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McCrea v. Fargo

United States District Court, D. Maryland

June 17, 2019

NICOLE RENA MCCREA, Plaintiff,
v.
WELLS FARGO, et al., Defendants.

          MEMORANDUM OPINION

          RICHARD D. BENNETT UNITED STATES DISTRICT JUDGE

         This case arises from a foreclosure action resulting in the public sale of a home belonging to Plaintiff Nicole Rena McCrea (“Plaintiff” or “McCrea”). Plaintiff, proceeding pro se, asserts numerous state and federal claims against three groups of defendants: Wells Fargo Bank, N.A. (“Wells Fargo”);[1] Mark S. Devan, Thomas P. Dore, Brian S. McNair, and Angela Nasuta (collectively, the “Substitute Trustees”); and DSDJ Properties and Daniel Wilson (“Wilson”). Now pending are Wells Fargo's Motion to Dismiss the Complaint (ECF No. 8); DSDJ Properties and Daniel Wilson's Motion to Dismiss Pursuant to Rule 12(b)(6) for Failure to State a Claim (ECF No. 12); the Substitute Trustees' Motion to Dismiss (ECF No. 20); and a second Motion to Dismiss filed by the Substitute Trustees' (ECF No. 33).

         The parties' submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons stated herein, Wells Fargo's Motion to Dismiss the Complaint (ECF No. 8) is GRANTED; DSDJ Properties and Daniel Wilson's Motion to Dismiss Pursuant to Rule 12(b)(6) for Failure to State a Claim (ECF No. 12) is GRANTED; and the Substitute Trustees' Motions to Dismiss (ECF Nos. 20, 33) are GRANTED.

         BACKGROUND

         In ruling on a motion to dismiss, this Court “accept[s] as true all well-pleaded facts in a complaint and construe[s] them in the light most favorable to the plaintiff.” Wikimedia Found. V. Nat' Sec. Agency, 857 F.3d 193, 208 (4th Cir. 2017) (citing SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 422 (4th Cir. 2015)). As McCrea is proceeding pro se, this Court has “liberally construed” her Complaint and held it to “less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007); Alley v. Yadkin County Sheriff Dept., No. 17-1249, 698 Fed.Appx. 141, 2017 WL 4415771 (4th Cir. Oct. 5, 2017). This Court has also considered an Opinion of the Maryland Court of Special Appeals, McCrea v. Devan, et al., No. 1320, 2019 WL 1200732, at *2 n.2 (Md. Ct. Spec. App. March 13, 2019), and other matters of public record relevant to this action. See Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (taking judicial notice of matters of public record in considering motion to dismiss); Cohen v. INS Consultants, Inc., WDQ-14-0768, 2015 WL 847473, at *1 n.1 (D. Md. Feb. 25, 2015) (drawing facts of the case from Delaware state court opinions).

         I. McCrea Receives Assistance under the Home Affordable Modification Program (“HAMP”) and Defaults on Her Modified Loan.

         On June 27, 2003 McCrea purchased the property at 12472 Turtle Dove Place, Waldorf, Maryland. (Wells Fargo Ex. 1, [2] ECF No. 8-4.) On or about March 7, 2007 McCrea refinanced her mortgage loan with World Savings Bank, F.S.B. (“World Savings”)[3] and executed a promissory note in the amount of $219, 000 and a deed of trust pledging the property as collateral. (Wells Fargo Exs. 2, 3, ECF Nos. 8-5, 8-6.)

         In 2010, McCrea began to experience financial difficulties and obtained relief from Wells Fargo under the Home Affordable Modification Program (“HAMP”), a mortgage assistance program established by the Treasury Department under the Troubled Asset Relief Program (“TARP”). See Allen v. CitiMortgage, Inc., CCB-10-2740, 2011 WL 3425665, at *1 (D. Md. Aug. 4, 2011) (explaining the history of the program). The program expired on December 31, 2016. U.S. Dep't of the Treasury, Home Affordable Modification Program Supplemental Directive 18-01 (Dec. 18, 2018). Under HAMP, home loan servicers received financial incentives for modifying the mortgages of individuals in financial distress in accordance with uniform loan modification procedures. See Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 773-74 (4th Cir. 2013) (quoting Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556-57 (7th Cir. 2012)). As this Court has previously noted, HAMP modifications proceeded in two steps:

First, the mortgage servicer determines whether the borrower is eligible to participate in HAMP. If a mortgage servicer determines that the borrower is eligible for HAMP, the servicer may offer the borrower a three-month Trial Period Plan (“TPP”), during which the borrower pays reduced mortgage payments. If all of the conditions of the TPP Agreement are satisfied, the borrower may then proceed to step two of the process, at which point he or she is offered a permanent loan modification.

Letke v. Wells Fargo Home Mortg., Inc., RDB-12-3799, 2015 WL 1438196, at *5 (D. Md. March 27, 2015) (quoting Allen, 2011 WL 3425665, at *8). During the relevant period, HAMP included two evaluation Tiers, referred to as Tier 1 and Tier 2. Under Tier 1, a loan servicer followed a series of steps, called the “Tier 1 Standard Modification Waterfall” to reach a target monthly mortgage payment to income ratio of 31%. MHA Handbook v. 5.3, at 115. In general, borrowers who had previously obtained a HAMP Tier 1 modification were not eligible to receive additional Tier 1 modifications, but could obtain modifications under Tier 2. Id. at 71, 77. Applying another “standard modification waterfall, ” Tier 2 modifications were required to achieve a 10% or greater reduction in monthly mortgage payments; otherwise, the borrower was not eligible under Tier 2. Id. at 111.

         In this case, McCrea began making payments under a TPP to Wachovia Mortgage, a division of Wells Fargo, in August 2010. (Compl. ¶ 14.) In November 2010, she and Wachovia finalized a permanent Tier 1 loan modification. (Id. at ¶ 15.) In the following years, McCrea's financial condition worsened as her health deteriorated, causing her to default on her HAMP loan modification. On May 30, 2014 her employer placed her on sick leave without pay after she exhausted her paid sick leave. (Id. at ¶ 16.) She admits that she made her last full mortgage payment to Wells Fargo that month. (Id. at ¶ 17.) Accordingly, McCrea defaulted on the modified loan as of June 2, 2014.

         II. Wells Fargo Denies McCrea Additional HAMP Loan Modifications.

         McCrea's Complaint chronicles her unsuccessful attempts to obtain additional assistance under HAMP between May 2014 and 2017. She claims that in June 2014 her request for loan forbearance was denied, that Wells Fargo denied her “loss mitigation assistance through HAMP, ” and that Wells Fargo did not give her any options besides selling her home. (Id. at ¶ 18.) McCrea made similar requests throughout the relevant period, but complains that Wells Fargo denied her requests for HAMP-related assistance on the grounds that she had failed to provide adequate information. She alleges that between July 2015 and December 2015, Wells Fargo sent her “various unwarranted addendums asking [her] to articulate and/or clarify one or two random and trivial items in her modification application.” (Id. at ¶ 24.) McCrea alleges that she complained about Wells Fargo's methods on numerous occasions. (Id. at ¶ 26.)

         Foreclosure proceedings began in May 2016. On May 23, 2016, Wells Fargo sent a Notice of Intent to Foreclose to McCrea and appointed the Substitute Trustees. (Id. at ¶ 27.) On October 19, 2016[4] the Substitute Trustees initiated a foreclosure action in the Circuit Court for Charles County styled Devan, et al v. McCrea, case number 08-C-16-002735. (Id. at ¶ 28; Wells Fargo Ex. 5, ECF No. 8-8.) While foreclosure proceedings were pending, Wells Fargo continued to deny McCrea's requests for HAMP assistance. On December 27, 2016 Wells Fargo submitted a letter to McCrea informing that she was ineligible for a HAMP Tier 1 modification because she had already obtained such modification and that she was ineligible for a HAMP Tier 2 modification because the modified monthly payment would exceed 42% of her monthly income. (Id. at ¶¶ 33-34.) McCrea alleges that Wells Fargo's denial letter made unspecified fraudulent misrepresentations. (Id. at ¶ 34.) In early January 2017, McCrea filed an appeal with Wells Fargo challenging the determination that she was not eligible for another HAMP modification, arguing that the bank had engaged in fraud. (Id. at ¶¶ 35-36.) Wells Fargo rejected her appeal. (Id. at ¶ 36, 42, 43.)

         McCrea acknowledges that she rejected Wells Fargo's efforts to offer her additional assistance outside of HAMP. On January 17, 2017 Wells Fargo notified McCrea that she was eligible for a proprietary loan modification. (Id. at ¶ 37.) Reluctantly, McCrea agreed to a Trial Payment Plan as a prerequisite to obtaining the modification. (Id. at ¶¶ 39-40.) From February 2017 to June 2017 she made timely, monthly payments under the plan. (Id. at ¶ 48.) On April 17, 2017 Wells Fargo provided McCrea with instructions for finalizing the loan modification. (Id. at ¶ 49.) The instructions required her to sign a loan modification agreement by May 2, 2017, or else Wells Fargo would be “unable to complete the modification” and could resume collection communications and legal proceedings. (Id.) On the May 2, 2017 deadline, McCrea informed Wells Fargo that she would be seeking an “independent review” of the proposed Loan Modification Agreement. (Id. at ¶ 51.) Wells Fargo allegedly agreed to continue to accept the TPP payments during the independent review. (Id.) The next day, McCrea filed a complaint with the United States Department of Housing and Urban Development (“HUD”) and the Consumer Financial Protection Bureau (“CFPB”) accusing Wells Fargo of committing fraud by, inter alia, refusing her requests for a HAMP modification. (Id. at ¶ 52.)

         McCrea accuses Wells Fargo of retaliating against her for filing complaints with HUD and the CFPB. She alleges that, from May 3, 2017 to June 20, 2017, Wells Fargo representatives contacted her “at least three times a week and often twice a day” demanding her signature on the April 17, 2017 modification agreement. (Id. at ¶ 54.) In response to these calls, McCrea told Wells Fargo that their actions constituted harassment and accused the bank of attempting to stifle her efforts to obtain “federal review” of its actions. (Id.) On June 20, 2017, in response to McCrea's CFPB action, Wells Fargo once again explained that McCrea was not eligible for another HAMP Tier 1 modification because she had previously been approved for a Tier 1 modification in 2010, and that she was ineligible for a Tier 2 modification because it was unable to achieve a 10% reduction in her monthly mortgage payments. (Id. at ¶ 57.) On July 3, 2017, a Wells Fargo representative informed McCrea that the bank would no longer be accepting payments under the Trial Period Plan (“TPP”) because she had failed to sign the April 17, 2017 final Loan Modification Agreement. (Id. at ¶ 60.) In response, McCrea accused Wells Fargo of retaliating against her for filing a complaint with the CFPB and charged the bank with attempting to “nullify/make moot a U.S. agency's federal review of their final agreement.” (Id.)

         The foreclosure action resumed in the summer of 2017. In July 2017, the Substitute Trustees filed a bond with the Circuit Court for Charles County, Maryland and the foreclosure sale was scheduled for August 11, 2017. (Id. at ¶¶ 61-62.) On August 9, 2017, McCrea, proceeding pro se, filed an Emergency Motion to Stay and Dismiss Foreclosure Sale, raising substantially the same matters presented in this case. (Substitute Trustees Ex. 2, ECF No. 33-3.) On August 11, 2017, the Circuit Court denied her motion and McCrea's home was sold at auction. (Wells Fargo Ex. 1, at 5-6; Compl. at ¶ 70.) McCrea alleges that from August 2017 to September 2017, Defendants changed the locks to her home and “systematically removed” her personal belongings. (Id. at ¶ 71.)

         III. Subsequent ...


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