Mbakpuo v. Wells Fargo Bank, N.A.
MEMORANDUM OPINION. Signed by Judge Roger W Titus on 7/20/2015. (kns, Deputy Clerk)(c/m 7/21/15)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
C. VICTOR MBAKPUO
WELLS FARGO BANK, N.A.
Civil Case No. RWT-13-2213
Like many Americans, Plaintiff C. Victor Mbakpuo experienced financial difficulties
while the country was in the throes of the Great Recession, which resulted in his defaulting on
his mortgage loan. Also like many Americans, Mbakpuo lays the blame for his financial woes at
the feet of his mortgage lender, Defendant Wells Fargo Bank, N.A., and sues it for $39 million in
damages, as well as equitable relief in the form of reformation of his mortgage contract. While
mortgage lenders may bear some, most, or all of the blame for many of the mortgages gone bad
during the recent economic crisis, that is not the case here. In order to survive summary
judgment, Mbakpuo needed to produce some evidence that would allow a reasonable jury to
conclude that Defendant Wells Fargo violated his legal rights. Mbakpuo has produced pages of
vitriolic rhetoric directed at the mortgage lending industry in general, and Wells Fargo in
particular, but has produced no evidence that Wells Fargo violated any of his legal rights.
Accordingly, Wells Fargo’s motion for summary judgment will be granted, Mbakpuo’s will be
denied, and judgment will be entered in favor of Wells Fargo.1
On December 13, 1999, Plaintiff C. Victor Mbakpuo executed an adjustable rate note
secured by a deed of trust (the note and deed of trust, collectively, the “Mortgage”) to purchase a
home in Bowie, Maryland, from World Savings Bank, F.S.B. (“World Savings”). ECF No. 2-1.
The Mortgage provided that, beginning on January 31, 2000, and every other Monday thereafter,
World Savings would adjust the interest rate of the Mortgage. Id. at 1. The adjustment was tied
to the Golden West Index, a proprietary index which reflected the weighted average of the
interest rates in effect on the last day of each month on the deposit accounts of the depositary
subsidiaries of Golden West Financial Corporation, the holding company of World Savings. Id.
at 2. The interest rate on the loan at each adjustment was determined by taking the Golden West
Index rate and adding a 3.4 percentage point margin. Id. The maximum interest rate World
Savings could charge Mbakpuo was 11.95%. Id. The Mortgage provided that, if the Golden
West Index became unavailable, World Savings could choose another national, regional, or other
index approved by World Savings’ regulator as a substitute index. Id. The Mortgage required
World Savings to give notice to Mbakpuo in the event of a substitution. Id.
In connection with Wachovia’s acquisition of Golden West, the Golden West Index
ceased to exist in 2007, and Wachovia’s own proprietary index, the Wachovia COSI, was
Mbakpuo argues that summary judgment cannot be granted where there are cross-motions for summary judgment.
ECF No. 45-1 at 43. In support of this extraordinary argument, Mbakpuo cites Sparks State Bank v. Martin,
568 A.2d 1140 (Ct. Spec. App. Md. 1990). To the extent this state court case could govern a procedural question in
federal court, it does not stand for such a broad proposition. Martin does not state a categorical rule that where there
are cross-motions for summary judgment, a court may not grant any motion for summary judgment, because such a
rule would be absurd. Rather, Martin simply stands for the common sense proposition that if cross-motions for
summary judgment reveal a genuine dispute of material fact, each should be denied. Id. at 1142-44.
substituted as the index used to determine Mbakpuo’s rate. ECF No. 39-3 at 4.
Defendant Wells Fargo acquired Wachovia, and when the Wachovia COSI ceased to exist, the
Wells Fargo COSI was substituted. Id. at 5-6. Wells Fargo submits evidence that it sent notice
of each of these substitutions to Mbakpuo. ECF No. 39-3 at 48; ECF No. 39-3 at 55-56.
Mbakpuo claims never to have received the notices. ECF No. 2 at 4.
Due to a series of misfortunes and financial difficulties, Mbakpuo defaulted on the
Mortgage on February 19, 2008. ECF No. 2-1 at 8. Mbakpuo applied for multiple loan
modifications from 2008-2013. He was initially offered a loan modification, but rejected its
terms. ECF No. 39-4 at 30. Thereafter, he continued to apply for modifications under the
federal Home Affordable Modification Program (“HAMP”),2 but Wells Fargo determined that he
was ineligible each time. Without rehashing the details of the back and forth between Mbakpuo
and Wells Fargo over these applications, Wells Fargo at each turn explained in depth the
reasoning for its determination that Mbakpuo was not eligible for a HAMP modification, and at
each turn Mbakpuo disagreed vehemently with Wells Fargo’s explanations. ECF No. 2-1 at
8-80. Based on the correspondence between Mbakpuo and Wells Fargo, it is apparent that he
never believed any of the representations made by Wells Fargo regarding his eligibility for a
The Mortgage required that Mbakpuo purchase and maintain hazard insurance on the
home. ECF No. 39-3 at 31-32. It also gave Wells Fargo the right to take any steps necessary to
protect its interest in the home. Id. at 32. In 2013, Mbakpuo realized that insurance had been
placed on the property by Wells Fargo pursuant to this provision.
ECF No. 2 at 18-19.
Mbakpuo made this realization several years after Wells Fargo had sent him multiple letters
requesting that he provide proof of insurance and warning that if he did not, insurance would be
HAMP was established pursuant to the Emergency Economic Stabilization Act, P.L. 110-343, 122 Stat. 3765.
purchased on his behalf. ECF No. 52-2 at 24. Upon making this discovery, Mbakpuo purchased
his own insurance at a lower rate, at which time Wells Fargo cancelled the policy it had
purchased. Id. at 105.
On the basis of these facts, Mbakpuo has asserted 11 counts against Wells Fargo. Counts
I, II, III and IV are fraud claims; in Counts I and II, Mbakpuo claims that Wells Fargo
fraudulently calculated his interest rate, and in Counts III and IV, Mbakpuo claims that Wells
Fargo fraudulently denied his request for a HAMP modification by misrepresenting his income
and expenses. ECF No. 2 at 4-13. Count V is a breach of contract claim, alleging that Wells
Fargo failed to provide Mbakpuo with notice of the index used to calculate his interest rate. Id.
at 13-15. Count VI alleges various statutory violations due to Wells Fargo’s alleged failure to
respond adequately to written requests regarding the servicing of his mortgage. Id. at 15-16.
Counts VII and VIII allege negligent hiring, training, and retention on Wells Fargo’s part based
on a myriad of failures by its employees to deal with Mbakpuo’s demands. Id. at 16-18.
Count IX alleges “Forced Insurance/Dodd-Frank” and challenges Wells Fargo’s placement of
insurance on Mbakpuo’s home. Id. at 18-19. Count X alleges “Negative Amortization/Dodd
Frank,” and claims that Wells Fargo “added the delinquencies and recapitalized at the balance at
$344,742.16” in violation of the Dodd-Frank Act’s proscription on negative amortization. Id. at
19-21. Count XI seeks reformation of the mortgage. Id. at 21.
Mbakpuo filed the Complaint pro se in the Circuit Court for Prince George’s County,
Maryland.3 ECF No. 1. Wells Fargo timely removed the case to this Court on July 30, 2013. Id.
Following discovery, the parties filed cross-motions for summary judgment.4 ECF Nos. 39 and
41. Oppositions and replies have been filed, and the motions are now ripe for decision.
STANDARD OF REVIEW
Summary judgment is appropriate if “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); see Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). “A material fact is one ‘that might affect the outcome
of the suit under the governing law.’” Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183
(4th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Disputes of
material fact are genuine if, based on the evidence, “a reasonable jury could return a verdict for
the nonmoving party.” Anderson, 477 U.S. at 248.
In order to avoid summary judgment, the nonmoving party “may not rest upon the mere
allegations or denials of his pleading, but must set forth specific facts showing that there is a
genuine issue for trial.” Id. at 256. While the court must view the evidence in the light most
favorable to the nonmoving party, Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299, 302
(4th Cir. 2006), it must also “prevent factually unsupported claims and defenses from proceeding
to trial,” Drewitt v. Pratt, 999 F.2d 774, 778–79 (4th Cir. 1993) (quoting Felty v.
Although proceeding pro se, Mbakpuo did graduate from law school and obtain a law license, although it does not
appear that he is currently licensed to practice law in any court. See Office of Disciplinary Counsel v. Mbakpuo,
781 N.E.2d 208 (Ohio 2002) (disbarring Mbakpuo from practice of law in Ohio); In re Mbakpuo, 829 A.2d 217
(D.C. 2003) (denying admission to D.C. Bar based on Mbakpuo’s Ohio disbarment); In re Mbakpuo,
Case No. 1:94-mc-00051 (D. Md. 1994), ECF No. 5 (disbarring Mbakpuo in this District).
At the request of Wells Fargo, the Court extended the deadline for filing dispositive motions to await the resolution
of a case presenting similar issues in the U.S. District Court for the Western District of Washington. ECF Nos. 27,
Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir. 1987)) (internal quotation marks
Wells Fargo is Entitled to Summary Judgment on Mbakpuo’s Fraud Claims
Counts I, II, III, and IV of Mbakpuo’s Complaint contain allegations of fraud against
Wells Fargo. Specifically, Mbakpuo claims in Counts I and II that Wells Fargo committed
common law fraud by miscalculating Mbakpuo’s interest rate, in Count III that Wells Fargo
committed common law fraud by refusing to grant him a HAMP loan modification, and in
Count IV that Wells Fargo committed fraudulent misrepresentation under the Maryland
Consumer Protection Act5 (the “MCPA”) by refusing to grant him a HAMP loan modification.
In Maryland, to prevail on a common law fraud claim, a plaintiff must establish:
(1) that the defendant made a false representation to the plaintiff; (2) that its falsity was
either known to the defendant or that the representation was made with reckless
indifference as to its truth; (3) that the misrepresentation was made for the purpose of
defrauding the plaintiff; (4) that the plaintiff relied on the misrepresentation and had the
right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the
Nails v. S & R, 639 A.2d 660, 668-69 (Md. 1994). Similar to a common law fraud claim, to
prevail on a fraudulent misrepresentation claim under the MCPA, a plaintiff must establish (1) an
unfair or deceptive practice or misrepresentation that (2) is relied upon, and (3) causes an
identifiable loss as a result of his or her reliance on the purported misrepresentations. Bank of
Am., N.A. v. Jill P. Mitchell Living Trust, 822 F. Supp. 2d 505, 531-32 (D. Md. 2011). Mbakpuo
Md. Code Ann. Com. Law §§ 13-101 et seq.
has failed to establish any facts that would allow a reasonable jury to conclude that Wells Fargo
committed any fraud as alleged.6
A. Wells Fargo did not Commit Fraud with Respect to Mbakpuo’s Interest Rate
Mbakpuo claims, in Counts I and II, that Wells Fargo committed fraud with respect to the
calculation of his interest rate. He alleges that Wells Fargo did not use any index for a period of
time, did not use an index approved by its regulator, “calculated the mortgage with a base
interest rate significantly higher than that on the national or regional index, even above 2%,”
improperly used 8.13% as an interest rate without a downward adjustment when interest rates in
general went down, and failed to notify him when it changed indices. ECF No. 2 at 4-8. At best,
there is no evidentiary basis to support these allegations. At worst, the allegations are confused
nonsense on their face.
At all times there was an index in place approved by regulators
Mbakpuo alleges that at times Wells Fargo was calculating his interest rate using an index
not approved by regulators. ECF No. 2 at 4-5. Although difficult to understand, this allegation
appears to have two elements. First, that there were times when Wells Fargo was not using any
index at all. ECF No. 45-1 at 18. Second, that Wells Fargo had failed to gain its regulator’s
approval for its substitute indices.7 ECF No. 2 at 7.
Mbakpuo spends much of his argument on the fraud claims attempting to establish that they are alleged with
sufficient particularity to satisfy Federal Rule of Civil Procedure 9(b). This may well be true, and Wells Fargo has
not contested as much. Unfortunately for Mbakpuo, this is a wasted argument. This case is at the summary
judgment stage, not the motion to dismiss stage. He must do more than show that he has drafted an adequate
complaint, he must show that there are facts in the record sufficient to allow a reasonable jury to rule in his favor.
See Anderson, 477 U.S. at 256 (stating that a nonmoving party “may not rest upon the mere allegations or denials of
his pleading, but must set forth specific facts showing that there is a genuine issue for trial.”).
Mbakpuo also appears to allege that it was somehow fraudulent for Wells Fargo not to provide him with proof that
its regulators had approved an alternate index. ECF No. 2 at 7 (“Defendant Wells Fargo never produced any proof
of approval by its primary regulator, as required by the loan contract.”). Mbakpuo does not point to any provision in
the Mortgage that would require Wells Fargo to provide proof of regulatory approval of an index, beyond the simple
notice that an alternate index was being substituted. Nor does he explain how failure to provide such proof could
have constituted fraud.
Wells Fargo produced evidence that regulators had approved its substitute indices.
ECF No. 40 at 52, 107. Mbakpuo has not produced any evidence to the contrary. Mbakpuo has
also not produced any evidence that there was a “gap” in the use of an index to calculate his
interest rate, beyond his own idle, confused speculation. Summary judgment cannot be defeated
by speculation alone.8
Wells Fargo properly calculated Mbakpuo’s interest rate
Mbakpuo alleges that Wells Fargo improperly and fraudulently calculated his interest
rate. Again, these allegations are confused and difficult to follow, but the crux of them appears
to be that Wells Fargo used an interest rate that was higher than any other prevailing interest rate.
ECF No. 41 at 7-12.
These allegations only demonstrate Mbakpuo’s own confusion about how adjustable rate
mortgages work in general, and how his worked in particular.
Mbakpuo’s adjustable rate
mortgage, of course, did not entitle him to any particular interest rate. Nor did it entitle him to
have any particular index used to calculate his interest rate, at least once the Golden West Index
ceased to exist. Finally, it certainly did not entitle him to pay only the same interest that was
being paid on deposit accounts, as Mbakpuo seems to imply. ECF No. 41 at 8 (arguing that
Wells Fargo improperly charged an interest rate above 2%).
As relates to the interest rate Wells Fargo charged Mbakpuo, Mbakpuo was only entitled
(i) to have his rate calculated by reference to the Golden West Index up until the point that index
was no longer available, at which point Wells Fargo had the option to substitute any national,
For its part, Wells Fargo conclusively explains the “gap” in indices purportedly identified by Mbakpuo.
ECF No. 51 at 5-7. Mbakpuo’s argument that there is a gap is based on his own confusion regarding the difference
between the public announcement of a merger, the consummation of a merger, and the conversion of the subsidiary
assets of a merger. Each of the Golden West Index, Wachovia COSI, and Wells Fargo COSI, were calculated based
on prevailing interest rates on the parent company’s subsidiary deposit accounts. After consummation of a
particular merger, the preceding index did not cease to exist until the subsidiary deposit accounts were converted to
accounts of the new parent company, notwithstanding that the merger had been publicly announced and
consummated. ECF No. 39-3 at 4-5; ECF No. 51 at 5-7.
regional, or regulator-approved index of its choice, (ii) to have the margin added to the index rate
to determine his interest rate be no more than 3.4%, and (iii) to be charged no more than an
interest rate of 11.95%. ECF No. 2-1 at 1-2.
There is no evidence that Wells Fargo violated any of these provisions.
Mbakpuo’s complaints about the interest rate he was charged are sound and fury signifying
nothing. Mbakpuo complains that the index that governed his loan produced a higher interest
rate than alternate indices that could have been used. ECF No. 2 at 7 (“the interest margin on the
adjustable rate mortgage index during 2007 through 2013 was below 2%, sometimes below .4%,
but Defendant Wells Fargo used a higher margin than what obtained on the national or regional
index to calculate Plaintiff’s monthly and/or yearly mortgage.”). This may be so, but it is not
fraud. Rather, given the absence of evidence that any of the index rates were calculated in a
fraudulent manner, it is exactly what Mbakpuo bargained for.
Mbakpuo also claims that his interest rate remained at 8.13%, even as interest rates fell.
ECF No. 41 at 9 (“As the foregoing items of evidence show, 8.13% was used in calculating the
alleged delinquent interest and was applied to defraud, and did defraud, Plaintiff”). This is
plainly contradicted from evidence in the record that Mbakpuo himself submits.9 ECF No. 41-11
(showing that interest rate used to calculate interest due fell from 8.13% in February 2008 to
4.9% in August 2013).
Wells Fargo provided adequate notice of the change in indices
Finally, with respect to Wells Fargo’s actions regarding Mbakpuo’s interest rate, there is
no evidence in the record that Wells Fargo ever failed to provide notice to Mbakpuo when it
Mbakpuo’s argument here, like many of his other arguments, is at best confused, and at worst, a deliberate attempt
to mislead the Court. For example, on the same page in which Mbakpuo claims Wells Fargo had been improperly
using an 8.13% interest rate throughout the period of his default, ECF No. 41 at 9, he also argues that Wells Fargo
improperly used a 5.54% interest rate during a portion of this time period. Id.
changed indices. The Mortgage required Wells Fargo to give notice to Mbakpuo if it used a
substitute index. ECF No. 2-1 at 2. The Mortgage provided that notice to Mbakpuo was effected
by delivering it via first class mail to Mbakpuo at his home address. ECF No. 2-1 at 4. Wells
Fargo has presented evidence, in the form of business records as well as one of Mbakpuo’s
statements, that it did mail notice to Mbakpuo of the index substitutions. ECF No. 39-3 at 4, 48,
In the face of this evidence, Mbakpuo submits a sworn affidavit in which he asserts that
“I did not receive any notice in 2006, 2007, 2008, 2009, 2010, or at anytime whatsoever advising
[sic] me that Wells Fargo Bank, N.A., or its predecessors advising me of a change to an
alternative index.” ECF No. 45-4. This may be so, and arguably creates a genuine dispute of
fact as to whether Mbakpuo did, indeed, receive the notice that was mailed to him.
Unfortunately for Mbakpuo, this dispute of fact is immaterial. As noted above, the Mortgage
required only that Wells Fargo mail Mbakpuo the notice. It did not obligate Wells Fargo to
ensure that Mbakpuo actually received the notice. Whether Mbakpuo actually received the
notice is a matter between him and his postal carrier, not between him and Wells Fargo.
Moreover, even if it were the case that Wells Fargo had failed to notify Mbakpuo of its
substitution of indices, Mbakpuo does not connect the dots between that and the elements of
fraud. For example, he fails to present any evidence that the failure to provide notice was a
“false representation” or that it was done to intentionally defraud him. Also, Mbakpuo does not
show how a failure to notify caused him compensable damage. Without a doubt, the Mortgage
gave Wells Fargo the right to use a substitute index of its choice in these circumstances. It did
not give Mbakpuo the right to choose from multiple indices, so he could have sustained no
damage simply by failing to receive notice of a substitute index. And although Wells Fargo
voluntarily gave Mbakpuo a choice between two of its proprietary indices, Mbakpuo does not
submit any evidence that he would have been better off choosing the other index.10
Because Mbakpuo has failed to produce evidence sufficient to allow a reasonable jury to
determine that Wells Fargo committed fraud in any way with respect to his interest rate, Wells
Fargo is entitled to summary judgment on Counts I and II.
B. Wells Fargo Did Not Commit Fraud With Respect to Mbakpuo’s Requests for
Mbakpuo claims, in Counts III and IV, that Wells Fargo fraudulently denied his frequent
requests for a HAMP loan modification. The factual predicate for these claims is that various
financial figures Wells Fargo used to determine Mbakpuo’s eligibility for the HAMP program
were inaccurate, and that this inaccuracy was intentional so as to ensure that he would not
qualify. ECF No. 2 at 7-13.
As evidence that Wells Fargo fraudulently determined Mbakpuo was ineligible for the
HAMP program, he has provided only the correspondence from Wells Fargo to him, in which
Wells Fargo explains its determination that he is ineligible for a HAMP modification, and his
bombastic responses in which he insists that he is eligible and accuses Wells Fargo of fraud. E.g.
ECF No. 41-17 (Wells Fargo determination of ineligibility for HAMP), ECF No. 41-18
(Mbakpuo’s response). Mbakpuo apparently believes that simply producing this correspondence,
which includes his claims that the figures used are false, is enough to defeat summary judgment
or, bafflingly, to entitle him to summary judgment. ECF No. 48 at 9 (“Wells Fargo’s letter of
February 21, 2013, admitted that it used $11,016.55 instead of $4,211.25 as Plaintiff’s gross
Wells Fargo gave borrowers the choice of opting into an alternate index, which Mbakpuo references when he
argues that that “notice of the substitution was critical because of the ‘permanent reduction of their margin’” if he
chose the alternate index offered by Wells Fargo.” ECF No. 45-1 at 19. What Mbakpuo ignores is that it was
because he did not opt into that alternate index, Wells Fargo reduced his margin permanently from 3.4% to 3.34%.
ECF No. 39-3 at 50.
income…If Wells Fargo’s letter admitting its fraud does not constitute a competent evidence,
what else would?”).
If Mbakpuo is trying to prove that Wells Fargo used certain figures in determining his
eligibility for HAMP, he has succeeded. After reviewing the record, the Court has no doubt what
figures Wells Fargo used to determine Mbakpuo’s eligibility for a HAMP modification, or how it
arrived at its conclusions. If, however, Mbakpuo is trying to prove that those figures were
fraudulent, he has utterly failed to do so. Not only has Mbakpuo submitted no evidence showing
that Wells Fargo’s figures were a misrepresentation or constituted an unfair or deceptive practice,
he has not even submitted any evidence that the figures were inaccurate. Where Mbakpuo
claims Wells Fargo misrepresents his gross income, he provides no paystub, tax return, or other
evidence to show what his correct gross income was.11 Where Mbakpuo claims Wells Fargo
overstated the mortgage payment on one of his properties, he provides no statement showing
what the actual mortgage payment was. The only evidence in the record that Wells Fargo’s
figures were wrong is Mbakpuo’s conclusory correspondence claiming they were wrong, which
is no more than a “scintilla of evidence” and cannot defeat summary judgment.
Mbakpuo’s claims regarding Wells Fargo’s representation of his income are hopelessly confused. For example,
he complains that Wells Fargo used his monthly gross income of $11,016.55 instead of his monthly net income to
determine his eligibility for a modification. ECF No. 2 at 9. At the same time, he complains about the opposite: that
Wells Fargo used his monthly net income to determine his eligibility, improperly included his mortgage payment in
determining his monthly net income and determined his monthly net income (Mbakpuo erroneously uses the term
“gross income” to describe the result when he subtracts expenses from his actual gross income) “to be $2,132.98 by
deducting the gross monthly household expenses of $9,320.14…on the loan modification form from the total or
gross monthly income of $11,661.25 ($11,661.25-9,320.14 = 2,132.98).” Id. at 10. First, the $2,132.98 figure does
not represent Mbakpuo’s net income, because 11,661.25 minus 9,320.14 equals 2,341.11, not 2,132.98. $2,132.98
represents a different monthly gross income figure for Mbakpuo. Apparently Mbakpuo is self-employed, and
provided profit and loss statements covering two separate periods to Wells Fargo, which Wells Fargo used to derive
monthly gross income figures. ECF No. 43-5 at 3-7. Second, HAMP required a lender to use monthly gross
income, not monthly net income, to determine eligibility. See Home Affordable Modification Program
Supplemental Directive 09-01 at 11 (April 6, 2009) (“The borrower’s total monthly debt ratio…is the ratio of the
borrower’s monthly gross expenses divided by the borrower’s monthly gross income) (emphasis added). Therefore,
any claim that Wells Fargo improperly used monthly gross income fails as a matter of law.
Even if a scintilla of evidence could defeat summary judgment on its own, it fails to do so
here because Wells Fargo conclusively demonstrates that its figures were, in fact, reasonably
accurate. For example, Mbakpuo claims that Wells Fargo overstated his mortgage payment on
several rental properties. ECF No. 41 at 15-16. What Mbakpuo fails to recognize is that the
mortgage payment figures included the entire monthly expenses paid into those properties.
Mbakpuo argues that a property in Adelphi, MD, had only a $131 monthly mortgage payment,
instead of a $582.17 payment as Wells Fargo claimed.
Id. at 16.
However, a document
submitted by Mbakpuo to Wells Fargo in connection with his HAMP modification application
shows monthly expenses for that property of: (1) $183.33 in principal and interest payments12;
(2) $53.38 in taxes; and (3) $346 in condo fees. ECF No. 43-3. Those figures result in a total
monthly payment of $582.71, only $0.54 more than what Mbakpuo claims was an incorrect
figure,13 but $451.71 more than what Mbakpuo claims is the “correct” figure. In other words, it
is Mbakpuo’s figures that are wildly inaccurate, rather than the allegedly fraudulent figures Wells
While Mbakpuo’s correspondence disputing Wells Fargo’s figures does not create a
dispute of material fact as to whether Wells Fargo used accurate figures in determining
Mbakpuo’s HAMP eligibility, that correspondence does show beyond dispute that Mbakpuo did
not rely on any statement by Wells Fargo regarding his ineligibility for a modification. Mbakpuo
did not believe anything Wells Fargo said, and disputed its conclusions at every turn. Mbakpuo
cannot have relied on that which he did not believe, and thus cannot have been defrauded. See
Sav. Banks Ret. Sys. v. Clarke, 265 A.2d 921, 925 (Md. 1970) (affirming dismissal of fraud claim
Incidentally, this is more than the $171 Mbakpuo claims is his mortgage payment on that property.
There does not appear to be any evidence that Wells Fargo actually ever used $582.17, instead of $582.71.
where purchasers did not believe representations of sellers, but instead hired lawyers to
investigate those representations).
Finally, Mbakpuo has failed to show damages. At most, any inaccuracy in Wells Fargo’s
figures affected his eligibility for a HAMP modification. However, Mbakpuo has not submitted
any evidence that would show that, even if his figures had been used, he would have qualified
for a modification under the HAMP program.
Mbakpuo has not presented any evidence that Wells Fargo used inaccurate figures, much
less intentionally misleading or deceptive figures, in calculating his eligibility for a HAMP
modification. He has produced conclusive evidence that he did not rely on Wells Fargo’s
statements regarding his HAMP applications. And he has not shown any damages from Wells
Fargo’s allegedly wrongful conduct. Mbakpuo has not produced evidence of fraud, and therefore
Wells Fargo is entitled to summary judgment on Counts III and IV.14
Wells Fargo is Entitled to Summary Judgment on Mbakpuo’s Breach of
Mbakpuo’s breach of contract claim is based on his allegation that Wells Fargo failed to
send him notice of a substitute index, did not use an appropriate index, and did not send notice of
regulator approval of any substitute index. ECF No. 2 at 13-15. For reasons already explained
Mbakpuo relies heavily on Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) for the proposition that
he can sustain his state law claims due to Wells Fargo’s denial of a HAMP modification. ECF No. 41 at 12-17.
Wigod provides no support to Mbakpuo. In Wigod, the plaintiff alleged that the lender promised her a HAMP
modification if she met certain criteria during a trial modification period, and then failed to deliver on that promise
despite the fact that she had met the relevant criteria. Wigod, 673 F.3d at 557-59. The lender moved to dismiss the
complaint, arguing that there was no private cause of action for violations of the HAMP program. Id. at 559. The
Seventh Circuit held that the plaintiff’s state law claims for breach of contract, promissory estoppel, and fraud
survived dismissal because, although HAMP contains no private cause of action, the plaintiff had stated those claims
under state law based on the lender’s promises or misrepresentations connected to its HAMP modification offer, and
that those state law claims were not preempted by federal law. Id. at 559. Wigod is easily distinguishable, because
Wells Fargo never offered or promised to offer Mbakpuo a HAMP modification. Moreover, Mbakpuo’s claim fails
not because he lacks a private cause of action under HAMP, but rather because he lacks any evidence showing that
Wells Fargo defrauded him or breached any contract.
in Sections I.A.i. and I.A.iii., supra, there is no evidence that any of Mbakpuo’s allegations are
true, and Wells Fargo is entitled to summary judgment on Count V.
Wells Fargo is Entitled to Summary Judgment on Mbakpuo’s RESPA/DoddFrank Act Claim
Mbakpuo claims in Count VI that Wells Fargo violated the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617, and § 1482 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (the “Dodd-Frank Act”), Pub. L. 11-203, 124 Stat. 1376.
As to RESPA, Mbakpuo claims that Wells Fargo failed to respond to his correspondence
regarding the denial of his modification requests, each of which he asserts was a qualified written
request (“QWR”) as defined by RESPA, within the time frame required by RESPA. The problem
with Mbakpuo’s argument is that none of the correspondence he points to was a QWR.
RESPA requires a servicer, upon receipt of a QWR from a borrower “for information
relating to the servicing of such loan,” to acknowledge receipt of the QWR within 5 business
days, and to respond within 30 days. 12 U.S.C. § 2605(e)(1)-(2). RESPA defines a QWR as
written correspondence that enables the servicer to identify the account of the borrower, and that
includes the reasons the borrower believes “that the account is in error or provides sufficient
detail to the servicer regarding other information sought by the borrower.” Id. § 2605(e)(1)(B).
The statute further defines “servicing” as “receiving any scheduled periodic payments from a
borrower pursuant to the terms of any loan, including amounts for escrow accounts…and making
the payments of principal and interest and such other payments with respect to the amounts
received from the borrower as may be required pursuant to the terms of the loan.”
Mbakpuo’s RESPA claim fails because none of his letters concerned the servicing of the
Mortgage. Each was simply a contention that Wells Fargo improperly denied his request for a
HAMP modification. E.g. ECF No. 2-1 at 65 (“I hereby dispute the decision on my loan
modification application, for the following reasons.”). This does not relate to the servicing of a
loan, as defined by RESPA.15 It is clear from the statute that the types of servicing inquiries it is
directed at are those arising in the ordinary course of a borrower making, and a servicer applying,
regularly scheduled mortgage payments. See 12 U.S.C. 2605(i)(3) (“‘servicing’ means receiving
any scheduled periodic payments from a borrower pursuant to the terms of any loan”). Further,
this provision of RESPA is primarily aimed at ensuring the prompt resolution of errors regarding
payments and mortgage accounts, and ensuring that borrowers have access to sufficient
information regarding their mortgage accounts.16 Id. § 2605(e)(1)(B)(ii) (defining QWR as
written correspondence that “includes a statement of the reasons for the belief of the
borrower…that the account is in error or provides sufficient detail to the servicer regarding other
information sought by the borrower”), § 2605(e)(2)(A)-(C) (requiring servicer to either “make
appropriate corrections in the account of the borrower” or “provide the borrower with a written
explanation…that includes…a statement of the reasons for which the servicer believes the
account of the borrower is correct” or provides “the information requested by the borrower or an
explanation of why the information requested is unavailable”).
Mbakpuo’s requests for a loan modification did not relate to the servicing of a loan
because they did not relate to Wells Fargo “receiving any scheduled periodic payments from a
Mbakpuo argues that it is a “voodoo theory” to frame the inquiry with reference to the definition of “servicing”
instead of the definition of a QWR. ECF No. 48 at 15. This argument defies common sense. 12 U.S.C. § 2605 is
titled “Servicing of mortgage loans and administration of escrow accounts.” Even more obviously, RESPA only
requires servicers to respond to written requests “for information relating to the servicing of such a loan.” 12 U.S.C.
§ 2605(e)(1)(A). The meaning of this provision, by its plain language, is that written correspondence must relate to
servicing as defined by RESPA if it is to be considered a QWR, and thus implicate the requirements of RESPA.
See Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666 (9th Cir. 2012) (statutory requirement that QWR relate to
servicing “ensures that the statutory duty to respond does not arise with respect to all inquiries or complaints from
borrowers to servicers.”) (emphasis in original).
Mbakpuo argues that in a letter dated July 20, 2012, he challenged the principal amount Wells Fargo determined
was due. ECF No. 45-1 at 34; see also ECF No. 2-1 at 69. However, to the extent this transforms the letter into a
QWR regarding servicing, Wells Fargo responded to that specific contention by a letter dated July 24, 2012, well
within the RESPA-imposed deadline. Id. at 70-71.
borrower pursuant to the terms of a loan.” Id. § 2605(i)(3). By definition, a loan modification is
a request to alter the terms of a loan; a request for modification is a request to no longer make
payments pursuant to the existing terms of a loan. Mbakpuo has cited no authority for the
proposition that a request for a loan modification, or the approval or denial thereof, relates to the
servicing of a loan, and in the face of the plain language of RESPA, the Court will not so hold
As to Mbakpuo’s allegation that Wells Fargo violated § 1482 of the Dodd-Frank Act by
failing to provide him with the information required by that provision when denying his
application for a HAMP modification, there is no private cause of action for a violation of
HAMP. See Bowers v. Bank of America, N.A., 905 F. Supp. 2d 697, 701-02 (D. Md. 2012).
Accordingly, even if Wells Fargo did fail to provide the information required by the Dodd-Frank
Act in denying his HAMP application, Mbakpuo has no remedy. Accordingly, Wells Fargo is
entitled to summary judgment on Count VI.
Wells Fargo is Entitled to Summary Judgment on Mbakpuo’s “Forced
Mbakpuo claims in Count IX that Wells Fargo improperly placed hazard insurance on his
property. ECF No. 2 at 18-19. There is no dispute that Mbakpuo was required by contract to
maintain hazard insurance on his property, and there is no dispute that Wells Fargo had the right
to protect its interest in the property. ECF No. 39-3 at 31-32. Mbakpuo’s argument that Wells
Fargo’s conduct was unlawful is based on his contention that he did have insurance on his home,
and that Wells Fargo purchased insurance that was more expensive than what he eventually
obtained. ECF No. 45-1 at 38 (“Count IX says that Wells Fargo for no reason went and replaced
the existing policy with a very costly one that had a monthly premium of $374.61.”). As to
Mbakpuo’s contention that he had hazard insurance, Mbakpuo produces no evidence that he
actually had a current insurance policy when Wells Fargo obtained it on his behalf. Mbakpuo
also does not point to any provision in the contract, or any provision of law, that required Wells
Fargo to obtain insurance at the best possible rate if Mbakpuo breached his obligation to
Mbakpuo cites § 1463 of the Dodd-Frank Act, codified at 12 U.S.C. § 2605, as standing
for the proposition that Wells Fargo was prohibited “from force-placing this insurance on the
Plaintiff.” ECF No. 45-1 at 40. This is a blatant misrepresentation of the law. The Dodd-Frank
Act does not prohibit a lender from force-placing insurance. Rather, it requires a lender to have a
“reasonable basis to believe the borrower has failed to comply with the loan contract’s
requirement to maintain property insurance,” and to send adequate notice to the borrower before
force-placing insurance. 12 U.S.C. § 2605(k)-(l). Wells Fargo has attached documentation
showing that it communicated extensively with Mbakpuo regarding the insurance being
purchased on his behalf. ECF No. 52-2. In any event, Wells Fargo placed that insurance before
the Dodd-Frank Act was enacted. Id. at 24. Wells Fargo is entitled to summary judgment on
Wells Fargo Did Not Create a “Negative Amortization” on Mbakpuo’s Loan
Mbakpuo claims in Count X that Wells Fargo improperly “recapitalized” his loan by
adding the delinquent interest, late fees, and other charges accrued as a result of Mbakpuo’s
default, back to his principal, causing a “negative amortization” in violation of the Dodd-Frank
Act. ECF No. 2 at 19-21. This confused claim is without merit.
Mbakpuo does not appear to understand what negative amortization actually is.
Negative amortization occurs when a borrower makes a regularly scheduled minimum payment
on a loan and the principal balance of the loan increases. See 12 C.F.R. § 1026.32(d)(2)
(defining negative amortization as a “payment schedule with regular periodic payments that
cause the principal balance to increase”). Mbakpuo’s principal balance did not increase because
he made only the regularly scheduled minimum payment. Rather, the amount he owed increased
because he stopped making any payments at all. That is not negative amortization. If it were,
every loan could potentially be a negatively amortizing loan simply because, if the borrower
stopped making payments, accrued unpaid interest and other charges would increase the total
There is no evidence that Mbakpuo has actually experienced a negative
amortization on his mortgage.
Fairly read, Mbakpuo’s “negative amortization” claim has
nothing to do with negative amortization, but is simply an argument that Wells Fargo should not
have allowed his loan to continue to accrue interest and other charges when he defaulted.
However, Mbakpuo cites no legal authority to this effect.
To the extent Mbakpuo is attempting to argue that any disclosure of the possibility of a
negative amortization was inadequate under the provisions of the Dodd-Frank Act, this argument
fails as well. The Dodd-Frank Act does not apply retroactively to the mortgage Mbakpuo
entered into in 1999.
McCauley v. Home Loan Inv. Bank, F.S.B., 710 F.3d 551, 554n.2
(4th Cir. 2013). Wells Fargo is entitled to summary judgment on Count X.
Mbakpuo is not Entitled to Reformation
In Count XI Mbakpuo seeks the equitable remedy of reformation of the Mortgage.
ECF No. 2 at 21. The grounds asserted in the Complaint for reformation are that “the interest
rate index upon which the loan was underwritten no longer exists” and that the loan violates the
Dodd-Frank Act. ECF No. 2 at 21. In his briefs, Mbakpuo provides additional grounds for
reformation, including various hardships he suffered subsequent to signing the Mortgage, that
“the toxic loan product Wells Fargo sold to Plaintiff and other borrowers caused the subprime
mortgage to implode, causing the worst housing crises [sic] in the history of America,” that the
loan is causing negative amortization, that Wells Fargo committed fraud, and that Mbakpuo did
not have time to read the Truth in Lending Act disclosures. ECF No. 41 at 25; ECF No. 45-1
As a factual matter, many of the grounds Mbakpuo cites as supporting reformation have
already been addressed in this Opinion and there is no evidence of them actually existing.17 As a
legal matter, none of these grounds (with the exception of fraud, which has already been
addressed) can support a claim for reformation. Reformation is an equitable remedy that serves a
narrow purpose and applies only in two cases: where a mutual mistake by the parties results in a
written agreement that differs from their intent, or where through fraud or duress a written
agreement differs from the intent of the innocent party.
See, e.g., Jaguar Land Rover
N. Am., LLC v. Manhattan Imp. Cars, Inc., 738 F. Supp. 2d 640, 650 (D. Md. 2010).
Reformation is limited to those circumstances where it is necessary to capture the actual intent of
a party whose intent, through no fault of their own, is not properly captured by the written
Reformation is not available simply to relieve a party of unforeseen hardships
encountered subsequent to the formation of a contract. Id. at 651 (“Reformation is not a vehicle
for rewriting contracts to reflect changed circumstances since the time of contract formation.”).
Nor is it available simply because a party neglected to read the contract he signed. Cf. Julian v.
Buonassissi, 997 A.2d 104, 119n.15 (Md. 2010) (“Our jurisprudence is clear that when a
competent person signs a contract…in the absence of fraud, misrepresentation, mistake, undue
influence, or fiduciary relations, the contract will be enforced.”). Finally, it is not available
simply because a party decides, after signing the contract, that it should be characterized as a
See supra Section V (Negative Amortization), Section I (Fraud).
“toxic” contract. Simply put, to be entitled to reformation, Mbakpuo must put forth some
evidence that there was a mutual mistake, fraud, or duress. He has put forth nothing. Wells
Fargo is entitled to summary judgment on Count XI.
Wells Fargo is not Liable for Negligent Hiring, Training, and Supervision
Mbakpuo claims, in Counts VII and VIII, that Wells Fargo committed the torts of
negligent hiring, training, and supervision. ECF No. 2 at 18. The bases for this claim are that
Wells Fargo employees used incorrect figures in determining his eligibility for a loan
modification, and did not respond adequately to his QWR’s. ECF No. 2 at 17-18. Even
assuming Wells Fargo owed Mbakpuo a duty giving rise to tort liability, which it did not,18 Wells
Fargo did not breach any such duty. The Court has already explained elsewhere in this Opinion
why none of the conduct Mbakpuo complains of in these counts was illegal or otherwise
wrongful, and need not repeat itself. See supra, Section I.B. (no evidence Wells Fargo used
incorrect figures in determining modification eligibility), Section III (Mbakpuo did not submit
any QWR implicating RESPA). Wells Fargo is entitled to summary judgment on Counts VII and
“It is pellucid that, in Maryland, the relationship of a bank to its customer in a loan transaction is ordinarily a
contractual relationship between a debtor and creditor.” Yousef v. Trustbank Sav., F.S.B., 568 A.2d 1134, 1138
(Ct. Spec. App. Md. 1990). Mbakpuo has presented no legal authority or factual evidence that would cause any
other rule to apply.
For the foregoing reasons, Wells Fargo is entitled to summary judgment on all of
Mbakpuo’s claims.19 Judgment will be entered in favor of Wells Fargo. A separate order
Date: July 20, 2015
ROGER W. TITUS
UNITED STATES DISTRICT JUDGE
Mbakpuo also submitted a Motion for Settlement Conference. ECF No. 33. Because all of Mbakpuo’s claims are
being disposed of, this motion will be denied.
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