Okoye et al v. The Bank of New York Mellon fka Bank of New York as Trustees for Holders of GE-WMC Asset Backed Pass Through Certificates Series 2005-2 et al

Filing 29

Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered denying 25 Motion to Amend; granting 18 Motion to Dismiss as to WMC, granting in part and denying in part 10 Motion to Dismiss as to Litton. (Woodlock, Douglas)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
VICTOR OKOYE and OGOR W. OKOYE,
Plaintiffs,
v.
BANK OF NEW YORK MELLON f/k/a
BANK OF NEW YORK, as TRUSTEE FOR
HOLDERS OF GE-WMC ASSET-BACKED
PASS-THROUGH CERTIFICATES, SERIES
2005-2; WMC MORTGAGE CORPORATION;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.; and LITTON LOAN
SERVICING, LP,
Defendants.

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CIVIL ACTION NO.
10-11563-DPW

MEMORANDUM AND ORDER
July 28, 2011
Following the initiation of foreclosure proceedings on their
home, plaintiffs Victor and Ogor Okoye (the “Okoyes”) filed suit
against various financial institutions and loan servicers
alleging violations of Massachusetts’s consumer protection law,
Massachusetts General Laws ch. 93A, § 9, and the Massachusetts
Predatory Home Loan Practices Act, Massachusetts General Laws,
ch. 183C, § 4.

Defendant WMC Mortgage Corporation (“WMC”), the

originating lender of the Okoyes’ mortgage, and defendant Litton
Loan Servicing, LP (“Litton”), the current servicer of the
Okoyes’ mortgage, have filed motions to dismiss the Okoyes’
claims.

The Okoyes have since moved for leave to amend the

Complaint.

I will grant WMC’s motion, grant in part and deny in
1

part Litton’s motion, and deny the Okoyes’ motion to amend.
I. BACKGROUND
On October 4, 2005, the Okoyes refinanced a mortgage on
their home in Saugus, Massachusetts, in the amount of
$409,700.00.

(Compl. ¶ 9.)

WMC was the originating lender and

holder of the mortgage, and Mortgage Electronic Registration
System, Inc. (“MERS”), as WMC’s nominee, was the initial servicer
of the loan.

(Compl., Ex. 1 at 27.)

The mortgage included an adjustable rate rider and a balloon
rider that were executed by the Okoyes on October 4, 2005; the
riders were referenced by and incorporated into the mortgage
itself.1

(Compl., Ex. 1 at 28, Ex. 2; Defs.’ BNY, Litton, and

MERS Mot. to Dismiss [hereinafter Litton Mot.], Ex. C at 23–27
(DE 10-1).)

Victor Okoye alone signed the promissory note and,

on October 5, 2005, an addendum to the adjustable rate note.2
(Compl. ¶ 10; Litton Mot., Ex. B.)

The riders and the addendum

clearly state that the interest rate on the loan is variable and
that the full outstanding balance of the loan would be due at

1

The Okoyes assert that WMC unilaterally added the balloon
rider five months after the execution of the mortgage. (Compl.
¶¶ 24–25.) However, the mortgage documents show that the Okoyes
signed both the balloon rider and the adjustable rate rider on
October 4, 2005. (Compl., Ex. 2; Litton Mot., Ex. C at 23–27.)
2

Victor Okoye has since alleged in the proposed amended
complaint that he never signed the addendum. (Proposed Am.
Compl. ¶ 20.)
2

maturity.

(Litton Mot., Exs. B, C.)

recorded.

The mortgage was duly

(Litton Mot., Ex. D.)

On October 23, 2009, MERS, as WMC’s nominee, assigned the
mortgage to Bank of New York Mellon (“BNY”) as trustee for the
holders of the GE-WMC Asset-Backed, Pass-Through Certificates,
Series 2005-2.

(Compl. ¶ 29; Litton Mot., Ex. D.)

assignment was duly recorded.

The

(Litton Mot., Ex. D.)

At some

point prior to the assignment, Litton began servicing the loan.
(Compl. ¶ 6.)
Beginning in mid-2009, the Okoyes started missing some of
their loan payments.

(Compl. ¶ 26.)

Litton issued a Notice of

Default and Intent to Accelerate on June 21, 2009, at which time
Litton informed the Okoyes that they were $36,685.98 in arrears,
a number the Okoyes dispute.

(Compl. ¶¶ 27–28.)

The Okoyes’

attempts to contact Litton were initially unsuccessful, but, in
September and October 2009, Litton told them to continue payments
and to apply for loan modification.

(Compl. ¶ 32.)

In October

2009, Litton also informed the Okoyes that it had not received
their initial loan modification application, and the Okoyes
resubmitted.

(Compl. ¶ 34.)

At no point, and despite repeated

requests by the Okoyes and their counsel, did Litton provide a
breakdown of the arrearage.

(Compl. ¶¶ 34–38.)

On November 13,

2009, Litton denied Victor Okoye’s application for loan
modification on the ground that he was ineligible under the

3

federal Home Affordable Modification Program (“HAMP”).
35.)

(Compl. ¶

Litton denied the Okoyes alternative modification on

November 17, 2009.

(Compl. ¶ 36.)

Subsequent phone calls elicited inconsistent quotes of the
amount owed and also indicated that Litton had not credited all
of the Okoyes’ payments.

(Compl. ¶ 39.)

The Okoyes discovered

at this time that their monthly payment had increased from
$2,398.62 to $4,246.42 effective December 2008, but they had not
received formal notice of the rate or payment increases.
¶ 40.)

(Compl.

They only received a rate and payment increase

notification on October 9, 2009, which quoted the new payment as
$4,246.41 effective December 1, 2009.

(Compl. ¶ 40.)

Litton

admitted that this was the first rate increase since the
inception of the loan, despite the previously unknown rate
increase imposed as of December 2008.

(Compl. ¶¶ 41–42.)

The

Okoyes sent another written request for information on December
2, 2009, and Litton replied on December 31, 2009.

(Compl. ¶ 44.)

However, the “Reinstatement Quote” enclosure was not included in
the letter.

(Compl. ¶¶ 44–45.)

On January 8, 2010, BNY initiated foreclosure proceedings
against the Okoyes.

(Compl. ¶ 47.)

On February 1, 2010, the

Okoyes informed Litton that no attachment had been enclosed in
the response to the December request for information, and, on
February 16, 2010, sent another written request for loan

4

documents and for proof of BNY’s standing to initiate foreclosure
proceedings.

(Compl. ¶¶ 46, 49.)

According to the Okoyes, they

never received the documents requested, but were informed that
Litton had sent a HAMP trial period plan (“TPP”) packet, which if
signed, would modify the mortgage.

(Compl. ¶ 51.)

No packet

arrived, and the Okoyes finally acquired a fax of the plan around
February 25, 2010.

(Compl. ¶ 52.)

The packet required the

Okoyes to return the signed offer packet along with certain
supporting documentation and the first modified payment by March
1, 2010.

(Compl. ¶ 52.)

The Okoyes complied with the request,

Litton acknowledged receipt of all requested documents, and the
trial period began.

(Compl. ¶¶ 53–54.)

After the three-month trial period, Litton requested
additional documents, including some documents that had already
been provided.

(Compl. ¶¶ 55–57.)

The Okoyes provided the

documents and received assurances by telephone that all requested
documents had been received.

(Compl. ¶ 57.)

Nevertheless, in a

letter dated June 14, 2010, Litton denied loan modification under
HAMP for failure to provide the requested documents.
¶ 58.)

(Compl.

Following a further request for documents under the Real

Estate Settlement and Procedures Act of 1974 (“RESPA”), 12 U.S.C.
§ 2610 et seq., Litton provided documents that they had allegedly
sent in response to the Okoyes’ prior requests, but which the
Okoyes claim never to have received.

5

(Compl. ¶¶ 60–65.)

The

documents included apparent earlier responses to requests the
Okoyes never made and “seemed in parts to be a response made by
Litton to a request made by another borrower.”

(Compl. ¶ 65.)

On August 16, 2010, the Massachusetts Land Court denied the
Okoyes’ motion to dismiss BNY’s foreclosure action.
¶ 67.)

(Compl.

Three days later, on August 19, 2010, the Okoyes filed

this suit against WMC, BNY, MERS, and Litton in Essex Superior
Court.

The action was removed to this court on October 5, 2010.

In the sole count against WMC, which was also brought against the
other defendants, the Okoyes allege that WMC, BNY, MERS, and
Litton engaged in unfair and deceptive trade practices, Mass.
Gen. Laws ch. 93A, § 9 (“Chapter 93A”), and violated the
Predatory Home Loan Practices Act, Mass. Gen. Laws, ch. 183C
(“Chapter 183C”), § 4.

(Compl. ¶¶ 77–97.)

The Okoyes also

brought suit to quiet title against Litton and BNY.3

I granted

an earlier motion to dismiss all claims against BNY and MERS and
dismissed the quiet title claim against Litton.

I permitted

further briefing as to count two against Litton and will resolve
that outstanding portion of Litton’s motion to dismiss here.

I

did not consider the claims against WMC at that time because WMC
had not yet been served in this action.

WMC has since been

served and has filed a motion to dismiss the sole count against

3

The Okoyes also allege that BNY lacked standing to
institute foreclosure proceedings. (Compl. ¶¶ 69–76, 98–103.)
6

it.

On the eve of the hearing addressing these two pending

motions, the Okoyes sought leave to amend the Complaint.
I will first address the outstanding motions to dismiss and
then turn to the Okoyes’ motion for leave to amend the Complaint.
II.
A.

MOTIONS TO DISMISS

Standard of Review
In order to survive a motion to dismiss pursuant to Federal

Rule of Civil Procedure 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”

Ashcroft v. Iqbal, 129 S.

Ct. 1937, 1949 (2009) (citation and internal quotation marks
omitted).

In considering a motion to dismiss, I must accept all

factual allegations in the Complaint as true and draw all
reasonable inferences in favor of the Okoyes.

SEC v. Tambone,

597 F.3d 436, 441 (1st Cir. 2010) (en banc).
I am “generally limited to considering facts and documents
that are part of or incorporated into the complaint.”

Giragosian

v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008) (citation and internal
quotation marks omitted).

However, I “may also consider

documents incorporated by reference in the [complaint], matters
of public record, and other matters susceptible to judicial
notice.”

Id. (citation and internal quotation marks omitted)

(alteration in original).

7

B.

WMC’s Motion to Dismiss
The Okoyes allege two consumer-protection claims against

WMC.

First, the Okoyes claim that WMC violated Chapter 93A by

engaging in unfair and deceptive trade practices “with regards to
the servicing, origination and institution of foreclosure
proceedings” on their mortgage.

(Compl. ¶ 83.)

More

specifically, the Okoyes allege that WMC unilaterally changed the
terms of the mortgage five months after its execution and that
the loan application and mortgage documents contained “material
omission[s] and misleading representations” that caused the
Okoyes to “execute a predatory loan document[].”4
92–93.)

Second, the Okoyes claim that WMC violated Chapter 183C

by issuing a high-cost home loan.
1.

(Compl. ¶¶ 83,

(Compl. ¶¶ 80–81.)

Chapter 93A Claims

Chapter 93A requires any potential plaintiff alleging a
4

The Okoyes allege for the first time in their briefing in
opposition to WMC’s motion to dismiss that WMC failed to give
them the “closing documents, including the HUD statement until
November 4, 2010.” (Opp. at 3–4.) I should note that, in the
original Complaint now before me, it is unclear whether the
Okoyes allege that WMC failed to furnish copies of the mortgage
documents and/or note at the time of execution or failed only to
provide the HUD document describing closing fees ($9,133.97) and
“cash to borrowers” ($71,528.23). In their proposed amended
complaint, the Okoyes specifically allege that they received no
documentation at all. (Proposed Am. Compl. ¶ 11.) However, it
is apparent that the Okoyes had a copy of at least the mortgage
before November 4, 2010, because it was attached as an exhibit to
the Complaint. Additionally, the HUD document was attached to
the first motion to dismiss filed in October 2010 with a “Waiver
of Borrower(s) Right to Receive Hud-1 at Settlement” signed by
Victor Okoye on October 4, 2005. (Litton Mot., Ex. E.)
8

violation of § 9 of that chapter to have provided a written
demand for relief to the potential defendant no less than thirty
days before filing suit.

Mass. Gen. Laws ch. 93A, § 9(3).

This

demand requirement “is not merely a procedural nicety, but,
rather, ‘a prerequisite to suit’” and “must be alleged in the
plaintiff’s complaint.”

Rodi v. S. New Eng. Sch. of Law, 389

F.3d 5, 19 (1st Cir. 2004) (quoting Entrialgo v. Twin City Dodge,
Inc., 333 N.E.2d 202, 204 (Mass. 1975)).

Such a requirement does

not apply, however, “if the prospective respondent does not
maintain a place of business or does not keep assets within the
commonwealth.”

Mass. Gen. Laws ch. 93A, § 9(3).

A recorded

mortgage secured by real property located in the Commonwealth is
an “asset[] within the commonwealth” for purposes of Chapter 93A.
In re Anderson, No. 04-44554-JBR, 2006 WL 2786974, at *1 (Bankr.
D. Mass. Sept. 26, 2006).
The Okoyes concede that they sent no demand letter to WMC
but argue that WMC falls within the limited exception to the
demand requirement.

(Compl. ¶ 84.)

It is undisputed that WMC, a

California corporation, maintains no place of business in
Massachusetts.

However, WMC has presented evidence in the form

of public documents to demonstrate that WMC holds at least one
mortgage in the Commonwealth.

It is apparent, WMC holds “assets

within the commonwealth,” and, consequently, the Okoyes were
required to send WMC a demand letter.

9

The Okoyes’ failure to

send a demand letter “is sufficient ground to justify dismissal
of the Chapter 93A claim[s].”

Rodi, 389 F.3d at 19 (citing,

inter alia, City of Boston v. Aetna Life Ins. Co., 506 N.E.2d
106, 109 (Mass. 1987)).

The Okoyes’ Chapter 93A claims,

therefore, cannot succeed as a matter of law.
In any event, even if the demand requirement were
inapplicable, all Chapter 93A claims arising before August 20,
2006, are time-barred.

See Mass. Gen. Laws ch. 260, § 5A

(“Actions arising on account of violations of . . . chapter
ninety-three A . . . shall be commenced only within four years
next after the cause of action accrues.”).

Mere allegation of a

“continuing violation” does displace the four-year statute of
limitations for Chapter 93A claims.

Salois v. Dime Savs. Bank of

N.Y. FSB, 128 F.3d 20, 25 (1st Cir. 1997); In re Robert, 432 B.R.
464, 470 (Bankr. D. Mass. 2010).

Since the Okoyes’ loan

originated in October 2005, any Chapter 93A claims concerning
actions taken at that time are barred by the statute of
limitations.5
I will therefore dismiss all Chapter 93A claims against WMC.
2.

Chapter 183C Claim

The Okoyes allege that WMC violated Chapter 183C by entering

5

The statute of limitations on Chapter 183C claims is five
years from closing and, therefore, would not bar any otherwise
actionable claims raised under that chapter. Mass. Gen. Laws,
ch. 183C, § 15(b)(1).
10

into a predatory loan.

It is unclear from the face of the

Complaint whether this claim stands alone or was brought as part
of the Okoyes’ broader Chapter 93A claim.6

(Compl. ¶¶ 78–81.)

The language of the Complaint suggests the latter, whereas the
Okoyes’ briefing seems to imply the former.

To the extent that

the claim was brought within the “unfair and deceptive practices”
rubric of Chapter 93A, it must be dismissed for failure to
satisfy the demand-letter requirement and statute of limitations.
See supra Part II.B.1.

And, to the extent that it is a stand-

alone claim, it must be dismissed because the Okoyes’ loan is not
a “high-cost” loan as defined by the statute.
Under Chapter 183C, “[a] lender shall not make a high-cost
home mortgage loan unless the lender reasonably believes at the
time the loan is consummated that 1 or more of the obligors, will
be able to make the scheduled payments to repay the home loan.”
Mass. Gen. Laws ch. 183C, § 4.

The provisions of Chapter 183C

apply only to “high-cost” loans as defined by § 2 of that
chapter.

Mass. Gen. Laws ch. 183C, § 2; see also McDermott v.

Mortg. Elec. Registration Sys., Inc., No.08-12121-GAO, 2010 WL
3895460, at *6 (D. Mass. Sept. 30, 2010); In re Laudani, 401 B.R.
9, 33 (Bankr. D. Mass. 2009).

Under § 2, in order to be “high-

cost,” a loan must meet one of two conditions:

6

The Okoyes have alleged an independent claim under Chapter
183C against all defendants in their proposed amended complaint.
(Proposed Am. Compl. ¶¶ 90–92.)
11

(i) [T]he annual percentage rate at consummation will
exceed by more than 8 percentage points for first-lien
loans . . . the yield on United States Treasury
securities having comparable periods of maturity to the
loan maturity . . . . [or]
(ii) Excluding either a conventional prepayment penalty
or up to 2 bona fide discount points, the total points
and fees exceed the greater of 5 per cent of the total
loan amount or $400 . . . .
Mass. Gen. Laws ch. 183C, § 2.
The Okoyes’ loan satisfies neither condition.

The Complaint

alleges that “[t]he loan in question . . . qualifies as a highcost home loan pursuant to [Chapter] 183C” and recites the
definition provided by § 2.

However, the mortgage documentation

provided by the parties demonstrates otherwise.

First, with an

initial interest rate of 6.5 percent, the loan’s interest rate
did not exceed the comparable Treasury yield by eight percentage
points.

(Compl., Ex. 2.)

Second, the Okoyes’ $9,133.97 in fees

at closing were below the threshold of five percent of the total
loan amount, which would be $29,485.

(Compl., Ex. 1; Litton

Mot., Ex. E.)
The Okoyes allege for the first time in their briefing on
this motion that they never received nor knew of the $71,528.23
in “cash to borrower” listed on the HUD closing document.
at 4.)

(Opp.

However, the Okoyes’ loan application, signed by Victor

Okoye, lists the full loan amount sought as $409,700 and an
estimated “cash []to borrower” amount of $73,613.23 based on
$7,466.93 in estimated fees.

(Litton Supp. Mem., Ex. A (DE 2312

1).)

The $71,528.23 actual “cost to borrower” (based on higher

actual fees) should have come as no surprise to the Okoyes.

It

thus did not constitute a fee within the meaning of Chapter
183C.7

Consequently, the Okoyes’ loan is not a “high-cost” loan,

and the provisions of Chapter 183C are inapplicable.
Accordingly, I must dismiss any Chapter 183C claims.
C.

Litton’s Motion to Dismiss
The Okoyes’ remaining claim against Litton arises not from

the origination of the loan — as is the case with their claim
against WMC — but rather from the servicing of the loan,
including failure to produce documents, failure to credit
payments, bad faith attempts to negotiate loan modification, and
lack of notice of payment increases.

Unlike WMC, however, Litton

does not assert that it holds any assets or maintains a place of
business in the Commonwealth.

Consequently, the lack of a demand

letter is not fatal to the Okoyes’ Chapter 93A claim against
Litton.

However, as explained more fully above, the Okoyes’

allegations against Litton, if sufficiently pled, may only
proceed insofar as they are not time-barred by the applicable
four-year statute of limitations.

7

See supra Part II.B.1.

I must

The Okoyes’ argument that because they did not receive this
“cash to borrower” sum, it constitutes a hidden fee, is similarly
unavailing. According to the loan documents, the sum was not a
fee and, consequently, to the extent that the Okoyes may have
sought to make a claim regarding the purported nonreceipt of the
money, the appropriate action was not under Chapter 183C.
13

therefore examine whether the Okoyes have sufficiently pled their
cause of action against Litton within this limitation.
1.

Chapter 93A Claim

The Okoyes contend that Litton violated Chapter 93A by
acting unfairly at the origination of the loan, failing to modify
the loan, ignoring requests for loan information, making numerous
misrepresentations, and issuing fraudulent documentation, only
two of which (unfairness in the origination of the loan and
failure to grant loan modification) Litton addresses
specifically.

Although the time period for which Litton was

responsible for servicing the loan is unclear at this time, I
must take the factual allegations pled in the Complaint as true.8
Tambone, 597 F.3d at 441.

According to the Complaint, specific

allegations of unfair and deceptive acts by Litton include: (a)
failure to forward payments to the lender (Compl. ¶ 85); (b)
inflating the amount owed (Compl. ¶ 86); (c) failure to produce
documents requested under RESPA (Compl. ¶ 87); (d) refusing to
negotiate modification in good faith and denying HAMP
modification on pretextual grounds (Compl. ¶ 87); (e) improperly
calculating interest rates and fees (Compl. ¶¶ 89–90); and (f)
fraudulently manufacturing documents (Compl. ¶ 91).

8

There is reference to Litton’s servicing beginning on
November 29, 2005, but the factual allegation was not made in the
Complaint and is not supported by any public or other records
submitted.
14

Chapter 93A prohibits “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade
or commerce.”

Mass. Gen. Laws ch. 93A, § 2(a).

Conduct is

“deceptive” when it has “the capacity to mislead consumers,
acting reasonably under the circumstances, to act differently
from the way they otherwise would have acted.”

Aspinall v.

Philip Morris Cos., 813 N.E.2d 476, 488 (Mass. 2004).
conduct, however, has never explicitly been defined.

“Unfair”
See

Fernandes v. Havkin, 731 F. Supp. 2d 103, 116 (D. Mass. 2010);
see also In re Pharm. Indus. Average Wholesale Price Litig. (In
re Pharm. Indus.), 491 F. Supp. 2d 20, 93 (D. Mass 2007) (noting
that, “[i]nstead, whether an act is unfair or deceptive is best
discerned from the circumstances of each case” (citation and
internal quotation marks omitted)).

However, “Massachusetts

courts have . . . enumerated several factors to be considered
when determining whether a practice is unfair.”
Indus., 491 F. Supp. 2d at 93.

In re Pharm.

Those factors are: “(1) whether

the practice . . . is within at least the penumbra of some
common-law, statutory, or other established concept of
unfairness; (2) whether it is immoral, unethical, oppressive, or
unscrupulous; [and] (3) whether it causes substantial injury to
consumers (or competitors or other businessmen).”

Mass. Eye &

Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 69
(1st Cir. 2009) (citation and quotation marks omitted).
15

In considering the factors in the light of the factual
allegations at hand, “[t]he Court should focus ‘on the nature of
challenged conduct and on the purpose and effect of that conduct
as the crucial factors in making a [Chapter 93A] fairness
determination.’”

In re Pharm. Indus., 491 F. Supp. 2d at 94

(citations omitted) (quoting Mass. Emp’r’s Ins. Exch. v.
Propac-Mass, Inc., 648 N.E.2d 435, 438 (Mass. 1995)).

To allege

a Chapter 93A violation successfully, “it is neither necessary
nor sufficient that a particular act or practice violate common
or statutory law.”

Mass. Eye & Ear Infirmary, 552 F.3d at 69.

Whether conduct constitutes a violation of Chapter 93A is a
question of law for the court to decide.

Id. at 69.

However,

while courts performing this “legal gate-keeping function,” id.,
have some leeway at the motion-to-dismiss stage, courts have
determined that certain conduct cannot constitute unfair or
deceptive acts under Chapter 93A.
a.

Violations of HAMP Guidelines

The Okoyes allege that they are eligible for HAMP
modification, complied with the terms of their TPP, and submitted
to Litton all of the necessary documents for HAMP modification.
Consequently, they contend, Litton’s denial of permanent HAMP
modification was a violation of HAMP Guidelines constituting
unfair business practices in violation of Chapter 93A.

16

Because

this issue has become a recurring one both nationally and in this
district,9 I will address it in detail.
The Emergency Economic Stabilization Act of 2008 (“EESA”),
Pub. L. No. 110-343, § 109, 122 Stat. 3765, 3774–76, provided the
Treasury Secretary with the authority to establish HAMP.

“HAMP

provides financial incentives to loan servicers and investors to
encourage them to modify the terms of existing private mortgages
where foreclosures may be avoidable and modification is in the
financial interests of the involved party.”

Phu Van Nguyen v.

BAC Home Loan Servs., LP, No. C-10-01712, 2010 WL 3894986, at *1
(N.D. Cal. Oct. 1, 2010) (footnote omitted).

Under HAMP, loan

servicers voluntarily enter into a contract, called a Servicer
Participation Agreement (“SPA”), with the Federal National

9

Since January 1, 2011, judges of this court have issued at
least ten decisions addressing Chapter 93A claims predicated on
HAMP-related conduct. See Belyea v. Litton Loan Servicing, LLP,
No. 10-10931, 2011 WL 2884964 (D. Mass. July 15, 2011) (Casper,
J.); In re Bank of Am. Home Affordable Modification Prog. (HAMP)
Contract Litig. (In re Bank of Am.), 10-md-02193, 2011 WL 2637222
(D. Mass. July 6, 2011) (Zobel, J.); Stagikas v. Saxon Mortg.
Servs., Inc., — F. Supp. 2d —, 2011 WL 2652445 (D. Mass. July 5,
2011) (Saylor, J.); Kozaryn v. Ocwen Loan Servicing, LLC, — F.
Supp. 2d —, 2011 WL 1882370 (D. Mass. May 17, 2011) (Gorton, J.);
Blackwood v. Wells Fargo Bank, N.A., No. 10-10438-JGD, 2011 WL
1561024 (D. Mass. Apr. 22, 2011) (Dein, M.J.); Alpino v. JPMorgan
Chase Bank, Nat’l Ass’n, No. 10:12040-PBS, 2011 WL 1564114 (D.
Mass. Apr. 21, 2011) (Saris, J.); Morris v. BAC Home Loans
Servicing, L.P., — F. Supp. 2d —, 2011 WL 1226974 (D. Mass. Apr.
4, 2011) (Saris, J.); Brown v. Bank of Am. Corp., No. 10-11085,
2011 WL 1311278 (D. Mass. Mar. 31, 2011) (O’Toole, J.); Bosque v.
Wells Fargo Bank, N.A., 762 F. Supp. 2d 342 (D. Mass. 2011)
(Saylor, J.); Ording v. BAC Home Loans Servicing, LP, No. 1010670, 2011 WL 99016 (D. Mass. Jan. 10, 2011) (Bowler, M.J.).
17

Mortgage Association (“Fannie Mae”), which acts as HAMP
administrator.

See id.

The Treasury Secretary designated the

Federal Home Loan Mortgage Corporation (“Freddie Mac”) as
compliance officer of HAMP.

U.S. Dep’t of Treasury, Supp. Dir.

09-08, at 4 (Nov. 3, 2009); see also Marks v. Bank of Am., N.A.,
No. 03:10-cv-08039-PHX-JAT, 2010 WL 2572988, at *6 (D. Ariz. June
22, 2010).

The SPA establishes the servicers’ obligations and

incorporates, by reference, any Program Guidelines and
Supplemental Directives concerning HAMP that are issued by the
Treasury Department.

(Compl., Ex. A at 2.)

There is no dispute

in this case that Litton participates in the HAMP program.
Because courts have almost uniformly found that HAMP creates
no private right of action,10 consumer protection statutes — and
Massachusetts’s broadly interpreted Chapter 93A in particular —
have become an attractive alternative means of attempting to
10

The overwhelming majority of judicial officers of this
court who have addressed the issue have held that there is no
private right of action for a borrower under HAMP itself. See,
e.g., In re Bank of Am., 2011 WL 2637222, at *3 n.2; Stagikas,
2011 WL 2652445, at *4 (collecting cases); Ording, 2011 WL 99016,
at *7; Durmic, 2010 WL 4825632, at *2 n.9. This is consistent
with courts outside the district. See, e.g., Shurtliff v. Wells
Fargo Bank, N.A., No. 1:10-cv-165, 2010 WL 4609307, at *3 (D.
Utah Nov. 5, 2010); McCurdy v. Wells Fargo Bank, N.A., No. 2:10cv-00880, at *2 (D. Nev. Oct. 18, 2010); Zoher v. Chase Home
Fin., No. 10-14135-CIV, 2010 WL 4064798, at *3 (S.D. Fla. Oct.
15, 2010); Wright v. Bank of Am., N.A., No. CV 10-01723, 2010 WL
2889117, at *4–5 (N.D. Cal. July 22, 2010); see also Wallace v.
Bank of Am., No. 10-cv-017-JL, 2010 WL 2574058, at *3 (D.N.H.
June 17, 2010), adopted by 2010 WL 3219355 (“Congress did not
create a private right of action for individuals to sue banks
under . . . EESA.” (citation omitted)).
18

recover for alleged HAMP violations where no action is otherwise
available.

See Hershenow v. Enterprise Rent-A-Car Co. of Boston,

840 N.E.2d 526, 531 (Mass. 2006) (noting that the lack of a
private right of action under a statute does not “bar all private
remedies for unfair and deceptive . . . practices” unless intent
to do so is apparent from the statute); Whitehall Co. v.
Merrimack Valley Distrib. Co., 780 N.E.2d 479, 483 (Mass. App.
Ct. 2002).

The proliferation of HAMP-related Chapter 93A cases

in this district alone demonstrates this trend.
9.

See supra note

The issue then is whether a violation of the HAMP Guidelines

or failure to grant a loan under those Guidelines can give rise
to a Chapter 93A claim.
Contrary to the Okoyes’ assertions, failure to grant a HAMP
loan, without more, is not a per se Chapter 93A violation.

The

implementing regulations for Chapter 93A state that “an act or
practice is a violation of [chapter] 93A, § 2 if . . . [i]t
violates the Federal Trade Commission Act, the Federal Consumer
Credit Protection Act or other Federal consumer protection
statutes within the purview of [Chapter] 93A, § 2.”
3.16(4).

940 C.M.R. §

Although HAMP Guidelines and supplemental directives

are federal directives governing the contractual obligations of
servicers to the government under SPAs, they are not “federal
consumer protection statutes” because they are not statutes.

See

Zoher v. Chase Home Fin., No. 10-14135-CIV, 2010 WL 4064798, at

19

*3 (S.D. Fla. Oct. 15, 2010) (noting that “the [HAMP] Guidelines
allegedly being violated are not a statute . . .”).

Section

3.16(4), therefore, does not render violations of HAMP per se
violations of Chapter 93A.
The question then is whether the HAMP violations alleged in
the Complaint — here, failure to modify a loan for eligible
borrowers — constitute an otherwise cognizable Chapter 93A
violation.

The failure to modify a loan under HAMP, without

more, cannot constitute a Chapter 93A violation.

A positive

determination on eligibility is not tantamount to immediate
enrollment in a modification program or permanent modification
following a trial period.

As of the dates of Litton’s first

consideration and denial of HAMP modification to the Okoyes in
fall of 2009, Litton was under no obligation to modify the
Okoyes’ loan even if they were eligible.11

See Sankey, 2010 WL

4450404, at *2; see also Simmons v. Countrywide Home Loans, Inc.,
No. 09cv1245, 2010 WL 2635220, at *5 (S.D. Cal. June 29, 2010);
Escobedo v. Countrywide Home Loans, Inc., No. 09cv1557, 2009 WL
4981618, at *3 (S.D. Cal. Dec. 15, 2009) (“The [HAMP] Guidelines
set forth eligibility requirements and states: ‘Participating
servicers are required to consider all eligible loans under the

11

It is arguable that the Treasury Department has since
imposed a requirement that HAMP-eligible borrowers receive — or
be offered evaluation for — loan modifications prior to
foreclosure. U.S. Dep’t of Treasury, Supp. Dir. 10-02, at 5
(Mar. 24, 2010).
20

program guidelines unless prohibited by the rules of the
applicable PSA and/or other investor servicing agreements.’ . . .
The Agreement does not state that Countrywide must modify all
mortgages that meet the eligibility requirements.” (citation
omitted) (emphasis in original)).

Thus, the Okoyes must allege

additional facts demonstrating that the denial of their
application for modification under HAMP was independently
actionable under Chapter 93A.
Within the last year, several judges in this district have
followed this approach and held that “HAMP violations can give
rise to a viable [Chapter] 93A claim if the activity would be
independently actionable under 93A as unfair and deceptive.”12
Morris v. BAC Home Loans Servicing, L.P., — F. Supp. 2d —, 2011
WL 1226974, at *1 (D. Mass. Apr. 4, 2011) (Saris, J.); see also
Blackwood v. Wells Fargo Bank, N.A., No. 10-10438-JGD, 2011 WL

12

Other courts outside of this district have considered HAMP
violations in the context of state consumer protection acts.
Those courts have not explicitly found that HAMP preempts
liability under these acts, but, like the sessions of this court,
instead have considered whether specific violations of HAMP were
otherwise actionable under the state consumer protection
statutes. See, e.g., Boyd v. U.S. Bank, N.A. ex rel. Sasco Aames
Mortg. Loan Trust Series 2003-1, — F. Supp. 2d —, 2011 WL
1374986, at *4 (N.D. Ill. Apr. 12, 2011) (Feinerman, J.); James
v. GMAC Mortg. LLC, — F. Supp. 2d —, 2011 WL 81366, at *12 (D.
Me. Jan. 10, 2011); Joern v. Ocwen Loan Servicing, LLC, No. CV10-0134, 2010 WL 3516907, at *7 (E.D. Wash. Sept. 2, 2010)
(Quakenbush, J.); Zendejas v. GMAC Wholesale Morg. Corp., No.
1:10-cv-00184, 2010 WL 2629899, at *6 (E.D. Cal. June 29, 2010)
(Wanger, J.); Wallace, 2010 WL 2574058, at *4 (D.N.H. June 17,
2010) (McCafferty, M.J.).
21

1561024, at *4 (D. Mass. Apr. 22, 2011) (Dein, M.J.); Ording v.
BAC Home Loans Servicing, LP, No. 10-10670, 2011 WL 99016, at *6
(D. Mass. Jan. 10, 2011) (Bowler, J.); see also Durmic v. J.P.
Morgan Chase Bank, NA, No. 10-cv-10380, 2010 WL 4825632, at *6
(D. Mass. Nov. 24, 2010) (Stearns, J.) (deferring consideration
of motion to dismiss a Chapter 93A claim predicated in part upon
violations of HAMP).

But see Kozaryn v. Ocwen Loan Servicing,

LLC, — F. Supp. 2d —, 2011 WL 1882370, at *2 (D. Mass. May 17,
2011) (Gorton, J.) (questioning broad interpretation of Chapter
93A in the HAMP context but dismissing the claim on the basis
that, even if Chapter 93A permitted recovery for HAMP violations,
the plaintiff failed to allege sufficiently that the violations
were unfair or deceptive).

The judges that have found that HAMP

violations may underlie a Chapter 93A claim have generally
followed the three-part inquiry laid out in Ording and adopted by
Morris: “(1) have plaintiffs adequately plead that defendant
violated HAMP; (2) are those violations of the type that would be
independently actionable conduct under 93A even absent the
violation of a statutory provision (i.e. are the violations
unfair or deceptive); and (3) if the conduct is actionable, is
recovery pursuant to chapter 93A compatible with the ‘objectives
and enforcement mechanisms’ of HAMP.”

Morris, 2011 WL 1226974,

at *4 (quoting Ording, 2011 WL 99016, at *7 (citing Whitehall
Co., 780 N.E.2d at 483)).

22

With respect to the third factor, the decisions that have
considered Chapter 93A in the HAMP context, and found that the
plaintiffs have sufficiently pleaded unfair or deceptive
practices, have found recovery under Chapter 93A compatible with
the objectives of HAMP.

See Blackwood, 2011 WL 1561024, at *4

(“Allowing homeowners facing foreclosure to recover damages under
chapter 93A for a defendant’s failure to comply with HAMP is
compatible with the HAMP objective of providing relief to
defaulting borrowers so as to enable them to stay in their
homes.”); Morris, 2011 WL 1226974, at *6 (“[G]iven the limited
nature of Freddie Mac’s actual enforcement power, there is
nothing about recovery under Chapter 93A that actively conflicts
with the enforcement scheme in the HAMP guidelines.”).
In addressing the first and second factors, the decisions
generally have required allegations of more than mere technical
violations and clerical errors to support a Chapter 93A claim
predicated on HAMP violations.

See Kozaryn, 2011 WL 1882370, at

*3 (dismissing Chapter 93A claim based on servicer’s denial of
loan modification on allegedly false basis of nonsubmission of
financial documents); Brown, 2011 WL 1311278, at *3 (“The
plaintiff has alleged no facts that suggest that this error [in a
letter to the Attorney General] rose above the level of mere
negligence or caused her actual harm.

A Chapter 93A violation

cannot be satisfied by such a low level of error.”); Morris, 2011

23

WL 1226974, at *7 (finding allegations that servicer did not
acknowledge application or issue decision on application within
HAMP deadlines to be nonactionable).

Thus, to survive a motion

to dismiss, “[t]he complaint must demonstrate unfairness to the
degree of factual detail required by Iqbal and Twombly . . . as
opposed to minor delay or trivial clerical flaws.”
WL 1226974, at *7.

Morris, 2011

The few Chapter 93A claims that have survived

motions to dismiss have alleged a pattern of misrepresentations,
failure to correct detrimental errors, and/or dilatory conduct on
the part of the servicer and/or bank that the courts have found
could amount to unfair or deceptive practices.

See Blackwood,

2011 WL 1561024, at *4 (noting that the plaintiff “alleged
numerous misrepresentations regarding the status of his
application for a HAMP modification as well as concerning the
defendants’ intention to foreclose . . . [and] violations of
specific HAMP regulations which prohibit foreclosures while the
applications are pending”); see also Morris, 2011 WL 1226974, at
*7 (finding that representations by the plaintiff at the motion
hearing suggested more than trivial violations of HAMP and,
therefore, denying the motion to dismiss on the condition that
the plaintiff to file an amended complaint).
A group of related cases in this district have addressed
Chapter 93A claims based on a servicer’s specific alleged
misrepresentation that compliance with a HAMP TPP would entitle a

24

mortgagor to permanent modification under HAMP.

See Bosque v.

Wells Fargo Bank, N.A., 762 F. Supp. 2d 342, 353–54 (D. Mass.
2011) (Saylor, J.) (“Plaintiffs allege that they were led to
believe that it would be entitled to a permanent loan
modification or a denial of eligibility if they complied with
their obligations under the TPP.

These allegations are plainly

sufficient to state a claim under ch. 93A for unfair or deceptive
practices.”); see also Belyea v. Litton Loan Servicing, LLP, No.
10-10931, 2011 WL 2884964, at *10 (D. Mass. July 15, 2011)
(Casper, J.); In re Bank of Am. Home Affordable Modification
Prog. (HAMP) Contract Litig., 10-md-02193, 2011 WL 2637222, at *5
(D. Mass. July 6, 2011) (Zobel, J.); Stagikas v. Saxon Mortg.
Servs., Inc., — F. Supp. 2d —, 2011 WL 2652445 (D. Mass. July 5,
2011) (Saylor, J.).

The unfair and deceptive practices alleged

in these cases are not violations of a HAMP directive per se but
rather arise from the servicer’s alleged representation that
compliance with the TPP would lead to permanent modification,
which thereby induced the homeowners to continue payments when
the servicer never intended to modify the loan.

Thus, reliance

on the servicer’s alleged misrepresentation caused “several
injuries . . . including wrongful foreclosures, increased fees,
costs incurred to avoid foreclosure, loss of opportunities to
pursue refinancing or loss mitigation strategies, and emotional
distress.”

Bosque, 762 F. Supp. 2d at 354.

25

According to the Complaint here, the Okoyes entered into a
HAMP TPP with Litton and were told that “if [they] were in
compliance with the trial period plan, then Litton will provide
[them] with a HAMP ‘Modification Agreement’ that would amend and
supplement the Mortgage on the Property and the Note secured by
the Mortgage.”

(See Compl. ¶¶ 51–53.)

The Okoyes also allege

that they complied with the TPP, but, nevertheless, Litton denied
modification on the pretext that the Okoyes failed to submit the
requisite financial documents.

(Compl. ¶¶ 54–58.)

Litton’s

denial of the Okoyes’ application for loan modification itself
may not amount to unfair or deceptive practices actionable under
Chapter 93A, and indeed may not even allege sufficient facts to
demonstrate that any HAMP Guidelines were violated.
2011 WL 1882370, at *3.

See Kozaryn,

However, Litton’s alleged representation

that it would be approved for permanent modification following
successful completion of the TPP is sufficient at this stage to
plead an actionable Chapter 93A claim.

Accordingly, I will not

dismiss the claim on this ground.
b.

Violations of RESPA

Another potential limitation on Litton’s Chapter 93A
liability concerns any allegations of unfair or deceptive conduct
premised solely upon a violation of RESPA.

The case law is

inconsistent as to whether a violation of RESPA alone may be a
predicate for a Chapter 93A violation.

26

Without providing any

underlying analysis, the Massachusetts Appeals Court has stated
that “[n]either may chapter 93A liability be premised upon
asserted violations of the Real Estate Settlement Procedures Act
(RESPA), or upon either the Federal or Massachusetts Truth in
Lending Acts (TILA).”

Horvath v. Adelson, Golden & Loria, P.C.,

773 N.E.2d 478, 2002 WL 1931997, at *4 (Mass. App. Ct. Aug. 21,
2002) (unpublished table opinion) (per curiam).

But, in Barnes

v. Fleet Nat’l Bank, N.A., 370 F.3d 164, 176 (1st Cir. 2004), the
First Circuit held that violations of the TILA, or Truth in
Savings Act, 12 U.S.C. § 4301 et seq., constitute per se Chapter
93A violations.

See also Ording, 2011 WL 99016, at *6–7.

Other

courts have denied motions to dismiss such Chapter 93A claims,
noting that an act or practice violates Chapter 93A if it
“violates the Federal Trade Commission Act, the Federal Consumer
Credit Protection Act or other Federal consumer protection
statutes within the purview of M.G.L. c. 93A, § 2.”
§ 3.16(4).

940 C.M.R.

Such courts have assumed or found that RESPA is a

consumer-protection statute within the meaning of § 3.16(4) and
have permitted cases alleging violations of RESPA to proceed
beyond the motion-to-dismiss stage.

See Martin v. TD Bank, N.A.,

No. 10-10409, 2011 WL 1599692, at *2 (D. Mass. Apr. 27, 2011)
(Zobel, J.); McDermott, 2009 WL 1298346, at *3; In re Holland,
No. 06-1418, 2008 WL 4809493, at *12 (Bankr. D. Mass. Oct. 30,
2008) (Feeney, Bankr. J.).

Especially because the Okoyes’

27

allegation of RESPA violations is intertwined with allegations
that Litton provided false documents and made misleading
statements in relation to the Okoyes’ requests for information, I
decline to dismiss at this time their Chapter 93A claim insofar
as it is predicated solely on RESPA violations.
c.

Bad Faith Negotiations for Loan Modification

Litton argues that the Okoyes’ Chapter 93A claim based on
allegations of bad faith negotiation for loan modification must
fail as a matter of law.

Under Massachusetts case law, absent

explicit provision in the mortgage contract, once a mortgagor
defaults, there is no duty to negotiate for loan modification.
See Carney v. Shawmut Bank, N.A., 893 N.E.2d 802, 2008 WL
4266248, at *3 (Mass. App. Ct. Sept. 19, 2008) (per curiam)
(“While Shawmut was free to negotiate with Carney, it was under
no obligation to do so, and was equally free to exercise the
rights which it had acquired under the loan agreements.”).

The

Okoyes’ mortgage states: “If the default is not cured on or
before the date specified in the notice, Lender at its option may
require immediate payment in full of all sums secured by this
Security Instrument without further demand and may invoke the
STATUTORY POWER OF SALE and any other remedies permitted by
Applicable Law.”

(Litton Mot., Ex. C, ¶ 22.)

As was the case in

Carney, the mortgage document here does not obligate Litton to
negotiate with the Okoyes.

28

However, unlike in Carney, Litton did undertake to negotiate
with the Okoyes and, the Okoyes allege, it was in the process of
those negotiations that Litton acted deceptively and unfairly by
withholding and changing information, providing pretextual
reasons for denying modification, and making misleading
statements regarding the process and the state of the loan.

See

Kattar v. Demoulas, 739 N.E.2d 246, 257 (Mass. 2000) (“Even if
the defendants had the right to foreclose, . . . it was clearly
unfair, within the meaning of [Chapter] 93A, to use that right
for a reason so obviously against public policy.” (citation
omitted)); Latham v. Homecomings Fin. LLC, No. SUCV2008-02100,
2009 WL 6297593, at *5 (Mass. Super. Ct. Nov. 3, 2009)
(recognizing that once the mortgagor enters into negotiations or
even forecloses lawfully, he cannot do so in bad faith).

At this

stage in the litigation, therefore, the proposition set out in
Carney does not preclude the Okoyes’ bad-faith-negotiation
assertions under Chapter 93A.
d.

Other Allegations of Unfair Practices

Although the Okoyes’ allegations against Litton under
Chapter 93A regarding loan origination cannot survive this motion
to dismiss, the Okoyes have pled sufficient allegations of
falsification of documents, uncredited payments, misleading
statements and inducements to continue making payments, failure
to notify the Okoyes of payment and interest rate increases for

29

nearly one year, and other similar acts to raise a colorable
claim under Chapter 93A.

Litton does not provide any argument as

to why these claims are nonactionable under Chapter 93A, and I
can find none.

Thus the Okoyes may proceed with their claim

against Litton insofar as it is consistent with this opinion.
2.

Chapter 183C Claim

I must, however, dismiss all Chapter 183C claims — either
standing alone or predicated upon Chapter 93A — against Litton
because Litton is not subject to liability under that chapter.
Chapter 183C prohibits “[a] lender [from] mak[ing] a
high-cost home mortgage loan . . . .”
§ 4 (emphases added).

Mass. Gen. Laws, ch. 183C,

WMC was the original lender of the loan.

Thus, Litton cannot be held liable under this chapter unless the
Okoyes demonstrate that Litton purchased or was assigned the
loan.

See Mass. Gen. Laws ch. 183C, § 15(a) (“Any person who

purchases or is otherwise assigned a high-cost home mortgage loan
shall be subject to all affirmative claims and any defenses with
respect to the loan that the borrower could assert against the
original lender or broker of the loan.” (emphasis added)).
Okoyes make no such allegations.

The

Accordingly, all Chapter 183C

claims against Litton will be dismissed.
III.

MOTION FOR LEAVE TO AMEND

The Okoyes filed a motion for leave to amend the Complaint
less than forty-eight hours prior to the motion hearing on the

30

outstanding motions to dismiss.

In additional briefing following

the hearing, the defendants opposed the amendment.13
In the proposed amended complaint, the Okoyes add six claims
against the four original defendants in this case, including the
previously dismissed BNY and MERS, alleging fraud,
misrepresentation, unjust enrichment, breach of contract, and
violations of RESPA and the Fair Debt Collections Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq.; assert an additional claim
for violations of the Truth in Lending Act (“TILA”), 15 U.S.C.
§ 1601 et seq. against WMC; and reallege the original Chapter
183C claim as an independent claim against all four defendants.
(Mot. to Amend at 2.)

Puzzlingly, the Okoyes do not reassert

their Chapter 93A claim against Litton or any other defendant,
even though it was, at that time, the sole claim surviving from
the original Complaint.

After reviewing the proposed amended

complaint, I am satisfied that none of the proposed counts state
a viable claim and, consequently, will deny leave to amend the
Complaint.
A.

Standard of Review
In general, “[t]he decision to grant a motion for leave to

amend falls within the trial court’s discretion.”

Jaundoo v.

Clarke, 690 F. Supp. 2d 20, 27 (D. Mass. 2010) (citing Sheehan v.

13

WMC did not submit a brief on this issue, but opposed the
motion orally during the hearing.
31

City of Gloucester, 321 F.3d 21, 26 (1st Cir. 2003)).

Leave to

amend “shall be freely given when justice so requires,” Fed. R.
Civ. P. 15(a), so long as there is no adequate basis for denial
such as “futility, bad faith, undue delay, or a dilatory motive
on the movant’s part,” Hatch v. Dep’t for Children, Youth & Their
Families, 274 F.3d 12, 19 (1st Cir. 2001).

Futility alone is

“fully sufficient to justify the denial of a motion to amend.”
Id.

In cases such as this, in which discovery is yet to be

completed and no summary judgment motion has been filed, futility
is determined by the Rule 12(b)(6) standard.
B.

Id.

Res Judicata
Defendants BNY and MERS, both of which were previously

dismissed from this case by oral grant of their motion to
dismiss, argue that res judicata bars the assertion of any
additional related claims against them.

They contend that the

prior dismissal is a final judgment on the merits and that the
proposed amended complaint constitutes initiation of a improper
subsequent action against them.

Their interpretation of the

doctrine of res judicata is, however, without foundation.
Because the “prior judgment” upon which BNY and MERS rely is
my grant of a motion to dismiss in this case, federal law
controls the res judicata analysis.

Andrews-Clarke v. Lucent

Techs., Inc., 157 F. Supp. 2d 93, 99 (D. Mass. 2001).

In order

for claim preclusion to attach under the doctrine of res

32

judicata, there must be “(1) a final judgment on the merits in an
earlier action; (2) an identity of the causes of action in both
the earlier and later suits; and (3) an identity of parties or
privies in the two suits.”

Kale v. Combined Ins. Co., 924 F.2d

1161, 1165 (1st Cir. 1991) (citations omitted).
Res judicata is inapplicable here because there is no “final
judgment on the merits in an earlier action.”
added).

Id. (emphasis

Although BNY and MERS are correct that dismissal on Rule

12(b)(6) grounds “[o]rdinarily . . . is treated as a dismissal on
the merits,” the First Circuit has also determined that,
“[o]rdinarily, a judgment is not final unless it disposes of all
claims against all parties,” absent a partial final judgment
following summary judgment.
28, 30–31 (1st Cir. 2005).

AVX Corp. v. Cabot Corp, 424 F.3d
In AVX Corp., the First Circuit

distinguished between the preclusive effect of Rule 12(b)(6)
dismissals that “dispose[] of an entire complaint” from those
dismissing “just a subset of the plaintiff’s claims.”

Id. at 31.

In fact, the First Circuit has suggested that amendment following
dismissal of a complaint for failure to state a claim — but
before final judgment is entered in the action — is “especially
appropriate.”

Hayden v. Grayson, 134 F.3d 449, 455 (1st Cir.

1998) (quoting Griggs v. Hinds Junior Coll., 563 F.2d 179, 180
(5th Cir. 1977)) (declining to decide whether an “earlier Rule
12(b)(6) dismissal amounted to a decision ‘on the merits’ and,

33

accordingly, the law of the case” precluding amendment in the
same action).

Accordingly, the Okoyes’ proposed amended claims

against BNY and MERS are not futile on res judicata grounds.
Nevertheless, I am satisfied that the Chapter 183C claim
reasserted in a different guise in the proposed amended complaint
would fail for the same reasons I originally dismissed the claim.
Although not barred by res judicata, the claim as reasserted does
not overcome the flaws of its earlier incarnation.
C.

Sufficiency of the Pleadings
A district court may deny leave to amend a complaint as

futile when the proposed amended claim alleges only conclusory
statements that do not raise any viable claim.

See Chiang v.

Skeirik, 582 F.3d 238, 244 (1st Cir. 2009) (citing Maldonado v.
Fontanes, 568 F.3d 263, 268 (1st Cir. 2009)).

The First Circuit

has recognized that “‘. . . the tenet that a court must accept as
true all of the allegations contained in a complaint is
inapplicable to legal conclusions.

Threadbare recitals of the

elements of a cause of action, supported by mere conclusory
statements, do not suffice.’”

Maldonado, 568 F.3d at 268

(quoting Iqbal, 129 S. Ct. at 1949).

Such recitals fail to state

a viable claim for relief and, as such, cannot survive a motion
to dismiss.

Id.

Thus, because they would not survive a motion

to dismiss, I am satisfied that to permit amendment to include
the Okoyes’ proposed claims of fraud, misrepresentation, unjust

34

enrichment, and violation of the FDCPA would be an exercise in
futility.
First, the Okoyes’ claims of misrepresentation and fraud
fail to satisfy the pleadings standard laid out in Iqbal.

The

fraud count conclusorily alleges that “[d]efendants have
committed fraudulent representations, actions and omission since
the inception of the mortgage loan executed on October 4, 2005.”
(Proposed Am. Compl. ¶ 64.)

Similarly, in the misrepresentation

count, the Okoyes assert that “[d]efendants have made and
continue to make misrepresentations as to facts relative to the
instant action.”

(Proposed Am. Compl. ¶ 67.)

According to the

Okoyes, they “have been and continue to be damaged” by this fraud
and misrepresentation (they do not indicate whether they allege a
claim for negligent or deliberate misrepresentation).
Am. Compl. ¶¶ 65, 68.)

(Proposed

These blanket allegations of law are

precisely the kind that the Supreme Court sought to address in
Iqbal.

See 129 S. Ct. at 1949.

Although the Okoyes allege in

their briefing that Litton provided inconsistent quotes of the
amount due on the loans and denied HAMP modification based on the
fraudulent reason that not all documents were provided, these
factual assertions are not sufficient to survive a challenge
under Federal Rule of Civil Procedure 8(a), let alone the
heightened pleadings requirement for allegations of fraud set out
by Federal Rule of Civil Procedure 9(b).

35

Compare Fed. R. Civ. P.

8(a) (requiring that a claim for relief contain “a short and
plain statement of the claim showing that the pleader is entitled
to relief . . . .”), with Fed. R. Civ. P. 9(b) (“In alleging
fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.”).

See also

Corcoran v. Saxon Mortg. Servs., Inc., No. 09-114680-NMG, 2010 WL
2106179, at *5 (D. Mass. May 24, 2010) (“Under the relevant
pleading standards, Corcoran’s allegations of fraud are woefully
inadequate. He does not identify with any degree of specificity:
1) the misrepresentations allegedly made by Saxon, 2) the person
or persons who made them 3) when and where they took place, 4)
their materiality, 5) his reliance on them or 6) the resulting
harm. Nor does his memorandum explain his failure to provide
those necessary elements.”).

Accordingly, amendment of the

Complaint to include the proposed claims of fraud and
misrepresentation would be futile.14
Second, the Okoyes similarly fail to provide sufficient
allegations to support their claim of a violation of the FDCPA.
Indeed, the Okoyes fail to cite to a single provision of the
FDCPA that was allegedly violated by the defendants.

14

Rather,

Even if these claims were sufficiently pled, they would be
foreclosed at least in part by Massachusetts’s three-year statute
of limitations for tort claims. See Mass. Gen. Laws ch. 260,
§ 2A; Salois v. Dime Sav. Bank of N.Y., 128 F.3d 20, 24 & n.4
(1st Cir. 1997). For example, any claims for misrepresentations
or fraud allegedly occurring at the origination of the mortgage
would be barred by the statute of limitations.
36

like many of their other claims, the FDCPA claim is based on
broad generalities.

The proposed amended complaint simply

states: “Litton purports to act for the other Defendants in order
to collect a mortgage debt.

Litton has sent communications to

plaintiffs claiming to collect a debt.

Litton continuously and

systematically refuses to show documentation regarding the debt
in [sic] which Litton is attempting to collect.”
Compl. ¶¶ 80–82.)

(Proposed Am.

The Okoyes’ briefing sheds no light on the

issue, as it fails entirely to address the FDCPA claim.
Consequently, such a claim cannot survive a Rule 12(b)(6) motion,
and amendment would be futile.
Third, the breach-of-contract claim fails to satisfy even
the minimal pleading requirements of Rule 8(a).

The Okoyes

assert that “[d]efendants have collectively and individually
breached the contract between Plaintiffs and Defendants.”
(Proposed Am. Compl. ¶ 85.)

Consequently, the Okoyes maintain,

they “have been and continued to be damaged.”
Compl. ¶ 86.)

(Proposed Am.

One may assume that the contract at issue is the

mortgage, or perhaps the TPP, but the specific breaches of any
document and the resulting damages have not been outlined in
either the claim language or in the factual section of the
proposed amended complaint.

Amendment of the Complaint to add

this claim, therefore, would likewise be futile.

37

Finally, the Okoyes’ unjust enrichment claim also fails to
state a viable claim.

The entirety of the Okoyes’ unjust

enrichment claim is that “[d]efendants have been unjustly
enriched through the mortgage loan which was executed on October
4, 2005, its subsequent fees, interests, and payments received
thereon.”

(Proposed Am. Compl. ¶ 88.)

The Okoyes elaborate

somewhat on this assertion in their briefing on the motion to
amend, in which they argue that the defendants (namely, Litton)
were unjustly enriched by “receiv[ing] payments based on
erroneous loan amounts,” attaching unwarranted fees, and inducing
the Okoyes to make loan payments under TPP and then denying the
loan modification.

However, as explained more fully above,

Litton was under no obligation to grant a loan modification.
Furthermore, the Okoyes do not allege in the proposed amended
complaint sufficient facts to outline the inappropriateness of
the fees or that payments were based on an improper principal.15
D. TILA Claim
Just as the Okoyes ran into statute-of-limitations barriers

15

Even if the Okoyes had complied with the pleadings
requirements as to this claim, it still would have failed to
state a claim. Under Massachusetts law, the equitable claim of
unjust enrichment is only available when there is no adequate
remedy at law. Santagate v. Tower, 833 N.E.2d 171, 176 (Mass.
App. Ct. 2005). Chapter 93A and properly pled breach-of-contract
claims are appropriate legal remedies that preclude equitable
relief here. See Fernandes v. Havkin, 731 F. Supp. 2d 103, 115
(D. Mass. 2010); Smith v. Jenkins, 718 F. Supp. 2d 155, 172 (D.
Mass 2010).
38

to their Chapter 93A claim against WMC in the original Complaint,
they do so again in their proposed TILA claim.

The Okoyes allege

that WMC violated the TILA by failing to provide copies of the
mortgage, closing documents, and HUD statement within a
reasonable time after the execution of the mortgage on October 4,
2005.

(Proposed Am. Compl. ¶¶ 11–12, 75–78.)

The Okoyes

maintain that because they did not receive the documents, they
did not know that they were entitled to the $71,523.23 “cash to
borrower” sum.

(Proposed Am. Compl. ¶¶ 12, 77.)

The statute of limitations establishes a one-year bar to all
claims under TILA for money damages.

15 U.S.C. § 1640(e).

When

the TILA claim is “based on insufficient disclosures, the
limitation period runs from the date of the transaction at which
the disclosures should have been made,” which here is October 4,
2005.

See Corcoran, 2010 WL 2106179, at *3; see also Rodrigues

v. Members Mortgage Co., Inc., 323 F. Supp. 2d 202, 210 (D. Mass.
2004).

Equitable tolling is inappropriate in this case because

the Okoyes were aware — or should have been aware — of the lack
of disclosure within in one year of closing.

See Corcoran, 2010

WL 2106179, at *3 (“Although equitable tolling can rescue a TILA
claim otherwise barred by the statute of limitations when the
plaintiff has ‘in some extraordinary way . . . been prevented
from asserting his rights.’” (citations omitted)).

Victor Okoye

is presumed to have read the mortgage application that he signed

39

and in which the “cash to borrower” sum appeared.

The Okoye’s

had nearly five years to realize that the more than $71,000 cited
in their application had not been disbursed and to seek relief.
They did not do so and they cannot do so now under the TILA.

To

add this claim, therefore, would be futile.
E. RESPA Claim
Consistent with the previously discussed proposed amended
claims, the Okoyes assert their RESPA claim using only broad
generalizations.

They cite to the RESPA statute generally, but

do not identify the provision(s) of that statute that the
defendants allegedly violated.
¶¶ 69–74.)

(See Proposed Am. Compl.

The proposed amendment, however, appears to raise two

purported violations: failure to provide the documentation
requested by the Okoyes by letter and failure to provide
accounting or periodic statements regarding the escrow account
connected with the loan.

(Proposed Am. Compl. ¶¶ 71–72.)

The only provision of RESPA cited by the Okoyes is 12 U.S.C.
§ 2609, which outlines lenders’ and servicers’ obligations
regarding escrow accounts.

The Okoyes’ refer to this provision

only in passing in their briefing in response to the defendants’
opposition to the motion for leave to amend.

However, insofar as

the Okoyes’ proposed amended complaint asserts a claim under

40

§ 2609,16 that claim is futile.

The majority of circuits that

have considered suits under § 2609 have held that “no private
right of action exists because ‘the Secretary shall assess to the
lender or escrow servicer failing to submit the statement a civil
penalty.’”

Hardy v. Regions Mortg., Inc., 449 F.3d 1357, 1359

(11th Cir. 2006); see also Clayton v. Raleigh Fed. Sav. Bank, 107
F.3d 865, 1997 WL 82624 (4th Cir. 1997) (unpublished table
opinion) (per curiam) (holding that § 2609 does not create a
private right of action); Allison v. Liberty Sav., 695 F.2d 1086,
1091 (7th Cir. 1982) (holding no implied right of action exists
under § 2609); cf. Johnson v. Washington Mut. Bank, F.A., 216 F.
App’x 64, 66 (2d Cir. 2007) (summary order) (leaving the issue
undecided but acknowledging that § 2609 may not create a private
right of action); DeBoer v. Mellon Mortg. Co., 64 F.3d 1171, 1177
(8th Cir. 1995) (declining to decide the question but recognizing
that the majority of circuits have found no private right of
action).

Only one circuit has found otherwise.

See Vega v.

First Fed. Sav. & Loan Ass’n of Detroit, 622 F.2d 918, 925 n.8
(6th Cir. 1980) (concluding that although Congress did not
explicitly provide for a cause of action for violations of
§ 2609, Congress actually did so because it intended to create a

16

Section 2609 establishes limits on how much a lender can
require a borrower to deposit into an escrow account and requires
servicers to provide borrowers with initial and annual statements
regarding any escrow account set up in conjunction with a loan.
12 U.S.C. § 2609(a), (c).
41

private remedy for violations of RESPA).

The First Circuit has

not itself addressed this issue, although Judge Brody in the
District of Maine followed the majority of the circuits in
finding no private right of action under § 2609.

See Campbell v.

Machias Sav. Bank, 865 F. Supp. 26, 31 (D. Me. 1994).

Given the

language of § 2609, which leaves penalties for violations of this
provision to the Secretary of the Treasury, I am satisfied that
there is no private right of action and that this proposed
amended claim is futile at least insofar as it asserts a
violation of § 2609.
Next, although there is a private right of action under §
2605, the Okoyes have failed to assert a viable claim under this
provision.

RESPA mandates that “[i]f any servicer of a federally

related mortgage loan receives a qualified written request from
the borrower (or an agent of the borrower) for information
relating to the servicing of such loan, the servicer shall
provide a written response acknowledging receipt of the
correspondence within 20 days . . . unless the action requested
is taken within such period.”

12 U.S.C. § 2605(e)(1)(A).

And,

within sixty days of receipt of a qualified written response, the
servicer must make appropriate corrections or investigations and
provide the borrower with a written clarification or correction.
12 U.S.C. § 2605(e)(2).

42

In order to make out a claim for relief under § 2605(e), the
Okoyes must allege sufficient facts to “show: (1) that the
servicer failed to comply with the statute’s [qualified written
request] rules; and (2) that the plaintiff incurred ‘actual
damages’ as a consequence of the servicer’s failure.”

Anokhin v.

BAC Home Loans Servicing, LLP, No. 2:10-cv-00395-MCE-EFB, 2010 WL
5393972, at *3 (E.D. Cal. Dec. 22, 2010).

In order to plead

“actual damages” sufficiently, the plaintiff must allege specific
damages and identify how the purported RESPA violations caused
those damages.

See, e.g., Javaheri v. JPMorgan Chase Bank, N.A.,

No. CV10-08185, 2011 WL 97684, at *5 (C.D. Cal. Jan. 11, 2011)
(recognizing that withholding of information, without pecuniary
and actual damages, is not sufficient to allege “actual damages”
under § 2605(f)); Torres v. Wells Fargo Home Mortg., Inc., No. C
10-04761, 2011 WL 11506, at *8 (N.D. Cal. Jan. 4, 2011) (“The
plaintiff must include, at the pleading stage, a demonstration of
some actual pecuniary loss.

The plaintiff must also allege a

causal relationship between the alleged damages and the RESPA
violation.” (citations omitted)); Claxton v. Orlans Assocs.,
P.C., No. 10-11813, 2010 WL 3385530, at *5 (E.D. Mich. Aug. 26,
2010) (“[A]lleging a breach of RESPA duties alone does not state
a claim under RESPA.

Plaintiffs must, at minimum, also allege

that the breach resulted in actual damages.” (quoting Hutchison
v. Del. Sav. Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J. 2006));

43

Holland, 2008 WL 4809493, at *9 (dismissing § 2605(e) claim
because damages were not sufficiently pled); see also McLean v.
GMAC Mortg. Corp., No. 09-11054, 2010 WL 3784527, at *3–4 (11th
Cir. Sept. 30, 2010) (per curiam) (affirming summary judgment in
favor of defendants on RESPA “actual damages” claim because the
plaintiffs “offered no competent evidence demonstrating that any
of their alleged injuries were caused by the said violations”);
Eronini v. JPMorgan Chase Bank, N.A., 368 F. App’x 841, 842 (9th
Cir. 2010) (per curiam) (“The district court properly dismissed
the action because [the plaintiff] suffered no damages as a
result of the alleged RESPA violation.”).
The Okoyes maintain that they sent as many as five qualified
written requests17 for information regarding their payment
history and the amount of the remaining principal, but never
received the documentation that they requested.
Compl. ¶¶ 70–71.)

(Proposed Am.

They concede that Litton did respond to at

least some of those qualified requests, but allege that Litton
did not enclose the documentation listed in the letters as
enclosures.

(Proposed Am. Compl. ¶¶ 34, 38, 56.)

I am satisfied

that the Okoyes have sufficiently pled that they sent at least
one letter to Litton that qualifies as a qualified written

17

The Okoyes allege that they sent letters qualifying as
qualified written requests on November 13, 2009, December 2,
2009, January 11, 2010, February 1, 2010, and February 14, 2010.
(Proposed Am. Compl. ¶¶ 25, 31, 38–40.)
44

response under the statute.

In alleging damages and causation,

however, the Okoyes return to their pattern of broad strokes.
They allege that “[d]ue to the Defendants [sic] willful and
malicious refusal to supply the requested documentation and
disregard of its statutory duty to supply annual accounting of
the escrow account, Plaintiffs have been and continue to be
damaged.”

(Proposed Am. Compl. ¶ 74.)

The damages alleged due

to the § 2605(e) violation — as opposed to any alleged § 2609
violations — are unspecified, and the Okoyes fail to address this
issue in their briefing on this motion.
¶¶ 25, 30, 31, 38–40.)

(See Proposed Am. Compl.

Moreover, they fail to allege any damages

suffered because they never received responses to those
particular letters.

Instead, the damages generally referred to

in the Complaint arise from fees and other charges largely
assessed prior to sending the first qualified written request to
Litton.

Therefore, the Okoyes have failed to plead a necessary

element of their § 2605(e) RESPA claim sufficiently.

See

Copeland v. Lehman Bros. Bank, FSB, No. 09cv17740-WQH-RBB, 2011
WL 9503, at *4 (S.D. Cal. Jan. 3, 2011) (dismissing a RESPA
action because conclusory allegations regarding additional fees,
legal fees, missed work, emotional distress, and revocation of
credit rating were insufficient to allege “actual damages”);
Anokhin, 2010 WL 5393972, at *3 (“Inability to confirm detail of
Plaintiff’s mortgage does not constitute real and actual

45

damages.”); Gorham-DiMaggio v. Countrywide Home Loans, Inc., No.
1:08-cv-019, 2009 WL 1748743, at *9 (N.D.N.Y. June 19, 2009)
(“[A] mere demand for damages is not sufficient.”); Holland,
2008 WL 4809493, at *10 (alleging additional fees and interest
accrual is not sufficient when those amounts are not quantified).
Furthermore, the Okoyes fail to plead a claim for statutory
damages under § 2605(f)(1)(b) sufficiently.

See Copeland, 2011

WL 9503, at *3 (dismissing a claim under § 2605(f)(1)(b) because
the plaintiffs did not identify any experiences other than their
own that demonstrate a pattern or practice of noncompliance with
§ 2605).
Accordingly, because the Okoyes fail to allege that they
suffered any distinct damages as a result of Litton’s alleged
noncompliance with § 2605(e) of RESPA, and because the statutory
damages under § 2605(f) are unavailable, I am satisfied that
amending the Complaint to include this claim would be futile.
IV. CONCLUSION
For the reasons laid out more fully above, I GRANT WMC’s
motion to dismiss (Doc. No. 18), DENY in part and GRANT in part
Litton’s motion to dismiss (Doc. No. 10), and DENY the Okoyes’
motion for leave to amend the Complaint (Doc. No. 25).

/s/ Douglas P. Woodlock
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE
46