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Kemp v. Seterus, Inc.

United States District Court, D. Maryland

June 27, 2018

DONNA KEMP, on behalf of herself and on behalf of three classes of similarly situated persons, Plaintiffs,
SETERUS, INC., et al., Defendants.



         Putative Class Plaintiff Donna Kemp has sued the servicer of her home mortgage loan, Seterus, Inc., and the owner of the loan, Federal National Mortgage Association (Fannie Mae), alleging violations of various Maryland state lender laws as well as the federal Truth in Lending Act (TILA), 15 U.S.C. § 1601, et seq. Defendants have jointly filed a Motion to Dismiss the Second Amended Complaint. ECF No. 24. For the reasons that follow, Defendants' Motion to Dismiss is GRANTED and the case is REMANDED to state court for all further proceedings.


         This action centers around Seterus' servicing of Kemp's mortgage loan and allegedly improper property inspection fees that it charged her following her default on the loan.

         A. Kemp's Mortgage Loan and Subsequent Default

         In April 2007, Kemp obtained a home mortgage loan from Countrywide Home Loans, Inc., secured by a deed of trust on real property located in Glen Burnie, Maryland (the Property). Hr'g Tr. at 4:3-7; ECF No. 24-4. Although the exact date has not been provided, at some point after the origination of the loan, it was assigned to Fannie Mae, the current owner. Hr'g Tr. at 5-6.

         In 2017, Kemp fell behind on her mortgage payments. ECF No. 17 ¶ 19. On April 10, 2017, Seterus, Kemp's loan servicer, declared the loan to be in default and stated that if Kemp did not “cure the default on or before May 15, 2017, it may result in acceleration of the sums secured by the mortgage and may result in the sale of the premises.” Id. ¶ 21. On July 14, 2017, Kemp purportedly wrote to Seterus requesting information about the status of the loan, notifying it that she had not been receiving her monthly periodic statements. Id. ¶ 22.

         Seterus responded to Kemp's request for information on July 24, 2017. In its correspondence, Seterus disclosed to Kemp, apparently for the first time, that it had charged her loan account with certain property inspection fees from August 26, 2016, through July 24, 2017. Id. ¶ 24. Kemp again wrote Seterus on September 6, 2017, requesting information about the property inspection fees as well as an accounting as to the total due on the loan. Kemp alleges that Seterus received this second request on September 21, 2017. Id. ¶ 25.

         On September 25, 2017, in response to her request for a payoff total on her loan, Seterus informed Kemp that she owed $180.00 in property inspection fees that she was required to pay in connection with any loan payoff. The next day, Seterus responded to Kemp's second inquiry asking about the property inspection fees, stating:

[T]he authority to charge fees such as property inspection fees or legal fees is contained in the Deed of trust . . . . Enclosed is a copy of the Deed of Trust for your reference. Due to the continued contractual delinquency of the loan, Seterus exercised its right under the terms of the signed Deed of Trust to protect the loan owner's interest in the property. Property inspections are ordered when a loan is more than 45 days contractually delinquent, and every 30 days if the contractual delinquency continues. These were drive-by inspections to see if the property was occupied in good repair. The fee for this service was billed to Seterus by an outside contractor and then assessed to the loan. As of the date of this loan, Seterus has assessed the loan [twelve] property inspection fees [at $15.00 per inspection] totaling $180.00. These fees are considered valid.

Id. ¶ 26.

         Kemp alleges that the assessment of these property inspections fees on the loan violated Maryland law, specifically Md. Com. § 12-121(a)(1)(ii), which prohibits “lenders” from imposing such fees.

         B. Kemp's Trial Plan and Loan Modification

         In addition to the referenced correspondence regarding her loan, Kemp alleges that in a letter dated July 20, 2017, Seterus offered her a “Trial Period Plan” (TPP) in order to obtain a Fannie Mae loan modification. The plan required Kemp to make three trial payments to Seterus, on behalf of Fannie Mae, on or before September 1, October 1, and November 1, 2017. Kemp claims she accepted the TPP offer and made all the trial period payments. Id. ¶ 31-33.

         On November 8, 2017, Seterus, on behalf of Fannie Mae, offered Kemp a Final Loan Modification Agreement. Id. ¶ 33. The offer stated that “unpaid interest, real estate taxes, insurance premiums, and certain assessments” would be added to the mortgage balance Kemp owed. ECF No. 26-5 at 3. Kemp subsequently agreed to the proposed Final Loan Modification Agreement, which she claims capitalized the property inspection fees claimed due by Seterus. ECF No. 17 ¶ 36.

         Since the loan modification, Kemp states that she has continued to make her modified mortgage payments and that her loan remains in effect. Id. ΒΆ 37. At no time did Seterus ...

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