Alexander v. Fay Servicing, LLC

Filing 12

///ORDER granting 11 Motion to Dismiss for Failure to State a Claim. Clerk shall enter judgment and close the case. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Connie Alexander
v.

Civil No. 18-cv-252-JD
Opinion No. 2018 DNH 100

Fay Servicing, LLC

O R D E R
Connie Alexander, proceeding pro se, brought suit in state
court to enjoin the foreclosure sale of her home by Fay
Servicing, LLC.

Fay Servicing removed the case to this court,

and now moves to dismiss the complaint.

Alexander did not file

a response.

Standard of Review
In considering a motion to dismiss, the court accepts all
well-pleaded facts as true, disregarding mere legal conclusions,
and resolves reasonable inferences in the plaintiff’s favor.
Galvin v. U.S. Bank, N.A., 852 F.3d 146, 155 (1st Cir. 2017).
Taken in that light, to avoid dismissal, the complaint must
state sufficient facts to support a plausible claim for relief.
In re Curran, 855 F.3d 19, 25 (1st Cir. 2017).

The plausibility

standard is satisfied if the factual allegations in the
complaint “are sufficient to support the reasonable inference

that the defendant is liable.”

In re Fidelity ERISA Float

Litig., 829 F.3d 55, 59 (1st Cir. 2016) (internal quotation
marks omitted).

The complaint need not include “a high degree

of factual specificity” but “must contain more than a rote
recital of the elements of a cause of action.”

Carcia-Catalan

v. United States, 734 F.3d 100, 103 (1st Cir. 2013) (internal
quotation marks omitted).
Background
Alexander provided few facts in her pro se complaint.

She

filed an emergency motion to stay the foreclosure sale of her
property, which also provided little information.

In support of

its objection to Alexander’s emergency motion, Fay Servicing
argued that because of Alexander’s bankruptcy discharge it could
not seek payment of the debt.1

The court denied Alexander’s

emergency motion to stay the foreclosure sale.
Alexander moved for reconsideration, stating only, “Pls
Review Evidence attached.”

She submitted copies of three

letters from Fay Servicing, which document Alexander’s efforts
to be approved for reinstatement and modification of her loan
after her bankruptcy discharge.

She also submitted a list of

Fay Servicing provided a copy of a form, Schedule D,
“Creditors Who Have Claims Secured by Property,” that Alexander
filed in her Chapter 7 bankruptcy proceeding and a copy of her
bankruptcy discharge.
1

2

“Fay Servicing Contact Phone Calls” and her own statement to
support her motion.

The motion for reconsideration was denied.

The documents that have been submitted by Alexander and Fay
Servicing are considered for purposes of the motion to dismiss.
The background facts are those provided in the order denying the
emergency motion with additional facts from the documents
submitted by Alexander in support of her motion for
reconsideration and documents submitted by Fay Servicing.
In 2004, Alexander borrowed $124,720.00 to buy property on
Vista Ridge Drive in Londonderry, New Hampshire.
secured by a mortgage on the property.

Her loan was

In 2016, Alexander’s

note and mortgage were assigned to Wilmington Savings Fund
Society, FSB, dba Christiana Trust, as trustee for BCAT 201514BTT.

Fay Servicing is the servicer for the mortgage and note.

Alexander defaulted on her mortgage payments, and Fay Servicing
started foreclosure proceedings.
Alexander contacted Fay Servicing to apply for a
modification of her mortgage.

When the terms were presented,

she realized that she could not make the payments that were
required.

She later attempted to apply for a second

modification, while the foreclosure proceedings were in
progress, without success.

3

On February 28, 2017, Alexander filed for bankruptcy
protection under Chapter 7.

In re Alexander, 17-10251-JMD

(Bankr. D.N.H. Feb. 28, 2017).

Alexander listed Wilmington

Savings Bank as a creditor and stated that the property at Vista
Ridge Drive secured Wilmington Savings Bank’s claim.

The

bankruptcy court granted Alexander a discharge on May 31, 2017.
Doc. 6-2.

The bankruptcy case was closed on June 9, 2017, and

Alexander received a discharge.
The letters that Alexander appended to her motion for
reconsideration show that she continued to contact Fay Servicing
after receiving the bankruptcy discharge to apply for
modification of her loan and mortgage.
failed attempts at loan modification.

The letters show several
On March 21, 2018, Fay

Servicing sent Alexander a letter that explained the history of
her loan and informed her that the foreclosure sale would not be
postponed.
In response, Alexander filed a complaint in state court to
enjoin the foreclosure sale.

The complaint is a state court

form that Alexander completed, which directs her to provide
certain information.

She described her efforts to keep current

on her mortgage as follows:

“Attached:

Was not informed that I

had 37 days to submit BA - when I submitted I reached out to Fay
numerous times via voicemail & Email – no contact, no phone

4

calls back — no emails returned - - I did not learn foreclosure
was still pending until I spoke to a manager on Monday – see
attached for better description.”2

To describe why she was

asking the court to enjoin the foreclosure sale, Alexander
wrote:

“Attached – I have a strong buyer for the home – but was

not given proper notice to allow them to purch – Either I would
like to modify (as I have what is needed) or I will sell the
property.

Do not want a foreclosure on my credit report.”

She

further stated that she was not informed about “time frames” for
sending in her applications for modification of the loan and
asks the court to order Fay Servicing to grant her a “work-out,
modification, or give me the opportunity to sell the home.”
The state court granted an ex parte injunction to stop the
foreclosure sale and scheduled a hearing.

Fay Servicing removed

the case to this court on March 28, 2018.

The foreclosure sale

of Alexander’s property was scheduled for Monday, April 16.
Neither party has informed the court as to whether the
foreclosure sale occurred.
Discussion
Alexander does not clearly state a claim in the complaint.
Fay Servicing moves to dismiss the complaint on the ground that

2

Nothing was attached to the complaint.
5

Alexander fails to state a claim because she did not allege that
she was granted a discharge in bankruptcy.3
A bankruptcy discharge order “operates as an injunction
against the commencement or continuation of any action . . . to
collect, recover, or offset any such debt as a personal
liability of the debtor.”

11 U.S.C. § 524(a)(2); Bates v.

CitiMortgage, Inc., 844 F.3d 300, 304 (1st Cir. 2016).

Although

the debtor’s personal liability for the debt is extinguished by
the discharge, “the mortgage holder still retains a ‘right to
payment’ in the form of its right to the proceeds from the sale
of the debtor’s property.”
78, 84 (1991).

Johnson v. Home State Bank, 501 U.S.

For that reason, although the debtor is released

from personal liability for the debt, the discharge “does not
prohibit a secured creditor from enforcing a valid prepetition
mortgage lien.”

Best v. Nationstar Mortg. LLC, 540 B.R. 1, 9

(B.A.P. 1st Cir. 2015).

Further, a debtor may request and agree

to reinstate or reaffirm the loan, with a payment plan, in order
to avoid foreclosure.

See Williams v. Rushmore Loan Mgmt.

Although Fay Servicing represents that it could not
discuss a modification of Alexander’s loan and mortgage without
violating the injunction imposed by the discharge, the
interactions between Fay Servicing and Alexander after the
discharge show that it did consider modification.
3

6

Servs., LLC, 2018 WL 1582515, at *10 (D. Conn. Mar. 31, 2018);
see also 11 U.S.C. § 524(j).
While Fay Servicing is correct that Alexander received a
bankruptcy discharge, which extinguished her personal liability
for the debt, that was not the end of the story.

After the

discharge was entered, Alexander contacted Fay Servicing and was
granted opportunities to repay the debt in order to avoid
foreclosure.

Those attempts, however, were unsuccessful, which

is the basis for Alexander’s complaint.
Alexander’s reference to thirty-seven days appears to
derive from Fay Servicing’s notice to her that because she had
not completed the borrower’s assistance form more than thirtyseven days before the scheduled foreclosure sale, the
foreclosure would proceed.

That rule is taken from Regulation X

of the Real Estate Settlement Procedures Act, 12 C.F.R. §
1024.41(g), which provides that if a servicer receives a
“complete loss mitigation application more than 37 days before a
foreclosure sale”, the service must comply with certain
procedures before conducting a foreclosure sale.

Based on the

information in the letters, Alexander’s application had not even
been submitted, much less completed, less than two weeks before
the scheduled foreclosure.

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Alexander cites no requirement that a servicer must notify
a borrower of the requirements imposed by Regulation X.
also does not allege any violation of Regulation X.

She

Further,

Alexander cites no contractual or statutory obligation for Fay
Servicing to grant her a loan modification.

See Flores v.

OneWest Bank, F.S.B., 886 F.3d 160, 166-67 (1st Cir. 2018).
Because Alexander did not respond to the motion to dismiss, she
has provided no clarification or support for her claims.

Conclusion
For the foregoing reasons, the defendant’s motion to
dismiss (document no. 11) is granted.
The clerk of court shall enter judgment accordingly and
close the case.
SO ORDERED.
__________________________
Joseph A. DiClerico, Jr.
United States District Judge

May 15, 2018
cc:

Connie Alexander, pro se
Richard C. Demerle, Esq.

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