. Malice, intent, knowledge, and other conditions of a
person's mind may be alleged generally.”
Fed.R.Civ.P. 9(b). A plaintiff alleging claims that sound in
fraud must, at a minimum, describe the “the time,
place, and contents of the false representations, as well as
the identity of the person making the misrepresentation and
what he obtained thereby.” Weidman v. Exxon Mobil
Corp., 776 F.3d 214, 219 (4th Cir. 2015) (internal
quotation marks omitted).
Complaint alleges two causes of action. First, the Wallaces
allege that Ocwen violated the MCPA by representing to the
Wallaces that the payments owed under Ocwen's proposed
modification would be different than those under the Trial
Plan. ECF No. 2 ¶ 22. Second, the Wallaces allege that
Ocwen failed to “properly service” the
Wallaces' mortgage loan account by (1) failing to
“apply proper HAMP guidelines” to their
modification application, and (2) failing to “honor the
HAMP modification agreement made with Indymac.” ECF No.
2 ¶ 26.
MCPA prohibits “unfair or deceptive trade practices,
” defined, among other things, as any “false,
falsely disparaging, or misleading oral or written
statement[s] . . . which has the capacity, tendency, or
effect of deceiving or misleading consumers.” Md. Code
Ann., Com. Law § 13-301(1). Under Maryland law, in
“attempting to collect an alleged debt, ” a
collector may not “[c]laim, attempt, or threaten to
enforce a right with knowledge that the right does not
exist.” Md. Code Ann., Com. Law § 14-202 (8). A
“collector” is “a person collecting or
attempting to collect an alleged debt arising out of a
consumer transaction.” Md. Code Ann., Com. ...