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Darby v. PNC Mortgage, National Association

United States District Court, D. Maryland

December 13, 2016

TERESA DARBY
v.
PNC MORTGAGE, NATIONAL ASSOCIATION

          MEMORANDUM OPINION

          DEBORAH K. CHASANOW United States District Judge

         Presently pending and ready for resolution in this mortgage loan modification case is the motion for summary judgment filed by Defendant PNC Bank, N.A. (named in the complaint as “PNC Mortgage, National Association”) (“Defendant”). (ECF No. 33). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion for summary judgment will be granted.

         I. Background

         A. Factual Background[1]

         In September 2002, Plaintiff Teresa Darby (“Plaintiff”) and her ex-husband, James Darby, jointly purchased the residential real property located at 14209 Floral Park Drive, North Potomac, Maryland 20878 (the “Property”). (ECF No. 33-3, at 4). In April 2004, Plaintiff and Mr. Darby refinanced their mortgage loan (the “Loan”) with National City Mortgage Co., n/k/a PNC Bank, N.A. (Defendant), in the amount of $552, 000.00, secured by a deed of trust on the Property. (Id. at 5; ECF Nos. 33-4 ¶ 3; 36-1 ¶¶ 2-3). Plaintiff and Mr. Darby were co-owners of the Property and co-obligors on the Loan. Defendant is the mortgage loan servicer.

         Plaintiff and Mr. Darby have not made a regular monthly mortgage payment since December 2012, and Defendant has advanced the necessary sums to cover the Property's taxes and insurance since that time. (ECF Nos. 33-3, at 6-7; 33-4 ¶ 4). On March 18, 2013, Plaintiff and Mr. Darby had been advised that foreclosure would proceed. (ECF No. 33-4 ¶ 6; id. at 16). A Notice of Intent to Foreclose was issued on May 6, 2013, and an order to docket foreclosure was filed on July 16, 2013, in the Circuit Court for Montgomery County. (See ECF No. 33-5).

         Between November 2012 and March 2014, Plaintiff, Mr. Darby, and Defendant regularly communicated regarding loss mitigation procedures through letters and telephone calls. (ECF Nos. 33-3, at 8; 33-4 ¶¶ 5-8). Plaintiff and Mr. Darby submitted documents during this time, but never submitted a complete loss mitigation application. On February 18, 2013; March 18, 2013; March 26, 2013; April 27, 2013; July 18, 2013; December 12, 2013; and February 19, 2014, Defendant sent letters to Plaintiff and Mr. Darby advising them that they had not submitted all of the necessary documents for loss mitigation to be considered. (ECF No. 33-4 ¶¶ 3-8; id. at 12-31).[2] Plaintiff and Mr. Darby then requested foreclosure mediation, and an initial session was held on March 18, 2014. It was unsuccessful, and another session was scheduled for April 3, 2014. (ECF No. 33-7, at 2).

         Plaintiff affirms that she then submitted a loan modification application on March 21, 2014 (ECF No. 36-1 ¶ 4), but this application did not include Mr. Darby's financial information. Mr. Darby sent Defendant a letter dated March 26, stating that he no longer resided at the Property and “will not be responsible for making the payments on the home and therefore, am not providing any income or financial information for a refinance or loan modification.” (ECF No. 33-4, at 33). On March 31, Defendant again informed Plaintiff and Mr. Darby that Defendant was “unable to proceed with the review of your request for assistance because you did not provide us with the requested documents.” (Id. at 35). The parties did not reach an agreement during the second mediation session (ECF No. 33-7, at 2-3), and on April 18, 2014, the Circuit Court issued an order allowing foreclosure to proceed.

         The same day, Plaintiff filed a motion to stay the sale and dismiss the action pursuant to Maryland Rule 14-211. Defendant agreed several times to extend the date for its response to the Rule 14-211 motion so that Plaintiff could submit a complete loss mitigation application. Plaintiff submitted another loss mitigation application on October 17, 2014. (ECF No. 36-1 ¶ 5). Defendant identified additional documents needed for the application to be considered complete, relating to a second mortgage on the Property and to Mr. Darby. (Id. ¶¶ 6-9; ECF No. 33-4 ¶ 13; id. at 37-38). Defendant informed Plaintiff that she needed to submit a separation agreement or divorce decree and a quit claim deed if Mr. Darby would not cooperate with the application. Plaintiff's counsel informed Defendant that Mr. Darby did “not have the wherewithal to execute a separation agreement.” (EF No. 33-8, at 2). Without the documents, the loss mitigation review was again closed due to an incomplete submission on December 8. (ECF No. 33-4 ¶ 13). On February 5, 2015, Defendant responded to Plaintiff's Rule 14-211 motion. Plaintiff's request to dismiss the foreclosure case was denied by the Circuit Court following a hearing, but her request for a stay was granted with the condition that she make monthly loan payments.

         Plaintiff secured a final divorce decree on July 7, 2015, and submitted a complete loss mitigation application in August 2015.[3] (See ECF No. 33-4 ¶ 14). Defendant reviewed Plaintiff's complete loan modification application and denied it on August 18, 2015. (Id. ¶ 14; id. at 40-43). Plaintiff requested an appeal of the denial on August 26. (Id. ¶ 15; ECF No. 36-1 ¶ 12). Upon receipt of Plaintiff's appeal letter, Defendant concluded that Plaintiff did not have appeal rights because the Property was not owner-occupied. On August 12, 2014, Defendant had engaged a vendor to conduct an inspection of the Property as part of its routine administration of mortgage loans in default. (ECF No. 33-4 ¶ 12). The vendor reported that someone residing at the Property advised that it was occupied by someone other than Plaintiff or Mr. Darby, and Defendant recorded the Property as non-owner occupied. (Id.). Although Defendant determined in August 2015 that Plaintiff did not have a right to an appeal, it conducted an independent review of the application and concluded that the denial was correctly decided. (ECF No. 33-4 ¶ 15). There is no evidence that Plaintiff received notice of the appeal determination. (ECF No. 36-1 ¶ 13).

         Because Plaintiff failed to make any of the loan payments required by the stay, the stay was vacated on August 14, 2015. Plaintiff filed an appeal of the decisions related to her Rule 14-211 motion to the Maryland Court of Special Appeals on October 20, which remains pending. A foreclosure sale was set for November 20, but Plaintiff filed a Chapter 13 bankruptcy petition on November 19 to prevent the sale. (ECF No. 33-3, at 15). After Defendant obtained lift-stay relief from the bankruptcy court, Plaintiff requested a stay of the foreclosure sale pending the appeal to the Court of Special Appeals, which the Circuit Court granted on June 2, 2016.

         B. Procedural Background

         Plaintiff commenced this action in the Circuit Court for Montgomery County on December 14, 2015. Defendant removed the case to this court on January 21, 2016. (ECF No. 1). Plaintiff advances three counts against Defendant for: violation of 12 C.F.R. § 1024.41, a regulation under the Real Estate Settlements Procedures Act (“RESPA”) concerning loss mitigation procedures, because Defendant allegedly did not properly consider her loan modification applications or her appeal (Count I); violation of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5481, 5564 (Count II); and deceptive trade practices in violation of the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law § 13-301 et seq. (Count III). (ECF No. 2 ¶¶ 69-99). Plaintiff's complaint seeks injunctive relief, monetary damages, and attorney's fees.

         Discovery closed on July 27, 2016. (ECF No. 24). Defendant filed a motion for summary judgment on August 26, 2016. (ECF No. 33). Plaintiff responded in opposition ...


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