United States District Court, D. Maryland
K. Bredar Chief Judge.
Weisheit filed this case on her own behalf and on behalf of
similarly situated individuals against Rosenberg &
Associates, LLC ("Rosenberg"), and Bayview Loan
Servicing, LLC ("Bayview"). (Compl., ECF No. 1.)
After motions to dismiss were denied (ECF Nos. 29, 30), and a
scheduling order was entered (ECF No. 35), the Court granted
Weisheit's request for leave to file a second amended
complaint (ECF Nos. 57, 58), which is now the operative
complaint (hereinafter referred to as the
"complaint") (ECF No. 59).
has pled three causes of action alleging violation of the
Real Estate Settlement Procedures Act ("RESPA"), 12
U.S.C. § 2601 et seq., and the regulations
promulgated thereunder, and violation of the Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C.
§ 1692 etseq. She asserts in Count I that
Bayview improperly scheduled a foreclosure sale while her
loss mitigation application was pending, did not respond
within thirty days of her appeal of Bayview's denial of
her loan modification application, and did not state in the
denial the specific reasons for its decision. In Count II,
Weisheit alleges Rosenberg and Bayview violated the FDCPA by
scheduling and advertising the foreclosure sale when they
were prohibited from doing so, which also constituted a
materially unfair or deceptive practice under the FDCPA. In
Count III, Weisheit alleges Bayview failed to acknowledge
receipt of a Notice of Error within five days of receipt and
failed to correct the errors in the Notice of Error within
thirty days of receipt. Her complaint alleges Bayview wrongly
denied her a loan modification under the Home Affordable
Mortgage Program ("HAMP"). (2d Am. Compl. ¶
before the Court are Bayview's motion for summary
judgment (ECF No. 75), Bayview's motion to seal (ECF No.
76), and Weisheit's cross motion for partial summary
judgment (ECF No. 97). Briefing has been completed on the motions
(ECF Nos. 103, 105), and no hearing is required, Local Rule
105.6 (D. Md. 2018). Bayview's motion for summary
judgment will be granted. Its motion to seal will be granted
in part and denied in part. And Weisheit's cross motion
for summary judgment will be denied.
Standard for Summary Judgment
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986) (citing predecessor to current Rule
56(a)). The burden is on the moving party to demonstrate the
absence of any genuine dispute of material fact. Adickes
v. S.R Kress & Co., 398 U.S. 144, 157 (1970). If
sufficient evidence exists for a reasonable jury to render a
verdict in favor of the party opposing the motion, then a
genuine dispute of material fact is presented and summary
judgment should be denied. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). However, the "mere
existence of a scintilla of evidence in support of the
[opposing party's] position" is insufficient to
defeat a motion for summary judgment. Id. at 252.
The facts themselves, and the inferences to be drawn from the
underlying facts, must be viewed in the light most favorable
to the opposing party, Scott v. Harris, 550 U.S.
372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230
(4th Cir. 2008), who may not rest upon the mere allegations
or denials of his pleading but instead must, by affidavit or
other evidentiary showing, set out specific facts showing a
genuine dispute for trial, Fed.R.Civ.P. 56(c)(1). Supporting
and opposing affidavits are to be made on personal knowledge,
contain such facts as would be admissible in evidence, and
show affirmatively the competence of the affiant to testify
to the matters stated in the affidavit. Fed.R.Civ.P.
56(c)(4). A cross-motion for summary judgment is viewed
separately on its own merits. Rossignol v. Voorhaar,
316 F.3d 516, 523 (4th Cir. 2003). "When considering
each individual motion, the court must take care to
'resolve all factual disputes and any competing, rational
inferences in the light most favorable' to the party
opposing that motion." Id. (citation omitted).
Home Affordable Modification Program
to the 2008 economic crisis, Congress enacted the Emergency
Economic Stabilization Act for various purposes, including
the preservation of home ownership. 12 U.S.C. § 5201. In
carrying out the Act's purposes, the Secretary of the
Treasury was directed to use the authority of that office
"to encourage the servicers of the underlying mortgages,
considering net present value to the taxpayer, to take
advantage of the HOPE for Homeowners Program under section
1715z-23 of [Title 12] or other available programs to
minimize foreclosures." 12 U.S.C. § 5219(a)(1).
Secretary was also directed to
revise the supplemental directives and other guidelines for
the Home Affordable Modification Program of the Making Home
Affordable initiative of the Secretary of the Treasury ... to
require each mortgage servicer participating in such program
to provide each borrower under a mortgage whose request for a
mortgage modification under the Program is denied with all
borrower-related and mortgage-related input data used in any
net present value (NPV) analyses performed in connection with
the subject mortgage. Such input data shall be provided to
the borrower at the time of such denial.
12 U.S.C. § 5219a(a). Further, in carrying out the Home
Affordable Modification Program ("HAMP"), the
Secretary was to
establish and maintain a site on the World Wide Web that
provides a calculator for net present value analyses of a
mortgage, based on the Secretary's methodology for
calculating such value, that mortgagors can use to enter
information regarding their own mortgages and that provides a
determination after entering such information regarding a
mortgage of whether such mortgage would be accepted or
rejected for modification under the Program, using such
12 U.S.C. § 5219a(b)(1).
was created as part of the Troubled Assets Relief Program but
was not itself codified into law. Cleveland v. Aurora
Loan Servs., LLC, No. C 11-0773 PJH, 2011 WL 2020565, at
*3 (N.D. Cal. May 24, 2011). Under HAMP, mortgage loan
servicers entered into Servicer Participation Agreements
("SPAs") with the Federal National Mortgage
Association ("Fannie Mae") serving as the financial
agent for the United States government; a servicer's
obligations were set forth in the SPA as well as in Treasury
Department Program Guidelines. Id.
HAMP, there was no standard approach among loan servicers or
investors about how to help homeowners who wanted to keep
making payments, but needed mortgage assistance. By setting
standards for what constitutes a sustainable modification
across the mortgage industry, HAMP has helped to make private
loan modifications more affordable for homeowners." U.S.
Dep't of the Treasury, Making Home Affordable: Home
Affordable Modification Program (HAMP),
Pages/hamp.aspx (last visited June 18, 2019) ("Making
Home Affordable Announcement").
HAMP's original form, a borrower could be eligible for a
HAMP modification if various requirements were met, including
that the proposed modification was for a mortgage loan that
originated before January 1, 2009, and secured the
borrower's primary residence, the mortgage loan had not
previously received a HAMP modification, and the mortgage
payments amounted to more than 31% of the borrower's
gross monthly income. Markle v. HSBC Mortg. Corp.
(USA), 844 F.Supp.2d 172, 177 (D. Mass. 2011). A
"servicer conducts a Net Present Value test, which
assesses whether the expected cash flow from a modified loan
would exceed the cash flow from the unmodified loan."
Id. See also 15 U.S.C. § 1639a(a) (to extent
servicer owes investors or others duty to maximize net
present value, servicer deemed to satisfy duty by entering
into qualified loss mitigation plan based on determination,
inter alia, that modification would "likely
provide an anticipated recovery on the outstanding principal
mortgage debt that will exceed the anticipated recovery
through foreclosures"). Participating servicers were not
required to modify mortgage loans, but only to consider
modifications to them. Escobedo v. Countrywide Home
Loans, Inc., No. 09cv1557 BTM (BLM), 2009 WL 4981618, at
*3 (S.D. Cal. Dec. 15, 2009) (SPA "does not state that
Countrywide must modify all mortgages that meet the
2012, HAMP was expanded to increase the pool of eligible
borrowers. Making Home Affordable Announcement. That
expansion introduced Tier 2 to HAMP, with the original
methodology for determination of net present value
("NPV") becoming Tier 1. MHA Handbook for Servicers
of Non-GSE Mortgages, Ch. H: HAMP p. 66 n.3 (version 5.1 May
26, 2016) ("MHA Handbook"), Bayview Mot Summ. J.
Ex. E, ECF No. 75-7. According to the MHA Handbook, a
mortgage loan may be eligible for HAMP Tier 2 if it satisfied
the threshold HAMP criteria but not the Tier 1 criteria or
was considered for but did not receive a Tier 1 modification.
Id. pp. 66-67. In HAMP Tier 2, "the
borrower's post-modification monthly mortgage payment
ratio (also called a debt-to-income ratio or DTI ratio) must
be greater than or equal to ten percent and less than or
equal to 55 percent (Expanded Acceptable DTI Range)."
Id. p. 105.
servicer considering a HAMP modification was required to
follow a "waterfall" methodology. Id. p.
109. Before undertaking the Tier 1 waterfall, the servicer
was required to identify any investor restrictions such as
those related to rate reduction, term extension or
forbearance, or a cap on the percentage of loans in a
securitization that can be modified. Id.
For loans that satisfy the eligibility requirements . . .
[for HAMP, generally] and ... for HAMP Tier 1 . .., servicers
must apply the modification steps enumerated below in the
stated order of succession until the borrower's monthly
mortgage payment ratio is reduced to 31 percent .... If the
servicer cannot reduce the borrower's monthly mortgage
payment ratio to the target of 31 percent, the modification
will not satisfy HAMP Tier 1 requirements and the servicer
must evaluate the borrower for HAMP Tier 2.
Id. The four basic waterfall steps under both Tier 1
and Tier 2 are determination of capitalized unpaid principal
balance, interest rate adjustment, term extension, and
principal forbearance, but the respective Tier 1 and Tier 2
calculations are not based on identical values. Id.
has provided evidence that a servicer receiving a complete
loss mitigation application would use the online Treasury
Department HAMP Portal to determine whether modification
should occur by submitting "the raw data-such as
borrower's monthly gross income, borrower's total
monthly obligations, escrow advances, taxes, and
insurance" to the Portal. (Flick Aff. ¶¶ 18,
19, Bayview's Mot. Summ. J. ECF No. 75-2.) In turn, the
Portal "successively reduced the interest rate, extended
the loan term, determined a principal forbearance, and
forgave principal in a two-tier evaluation for a HAMP loan
modification." (Id. ¶ 19.) Finally,
"[a]fter fully applying the HAMP loan modification
waterfall and considering any identified investor
restrictions, the Treasury Portal sent the loan servicer a
single HAMP eligibility determination and NPV chart
values." (¶ 22.)
April 26, 2007, Weisheit executed a promissory note to repay
$417, 000 in principal plus interest for the purpose of
financing her thirty-year mortgage loan on her home in
Darlington, Maryland. (Promissory Note, Bayview's Mot.
Summ. J. Ex. J, ECF No. 75-12.) A security
instrument-referenced as "a Mortgage, Deed of Trust, or
Security Deed"-was incorporated into the promissory
note. (Id. ¶ 10.) The monthly payment was in
the amount of $2, 601.54, and Weisheit's first payment
was due June 1, 2007. (Id. ¶ 3.) The last
payment received from Weisheit was on October 1, 2009.
(Foreclosure Notice, Bayview's Mot. Summ. J. Ex. K, ECF
December 27, 2012, Bay view sent Weisheit a letter inviting
her to apply for a loan modification and supplying her with
information and forms needed to submit an application.
(Letter, Dec. 27, 2012, Bayview's Mot. Summ. J. Ex. L,
ECF No. 75-14.) Similar letters were sent to Weisheit on
April 2, 2013; September 5, 2013; May 12, 2014; August 6,
2014; May 12, 2015; July 22, 2015; and August 6, 2015.
(Id.) Nothing in the record indicates Weisheit
responded to these letters.
September 14, 2015, Bayview sent Weisheit a letter formally
notifying her she was in default and that Bayview, on behalf
of the Note Holder, intended to initiate foreclosure action
on the mortgaged property. (Foreclosure Notice.) The letter
stated the foreclosure would be conducted in the name of
"THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK,
AS TRUSTEE (CWALT 2007-18CB)." (Id.) The letter
indicated all payments from November 1, 2009, forward were in
default; the total monthly payments overdue were $216, 900.02
and additional charges of $4, 162, 56 for late fees and
$511.00 for a "corporate advance balance" were
assessed, bringing the unpaid total Weisheit owed on that
date to $221, 573.58. (Id.) The principal balance
remaining on the loan was $404, 925.11. (Id.)
Weisheit was given fourteen days to cure the default; after
that time, Bayview told her "the lender intends to
exercise its rights to accelerate the mortgage debt and
instruct its attorneys to start legal action to foreclose
upon your mortgaged property." (Id.)
September 28, 2015, attorney Gerard Uehlinger wrote Bayview,
indicating Weisheit had retained him to represent her
regarding the loan and requesting "[a] copy of the
[promissory] note, [a] copy of the security instrument with
assignments establishing the right to foreclose, [a] copy of
the payment history since the loan was last less than 60 days
past due, and [t]he name of the investor that holds the
loan." (Letter, Sept. 28, 2015, Bayview's Mot. Summ.
J. Ex. M, ECF No. 75-15.) The letter was received by Bayview
on October 5, 2015. (Id.)
October 8, 2015, Bayview wrote Uehlinger to say it
expected to resolve his inquiry by November 3, 2015. (Letter,
Oct. 8, 2015, Bayview's Mot. Summ. J. Ex. N, ECF No.
75-16.) On October 16, 2015, Bayview wrote Uehlinger,
providing the information that the name of the investor
holding the loan is "THE BANK OF NEW YORK MELLON
TRUSTEE" and the address of the investor was "101
BARCLAY STREET 8W, NEW YORK, NY 10286." (Id.)
The letter indicated it included enclosures of "a copy
of the payment history, copy of Note, and copy of Deed of
Trust pertaining to the account per your request."
December 21, 2015, Bayview wrote Weisheit in care of
Uehlinger at his office address and titled the letter as
"NOTICE OF DEFAULT AND INTENT TO ACCELERATE."
(Letter, Dec. 21, 2015, Bayview's Mot. Summ. J. Ex. O,
ECF No. 75-17.) By that time, the total amount to cure the
default had risen to $231, 221.48. (Id.) The letter
stated it was a formal demand to pay the sum owed and further
stated, "If the default, together with additional
payments that subsequently become due, is not cured by
01/25/2016, BLS [Bayview Loan Servicing] will take steps to
terminate your ownership in the property by a foreclosure
proceeding or other action to seize the property."
(Id.) Then, the letter said,
IF YOU ARE UNABLE TO BRING YOUR ACCOUNT CURRENT, BLS offers
consumer assistance programs designed to help resolve
delinquencies and avoid FORECLOSURE. These services are
provided without cost to our customers. You may be eligible
for a loan workout plan or other similar alternative. If you
would like to learn more about these programs, you may
contact the Loss Mitigation Department at 1-877-205-9958,
9:00 a.m. - 6:00 p.m., Monday - Friday, Eastern Standard
Time. WE ARE VERY INTERESTED IN ASSISTING YOU.
If you are experiencing financial difficulty, you should know
that there are several options available to you that may help
you keep your home. You may contact a government approved
housing counseling agency which provides free or low-cost
housing counseling. You should consider contacting one of
these agencies immediately. These agencies specialize in
helping homeowners who are facing financial difficulty.
Housing counselors can help you assess your financial
condition and work with us to explore the possibility of
modifying your loan, establishing an easier payment plan for
you, or even working out a period of loan forbearance. For
your benefit and assistance, there are government approved
homeownership counseling agencies designed to help homeowners
avoid losing their homes. To obtain a list of approved
counseling agencies, please call 1-800-569-4287 or visit
You may be eligible for assistance from the Homeownership
Preservation Foundation or other foreclosure counseling
agency. You may call the following toll-free number to
request assistance from the Homeownership Preservation
Foundation: l-888-995-HOPE(4673). If you wish, you may also
contact us directly at 1-800-771-0299 and ask to discuss
possible options. This matter is very important.
Please give it your immediate ...