United States District Court, D. Maryland
JAMES A. ORAZI and KIMBERLY RIDER-ORAZI
BAC HOME LOANS SERVICING, LP, RUSHMORE LOAN MANAGEMENT SERVICES, LLC, and U.S. BANK NA as LEGAL TITLE TRUSTEE FOR TRUMAN 2013 SC3 TITLE TRUST
Richard D. Bennett United States District Judge.
James A. Orazi ("Orazi") and Kimberly Rider-Orazi
("Rider-Orazi") bring this lawsuit against
defendants Bank of America, N.A. ("BANA"),
Rushmore Loan Management Services, LLC
("Rushmore"), and U.S. Bank NA as Legal Title
Trustee for Truman 2013 SC3 Title Trust ("US Bank")
for alleged breach of contract in connection with a loan
modification. Now pending is defendants' joint motion for
summary judgment (ECF No. 101). The motion is fully briefed,
and no oral argument is necessary. See Local Rule 105.6. For
the reasons below, defendants' motion is GRANTED and
Judgment is ENTERED in favor of all three Defendants against
dispute concerns a mortgage loan obtained by plaintiff Orazi
from defendant BANA to finance the purchase of real property
located at 2503 Garsden Court, Phoenix, Maryland 21131 (the
"Property"). ECF No. 101-3. Spouses Orazi and
Rider-Orazi purchased the Property on June 29, 2007 for $1,
160, 000. ECF No. 101-2. The original principle of the loan
from BANA was $812, 000 (the "BANA Loan"), secured
by an Adjustable Rate Note (the "Note") executed by
Orazi and the Deed of Trust to the Property (the "Deed
of Trust") executed by Orazi and, as a co-signer,
Rider-Orazi. ECF Nos. 101-3, 101-4. In 2010, plaintiffs began
having trouble making their loan payments, so they sought a
loan modification from BANA. This attempt was ultimately
unsuccessful and is now the subject of this suit. Defendants
U.S. Bank and Rushmore are the current owner and servicer,
respectively, of the Loan. ECF Nos. 101-18; 101-21.
Deed of Trust requires Orazi to "pay when due the
principal of, and interest on, the debt evidenced by the Note
and any prepayment charges and late charges under the
Note." ECF No. 101-4, ¶ 1. As a co-signer,
Rider-Orazi is not "personally obligated to pay the
sums" secured by the Deed of Trust. Id. at
¶ 13. Under the terms of the Deed of Trust, Orazi's
payments pursuant to the Note would "be applied to each
Periodic Payment in the order which it became due,"
meaning that any payment would be applied to the earliest
month in arrears. Id. at 101-4, ¶ 2.
June 2007 to December 2010, Orazi made full monthly mortgage
payments to BANA. ECF No 116-2, Orazi Tr. 83:7-8. In December
2010, Orazi lost his job and fell behind on the payments,
breaching the terms of the Note and Deed of Trust.
Id; ECF No. 101-5, Orazi Tr. 193:14-194:2. After
falling behind on payments, Orazi and Rider-Orazi
persistently pursued a loan modification from BANA. As part
of these efforts, Orazi obtained a loan of $49, 597 (the
"State Loan") through the Emergency Loan Assistance
Program of the Maryland Department of Housing and Community
Development ("DHCD") to use to bring the BANA Loan
current. ECF No. 116-3. The State Loan had 0% interest, and
its balance would be forgiven after five years if Orazi
maintained his residence and remained current on his BANA
Loan. ECF No. 101-11, ¶¶ 3-4; ECF No. 116-2, Orazi
Tr. 89:4-19. DHCD paid the balance of the State Loan directly
to BANA, satisfying all amounts due under the BANA Loan. ECF
No. 101-10, p. 16.
the State Loan was used to satisfy the arrearage of the BANA
Loan, BANA continued to work with Orazi to determine if he
was eligible for a loan modification. BANA informed Orazi
multiple times throughout the process that Orazi was required
to remain current on the BANA loan to be eligible for a loan
modification. For example, on December 27, 2011, Sonia
Velazquez ("Velazquez"), a Mortgage Servicing
Specialist at BANA, emailed Orazi notifying him that he would
need to bring the loan current to receive a loan
modification. ECF No. 101-13, p. 7-8. On December 28, 2011,
Velazquez emailed Orazi stating, "Please keep calling
customer service...so they can appl[y] all of your payments
to your mortgage, you have to show current to finish the
modification process." Id. at p. 6.
April 6, 2012, BANA sent Orazi a letter conditionally
approving the BANA Loan for a loan modification (the
"LMA"). ECF No. 101-15. The BANA Loan was current
as of the date of this letter due to the payments from the
State Loan. ECF No. 101-12, Deloney Tr. 30:1-5. The LMA was
subject to two conditions: (1) the enclosed documents had to
be signed, notarized, and returned to BANA by April 20, 2012,
and (2) Orazi had to make his normal monthly payment for
April 1, 2012 in the amount of $5, 667.51. ECF No. 101-15, p.
2. The Orazis timely signed, notarized, and returned the
required documents and submitted one mortgage payment in
April 2012. ECF No. 101-12, Deloney Tr. 34:6-23.
the Orazis made their April 2012 payment, however, the BANA
Loan was no longer current, and the April 2012 payment was
applied to the last installment that was due. ECF No. 101-12,
Deloney Tr. 46:1-22. The BANA Loan was no longer current
because DHCD realized it had overpaid the State Loan and
requested a refund from BANA. Id. at 36:9-17. BANA
returned the requested funds, causing Orazi's account to
fall into arrears for January, February, and March 2012.
Id. Because the Deed of Trust, which remained in
effect despite the LMA, requires BANA to apply any payment by
Orazi "to each Periodic Payment in the order in which it
became due," BANA applied the April payment made by the
Orazis to January 2012, the earliest month that was in
arrears. ECF No. 101-4, ¶ 2. Accordingly, the condition
of the LMA requiring Orazi to make the April 2012 payment was
never satisfied. ECF No. 101-12, Deloney Tr. 34:13-23.
8, 2012, Velazquez informed Orazi that BANA would still honor
the LMA if Orazi brought the BANA Loan current by making the
February, March, and April 2012 mortgage payments. ECF No.
101-16, p. 3. Orazi was unable to make these payments.
Id. at p. 2. Accordingly, the BANA Loan remained
delinquent, and the LMA never became effective. On March 5,
2013, BANA offered Orazi another loan modification which
would not require Orazi to bring the BANA loan current. ECF
No. 101-17, p. 2-4. Orazi rejected this offer because the
interest rate for the new modification would be higher than
the interest rate under the LMA. ECF No. 116-2, Orazi Tr.
2013, BANA sold the Loan to defendant U.S. Bank, and
servicing of the loan was transferred to defendant Rushmore.
ECF Nos. 101-18, 101-21. BANA notified Orazi of the sale and
transfer on December 26, 2013. ECF No. 101-21. On August 5,
2014, the Orazis provided a copy of the LMA to Rushmore, and
Rushmore informed the Orazis that it would submit the LMA to
U.S. Bank for approval. ECF No. 101-22. Rushmore also asked
if the Orazis could make the past due LMA payments (from May
1, 2012 to October 1, 2014), but counsel for the Orazis told
Rushmore he did not know whether the Orazis could make the
payments. ECF No. 101-23.
the filing of this litigation, the Orazis made deposits into
a segregated account in the amount called for by the LMA. ECF
No. 116-2, Orazi Tr. 49:11-52:5. The Orazis, however, have
never offered or attempted to make any past due LMA payments
to Rushmore or U.S. Bank. ECF No. 101-5, Orazi Tr. 62:7-18.
In fact, Orazi has not made a mortgage payment since April
2012, the payment that was applied to the arrears due for
January 2012. Id. at 192:6-8. Despite not having
made payments in six years, no foreclosure has been filed,
and the Orazis have remained in the Property. Id. at
249:5-7; ECF No. 101-24, Rider-Orazi Tr. 199:3-6.
Orazis filed suit against defendants in the Circuit Court for
Baltimore County on April 16, 2015, and on May 26, 2015,
defendants removed the case to this Court based on diversity
of citizenship. ECF No. 1 (citing 28 U.S.C. §§
1332, 1441, and 1446). The Orazis allege four counts against
defendants, all arising from defendants' alleged refusal
to honor the LMA: (I) specific performance, (II) declaratory
judgment, (III) breach of contract, and (IV) promissory
estoppel. ECF No. 2. On November 9, 2015, this Court denied
Rushmore's and U.S. Bank's motion to dismiss. ECF No.
25. This Court also denied the Orazis' motion ...