Aazami v. Wells Fargo Bank, N.A. et al

Filing 70

Opinion and Order. The Court GRANTS Wells Fargo's Request (# 44 ) for Judicial Notice, GRANTS Plaintiff's Request (# 62 ) for Judicial Notice, GRANTS Wells Fargo's Motion (# 65 ) to Strike, GRANTS Wells Fargos Amended Motion (# 57 ) for Summary Judgment, and GRANTS QLS's Motion (# 59 ) for Summary Judgment. IT IS SO ORDERED. See attached order for further details. Signed on 1/22/19 by Judge Anna J. Brown. (jy)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
AZHANG SHAINE AAZAMI,
Plaintiff,
v.
WELLS FARGO BANK, N.A.,
a California Corporation, and
QUALITY LOAN SERVICE
CORPORATION OF WASHINGTON,
a Washington Corporation,
Defendants.
JEFFREY A. LONG
Oregon Consumer Law Center
4248 Galewood St.
Lake Oswego, OR 97035
[phone]
MARC E. DANN
DannLaw
2728 Euclid Ave
Suite 300
Cleveland, OH 44115
[phone]
Attorneys for Plaintiff

1 - OPINION AND ORDER

3:17-cv-01564-BR
OPINION AND ORDER

BARBARA L. BOLLERO
ANN T. MARSHALL
Anglin Flewelling Rasmussen Campbell & Trytten LLP
701 Pike Street
Suite 1560
Seattle, WA 98101
[phone]
Attorneys for Defendant Wells Fargo Bank, N.A.
JOHN M. THOMAS
McCarthy & Holthus
920 S.W. Third Avenue
Portland, OR 97204
[phone]
Attorneys for Defendant Quality Loan Service
Corporation of Washington
BROWN, Judge.
This matter comes before the Court on the Request (#44) of
Defendant Wells Fargo Bank, N.A., for Judicial Notice;
Plaintiff’s Request (#62) for Judicial Notice; Wells Fargo’s
Motion (#65) to Strike (part of Wells Fargo’s Reply to its Motion
for Summary Judgment)1; Wells Fargo’s Motion (#57)2 for Summary

1

Although Local Rule 7-1(b) prohibits parties from
combining motions “with any response, reply, or other pleading,”
the Court will consider Wells Fargo’s Motion to Strike due to the
late stage of the pleadings and the fact that Wells Fargo
conferred with Plaintiff before bringing the Motion to Strike.
2

On August 21, 2018, Wells Fargo filed a Motion (#41) for
Summary Judgment. On November 6, 2018, Wells Fargo filed a
Memorandum (#57) in Support of its Motion for Summary Judgment in
which it states the Memorandum “entirely supplants [its] original
Motion for Summary Judgment.” Accordingly, although Wells Fargo
did not title its November 6, 2018, Memorandum as a Motion for
Summary Judgment, the Court will treat it as an Amended Motion
for Summary Judgment.
2 - OPINION AND ORDER

Judgment; and the Motion (#59) for Summary Judgment of Defendant
Quality Loan Services (QLS).
For the reasons that follow, the Court GRANTS Wells Fargo’s
Request for Judicial Notice, GRANTS Plaintiff’s Request for
Judicial Notice, GRANTS Wells Fargo’s Motion to Strike, and
GRANTS Defendants’ Motions for Summary Judgment.

BACKGROUND
The following facts are taken from the Complaint, the
parties’ Joint Statement of Agreed Facts, and the parties’
filings related to Defendants’ Motions for Summary Judgment and
the parties’ Requests for Judicial Notice.
On January 2, 2013, Plaintiff Azhang Shaine Aazami and his
wife Aletia Aazami3 executed a 30-year fixed-rate FHA loan via a
promissory note for $405,300.00 with nonparty USA Direct Funding
as the lender.

Plaintiff also executed a Trust Deed securing

certain residential real property with MERS acting “solely as the
nominee for Lender” and as beneficiary.
Agreed Facts, Ex. B.

Joint Statement of

The Trust Deed was recorded in the records

of Jackson County on January 7, 2013.

3

Aletia Aazami is not a party to this action.

3 - OPINION AND ORDER

Also on January 2, 2013, Plaintiff executed an Allonge3 to
Note as follows:
IN FAVOR OF:

USA DIRECT FUNDING

AND EXECUTED BY:

[PLAINTIFF]

PAY TO THE ORDER OF [WELLS FARGO BANK, N.A.]
WITHOUT RECOURSE USA DIRECT FUNDING
Compl., Ex. 4 at 13.
On June 23, 2014, Wells Fargo sent the Aazamis a letter in
which it advised:
Your mortgage loan is in default. Please contact
us immediately to discuss your situation. We
would like to meet with you to review your
financial situation and determine possible options
to assist you in bringing your loan current.
Please call us at 1-800-416-1472 to set up a time
to discuss your financial situation.
Joint Statement of Agreed Facts, Ex. C.
On June 30, 2014, the Aazamis signed a certified mail
return-receipt indicating they had received Wells Fargo’s
June 23, 2014, letter.
On August 14, 2014, MERS, acting as nominee, assigned the
Trust Deed to Wells Fargo.

The Assignment of Trust Deed was

recorded in Jackson County on August 14, 2014.
On September 5, 2014, the Aazamis signed an FHA HAMP Trial

3

An allonge is a “slip of paper sometimes attached to a
negotiable instrument for the purpose of receiving further
indorsements when the original paper is filled with
indorsements.” Allonge, Black’s Law Dictionary (8th ed. 2004).
4 - OPINION AND ORDER

Plan – Terms and Conditions (the HAMP TPP), in which they agreed
to a trial plan of payments due October, November, and
December 1, 2014.

The parties agree, however, that Plaintiff has

not made any mortgage payments since at least August 1, 2014.
On October 7, 2015, the State of Oregon Foreclosure
Avoidance Program issued a Certificate of Compliance with the
Oregon Foreclosure Avoidance Program and indicated the Aazamis
“did not pay the required fee by the deadline.”

Joint Statement

of Agreed Facts, Ex. G.
On December 31, 2015, Wells Fargo appointed Defendant QLS as
the Trustee of the Deed of Trust.

The Appointment was recorded

in Jackson County on January 12, 2016.
On June 8, 2016, Aletia Aazami quit-claimed her interest in
the property to Plaintiff.

The Quitclaim Deed was recorded in

Jackson County on June 13, 2016.
On April 17, 2017, the State of Oregon Foreclosure Avoidance
Program issued a Certificate of Compliance with the Oregon
Foreclosure Avoidance Program and indicated Plaintiff “complied
with the requirements [of the program].”

Joint Statement of

Agreed Facts, Ex. J.
On May 15, 2017, Plaintiff sent three Requests for
Information (RFI) to Wells Fargo seeking various documents
pursuant to Regulation X of the Mortgage Servicing Act, 12 C.F.R.
§ 1024.36.

Wells Fargo responded to Plaintiff’s requests on

5 - OPINION AND ORDER

May 22 and 24, 2017.
On May 30, 2017, QLS recorded in Jackson County a Notice of
Default and Election to Sell Plaintiff’s property in which it
noted a scheduled sale of Plaintiff’s property would be held
October 16, 2017.
On July 19, 2017, Plaintiff sent to Wells Fargo a Notice of
Error (NOE) pursuant to 12 C.F.R. § 1024.35(b)(11) in which
Plaintiff alleged Wells Fargo had failed to respond properly to
Plaintiff’s RFIs.

Wells Fargo received the NOE on July 25, 2017.

On August 3, 2017, Wells Fargo responded to Plaintiff’s NOE.
On September 11, 2017, QLS recorded in Jackson County
another Notice of Default and Election to Sell Plaintiff’s
property in which it noted a sale of Plaintiff’s property
scheduled for October 16, 2017.
On October 4, 2017, Plaintiff filed an action in this Court
against Wells Fargo and QLS.

Plaintiff seeks declaratory

judgment that “none of the Defendants is in fact the beneficiary
of the Note and the actual beneficiary as defined under ORS
86.735, that the actual beneficiary of the Note has not been made
known to the Plaintiff and therefore the Defendants cannot
conduct a non-judicial sale on this property under ORS
§ 86.705 et seq.”

Compl. at ¶ 19.

Plaintiff also brings claims

for breach of contract, violation of 12 C.F.R. § 1024.36, and
violation of 12 C.F.R. § 1024.35.
6 - OPINION AND ORDER

On October 12, 2017, Plaintiff filed a Motion for Temporary
Restraining Order in which he sought an order barring the
nonjudicial foreclosure sale scheduled for October 16, 2017.
Defendants agreed to defer the foreclosure sale until after the
Court decided Plaintiff’s Motion.
On October 26, 2017, the Court held a hearing on Plaintiff’s
Motion for Temporary Restraining Order at which both Defendants
appeared.

On October 26, 2017, the Court entered an Order

granting Plaintiff’s Motion for Temporary Restraining Order,
directing the parties to engage in limited discovery, and setting
a preliminary-injunction hearing on January 3, 2018.
On December 4, 2017, Plaintiff filed a Motion for
Preliminary Injunction in which he sought an order barring the
nonjudicial foreclosure.
On January 3, 2018, the Court heard oral argument on
Plaintiff’s Motion for Preliminary Injunction.

The Court

directed the parties to file a joint Stipulated Supplement to the
Record related to Plaintiff’s assertions as to Wells Fargo’s
possession of the Note and Allonge to Note at the time QLS
initiated foreclosure proceedings.
On January 16, 2018, Wells Fargo filed the Declaration of
Meredith Deal in which she testified in pertinent part:
Wells Fargo currently has possession of the
original Note with the attached Allonge. Wells
Fargo came into possession on January 24, 2013 and
has maintained continuous possession from that
7 - OPINION AND ORDER

time, including December 31, 2015, when it
appointed Quality Loan Service Corporation of
Washington as the successor trustee of said Deed
of Trust, recorded on January 12, 2016 in the
Jackson County Official Records, No. 2016-000798.
Wells Fargo also had possession of the original
Note and Allonge when non judicial foreclosure
proceedings began in June 2017.
Deal Decl. at ¶ 5.
On February 6, 2018, the Court issued an Opinion and Order
denying Plaintiff’s Motion for Preliminary Injunction.
On November 6, 2018, Wells Fargo filed the pleading the
Court deems to be an Amended Motion for Summary Judgment.

On

November 8, 2018, QLS filed a Motion for Summary Judgment Joining
in Wells Fargo’s Motion for Summary Judgment.

On December 4,

2018, Plaintiff filed a Request for Judicial Notice.

On

December 14, 2018, Wells Fargo filed a Motion to Strike as part
of its Reply to its Motion for Summary Judgment.

Plaintiff did

not file a response to Wells Fargo’s Motion to Strike.
The Court took the parties’ Motions under advisement on
December 28, 2018.

REQUESTS FOR JUDICIAL NOTICE
Wells Fargo requests the Court to take judicial notice of
ten documents that are recorded in various county offices and
publicly available including, for example, the Trust Deed, the
Assignment of Trust Deed, the Notice of Default, and similar
documents.

Plaintiff does not object to Wells Fargo’s request

8 - OPINION AND ORDER

and relies on many of the same documents.
Plaintiff requests the Court to take judicial notice of page
595 of the United States Department of Housing and Urban
Development FHA Single Family Housing Policy Handbook
(III)(A)(2)(h)(xii) Face-to-Face Interviews.

Defendant does not

oppose Plaintiff’s Request other than to note that the web
address for the complete Policy Handbook provided in Plaintiff’s
Request for Judicial Notice is incorrect.

The correct address

is: https://www.hud.gov/sites/documents/40001HSGH.PDF.
I.

Standards
Federal Rule of Evidence 201 allows a court to take judicial

notice of facts that can be “accurately and readily determined
from sources whose accuracy cannot reasonably be questioned.”
Fed. R. Evid. 201(b)(2).

The court may take judicial notice of

documents that are matters of public record.

See MGIC Indem.

Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)(A district
court may take “judicial notice of matters of public record
outside the pleadings" when determining whether a complaint fails
to state a claim.).
II.

Parties’ Requests
The documents attached to Wells Fargo’s Request for Judicial

Notice and the HUD Handbook page attached to Plaintiff’s Request
are matters of public record and their accuracy is not reasonably
subject to debate.
9 - OPINION AND ORDER

Accordingly, the Court GRANTS Wells Fargo’s Request, GRANTS
Plaintiff’s Request, and takes judicial notice of the documents
attached to Wells Fargo’s Request as well as page 595 of the FHA
Single Family Housing Policy Handbook attached to Plaintiff’s
Request.

WELLS FARGO’S MOTION (#65) TO STRIKE
In its Reply to its Motion for Summary Judgment Wells Fargo
moves to strike ¶¶ 6-8 and Exhibits 5 and 6 to the Declarations
(#60-2, #63) of Jeffrey Long and the Amended Declaration (#68) of
Jeffrey Long in Opposition to Wells Fargo’s Motion for Summary
Judgment.4

The factual averments and exhibits involve events

that occurred after Plaintiff filed his Complaint on October 4,
2017.
Wells Fargo notes discovery in this matter closed on
September 20, 2018.

Defense counsel Barbara Bollero states in

her Declaration:
[T]he factual averments of Paragraphs 6 through 8
4

On November 30, 2017, Plaintiff filed the Declaration
(#60-2) of Jeffrey Long as an exhibit to its Response to Wells
Fargo’s Motion for Summary Judgment. On December 4, 2017,
Plaintiff filed the same Declaration of Jeffrey Long as a
separate document (#63). The November 30 and December 4
Declarations are the same. On December 14, 2017, after Wells
Fargo filed its Motion to Strike, Plaintiff filed an Amended
Declaration of Jeffrey Long (#68) that contains the same
statements and exhibits that Wells Fargo moves to strike in
documents #60-2 and #63. The Court, therefore, considers Wells
Fargo’s Motion to Strike as to all three Declarations.
10 - OPINION AND ORDER

of, and Exhibits 5 and 6 to, the Long Declaration
were not disclosed by Plaintiff in his discovery
responses, deposition testimony, or pleadings
. . . at any time before [Plaintiff] fil[ed] . . .
his summary judgment Response on November 30,
2018.
Second Suppl. Decl. of Barbara Bollero ¶ 5.

Bollero also

testifies in her Declaration that she conferred with Plaintiff’s
counsel Jeffrey Long about Wells Fargo’s intention to file a
Motion to Strike these items, and Long initially stated he would
amend his Declaration in light of the intended Motion to Strike.
In his Amended Declaration, however, Long made the same factual
averments and included the same exhibits that were at issue in
Wells Fargo’s Motion to Strike.
Plaintiff did not respond to Wells Fargo’s Motion to Strike.
The Court GRANTS Wells Fargo’s Motion to Strike on the
ground that Plaintiff failed to disclose to Wells Fargo the
factual averments contained in ¶¶ 6-8 and the documents attached
as Exhibits 5 and 6 to the Long Declarations before Plaintiff
filed his Response to Wells Fargo’s Motion for Summary Judgment.
The Court, therefore, STRIKES the factual averments of ¶¶ 6-8 and
Exhibits 5 and 6 to the Long Declarations and does not consider
those materials in reaching its decision on Defendants’ Motions
for Summary Judgment.

DEFENDANTS’ MOTIONS (#57, #59) FOR SUMMARY JUDGMENT

11 - OPINION AND ORDER

Defendants move for summary judgment as to all of
Plaintiff’s claims.
I.

Standard
Summary judgment is appropriate when “there is no genuine

dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Washington Mut. Ins. v. United

States, 636 F.3d 1207, 1216 (9th Cir. 2011).
Civ. P. 56(a).

See also Fed. R.

The moving party must show the absence of a

genuine dispute as to a material fact.
673 F.3d 1218, 1223 (9th Cir. 2012).

Emeldi v. Univ. of Or.,

In response to a properly

supported motion for summary judgment, the nonmoving party must
go beyond the pleadings and point to "specific facts
demonstrating the existence of genuine issues for trial."

In re

Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010)
"This burden is not a light one. . . .

The non-moving party must

do more than show there is some 'metaphysical doubt' as to the
material facts at issue."

Id. (citation omitted).

A dispute as to a material fact is genuine "if the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party."

Villiarimo v. Aloha Island Air, Inc., 281 F.3d

1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)).

The court must draw all

reasonable inferences in favor of the nonmoving party.
v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010).
12 - OPINION AND ORDER

Sluimer

"Summary

judgment cannot be granted where contrary inferences may be drawn
from the evidence as to material issues."

Easter v. Am. W. Fin.,

381 F.3d 948, 957 (9th Cir. 2004)(citing Sherman Oaks Med. Arts
Ctr., Ltd. v. Carpenters Local Union No. 1936, 680 F.2d 594, 598
(9th Cir. 1982)).
"A non-movant's bald assertions or a mere scintilla of
evidence in his favor are both insufficient to withstand summary
judgment."

F.T.C. v. Stefanchik, 559 F.3d 924, 929 (9th Cir.

2009)(citation omitted).

When the nonmoving party's claims are

factually implausible, that party must "come forward with more
persuasive evidence than otherwise would be necessary."

LVRC

Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)
(citing Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1149
(9th Cir. 1998)).
The substantive law governing a claim or a defense
determines whether a fact is material.

Miller v. Glenn Miller

Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006).

If the

resolution of a factual dispute would not affect the outcome of
the claim, the court may grant summary judgment.
II.

Plaintiff’s First Claim:

Id.

Declaratory Judgment

In his First Claim for Declaratory Judgment Plaintiff
asserts Defendants violated the Oregon Trust Deed Act (OTDA),
Oregon Revised Statutes §§ 86.705, et seq., with respect to the
Trust Deed and Note on the ground that MERS did not have the
13 - OPINION AND ORDER

authority to assign the beneficial interest under the Trust Deed,
and, therefore, all subsequent nonjudicial foreclosure
activities, including QLS’s attempted sale, are void.5
Defendants assert in their Motions that Wells Fargo is the
beneficiary of the Deed of Trust because under Oregon law when a
promissory note is transferred, the Deed of Trust also “transfers
by operation of law and the party entitled to payment under the
Note is the beneficiary notwithstanding the designation of MERS
as the beneficiary in the Deed of Trust.”

Romani v. NW Trustee

Svcs., No. 3:11–cv–0382–PA, 2013 WL 6530583, at *3 (D. Or.
Dec. 12, 2013).

Accordingly, Wells Fargo argues it had the

authority to appoint QLS as Successor Trustee, and QLS had the
authority to foreclose the property.
they did not violate the ODTA.

Thus, Defendants assert

Plaintiff did not address or

respond to Defendants’ assertions in his Response to Defendants’
Motions.
As this Court explained in its February 6, 2018, Opinion and
Order denying Plaintiff’s Motion for Preliminary Injunction, the
Oregon Supreme Court in Brandrup v. ReconTrust Co, 353 Or. 668
5

In Plaintiff’s Response to Defendants’ Motions for Summary
Judgment Plaintiff asserts he alleges in his First Claim that
“the loan is insured by the FHA and is subject to the preforeclosure requirement provided by the FHA . . . [that]
include[s] a face-to-face interview” that did not occur.
Plaintiff’s Complaint, however, contains that allegation only as
to his Second Claim for breach of contract. The Court,
therefore, addresses that allegation in its discussion of
Plaintiff’s Second Claim.
14 - OPINION AND ORDER

(2013), addressed whether MERS can be a beneficiary under the
ODTA and noted “[f]or the purposes of O.R.S. § 86.735(1), the
‘beneficiary’ is the lender to whom the obligation that the trust
deed secures is owed or the lender's successor in interest.”
Brandrup, 353 Or. at 673–74.

The Oregon Supreme Court concluded

MERS cannot be the beneficiary because it does not hold the
beneficial right to repayment of the obligation.

Id. at 693.

“For the purposes of the OTDA, the only pertinent interests in
the trust deed are the beneficial interest of the beneficiary and
the legal interest of the trustee.”

Id. at 675.

The Brandrup court also concluded “the person entitled to
repayment of the secured obligation also controls the foreclosure
process.”

Id. at 688.

“Because MERS does not have the right to

receive repayment of the notes in these cases, the OTDA does not
allow MERS to hold and transfer legal title to the trust deeds
that secure them.”
invalid.”

Id. at 705.

Id. at 707.

Thus, “[a]ny such transfers are

The Brandrup court, however, “also

re-affirmed the longstanding principal [sic] that when a
promissory note changes hands, the securing deed of trust follows
by operation of law.”

Romani, 2013 WL 6530583, at *3 (citing

Brandrup, 353 Or. at 694).

Thus, when a promissory note is

transferred, the Deed of Trust also “transfers by operation of
law and the party entitled to payment under the Note is the
beneficiary notwithstanding the designation of MERS as the
15 - OPINION AND ORDER

beneficiary in the Deed of Trust.”

Id.

In Romani the plaintiff’s Trust Deed identified MERS as the
beneficiary “solely as nominee for Lender and Lender's successors
and assigns.”

The Lender in the promissory note was Sunset

Mortgage, but Sunset subsequently transferred the Note “by
endorsement in blank to Wells Fargo Bank, N.A.”
at *1.

2013 WL 6530583,

Ultimately MERS transferred the Trust Deed to Wells

Fargo, and Wells Fargo began foreclosure on the plaintiff’s
property.

The plaintiff brought an action to rescind the trustee

sale alleging, among other things, that the designation of MERS
as beneficiary was invalid.

The district court reviewed the

Oregon Supreme Court’s holding in Brandrup and agreed MERS could
not hold or transfer legal title to the Trust Deed securing the
plaintiff’s mortgage.

The district court, however, also noted

Brandrup’s affirmation that “when a promissory note changes
hands, the securing deed of trust follows by operation of law.”
In Romani the record reflected
the Note was transferred by endorsement in blank
to Wells Fargo by the original lender[, the] Deed
of Trust . . . also transferred to Wells Fargo, by
operation of law. As the party entitled to
payment under the Note and Deed of Trust, Wells
Fargo was the beneficiary, notwithstanding the
designation of MERS as beneficiary in the Deed of
Trust.
2013 WL 6530583, at *3.

The district court, therefore, concluded

although
[a]ny purported assignments of the Deed of Trust
16 - OPINION AND ORDER

by MERS are legal nullities[,] Wells Fargo, as
holder of the Note, possessed the right to appoint
a successor trustee and to take all of the other
actions necessary to initiate the non-judicial
foreclosure. [Thus,] The involvement of MERS does
not invalidate the completed sale.
Id.
Here the record reflects USA Direct Funding transferred the
Note to Wells Fargo via the January 2, 2013, Allonge to Note.
According to Wells Fargo, therefore, it was the beneficiary of
the Trust Deed at all relevant times notwithstanding the
designation of MERS as beneficiary in the Deed of Trust.
Although as in Romani, the purported assignment of the Trust by
MERS is a “legal nullity,” the Court concludes Wells Fargo, as
holder of the Note, nevertheless possessed the right to appoint a
successor trustee and to take all actions necessary to initiate
the nonjudicial foreclosure.
In addition, as this Court noted in its February 6, 2018,
Opinion and Order, Wells Fargo has established it was in
possession of the Note and Allonge to Note at the time it
appointed QLS as the successor trustee and/or at the time QLS
initiated foreclosure proceedings, and, therefore, it was a
“person entitled to enforce [the Note]” pursuant to Oregon’s
Uniform Commercial Code.

Specifically, Oregon Revised Statutes

§ 73.0203(1) states "[a negotiable] instrument is transferred
when it is delivered . . . for the purpose of giving to the
person receiving delivery the right to enforce the instrument."
17 - OPINION AND ORDER

Emphasis added.

Oregon Revised Statutes § 73.02030(2) explains

"[t]ransfer of an instrument vests in the transferee any right of
the transferor to enforce the instrument, including any right as
a holder in due course."

Finally, Oregon Revised Statutes

§ 73.0301 defines a "person entitled to enforce an instrument" as
"the holder of the instrument, a nonholder in possession of the
instrument who has the rights of a holder, or a person not in
possession of the instrument who is entitled to enforce the
instrument.”

Thus, for example, in LNV Corp. v. Fauley the court

held
the fact that the trust deed and Note have taken
divergent paths is entirely inapposite. There is
no question that the Note has been transferred to
LNV by endorsement, and that LNV is in current
physical possession of the Note. Therefore, LNV
is the entity entitled to repayment of the [N]ote
obligation, and, in turn, LNV is the beneficiary
of the trust deed, irrespective of its “muddled”
chain of title.
178 F. Supp. 3d 1043, 1048 (D. Or. 2016)(emphasis added).
The Court, therefore, concludes on this record that the
purported assignment of the Trust Deed by MERS is a legal
nullity, but Wells Fargo, as holder of the Note, nevertheless
possessed the right to appoint a successor trustee and to take
all actions necessary to initiate the nonjudicial foreclosure.
Accordingly, the Court grants Defendants’ Motions for
Summary Judgment as to Plaintiff’s First Claim for Declaratory
Judgment for violation of the ODTA.
18 - OPINION AND ORDER

III. Plaintiff’s Second Claim:

Breach of Contract

In his Second Claim Plaintiff alleges Defendants breached
the Trust Deed and Note when they failed to meet a condition
precedent required for acceleration of the mortgage.
Specifically, Plaintiff asserts Defendants failed to arrange a
face-to-face interview with Plaintiff “before three full monthly
installments due on the mortgage [we]re unpaid”6 as required by
Housing and Urban Development (HUD) Regulation 24 C.F.R.
§ 203.604.

Plaintiff seeks damages on his Second Claim “in an

amount to be determined at trial but not to exceed $466,000.00.”
Defendants assert the face-to-face interview provision of
the HUD regulations is an affirmative defense rather than a
condition precedent required for acceleration of the mortgage;
Wells Fargo substantially complied with HUD interview
regulations; and even if Wells Fargo did not comply with the
interview regulations, Plaintiff has not established Wells
Fargo’s noncompliance caused Plaintiff’s damages.
“To state a claim for breach of contract, plaintiff must
allege the existence of a contract, ‘its relevant terms,
plaintiff's full performance and lack of breach and defendant's
breach resulting in damage to plaintiff.’”

Slover v. Or. Bd. of

Clinical Soc. Workers, 144 Or. App. 565, 570 (1996)(quoting

6

The parties do not dispute the relevant period is
August 11, 2014, through October 1, 2014.
19 - OPINION AND ORDER

Fleming v. Kids and Kin Head Start, 71 Or. App. 718, 721 (1985)).
A.

HUD regulations do not provide a private right of
action.
Courts that have addressed the issue have concluded

“the breach of [HUD servicing] regulations [such as 24 C.F.R.
§ 203.604] do[es] not ordinarily provide a private right of
action.”

Fowler v. Wells Fargo Bank, N.A., No. 3:2017cv02092,

2017 WL 3977385, at *4 (N.D. Cal. Sept. 11, 2017)(quotations
omitted).

Nevertheless, in Fowler the court concluded HUD

regulations “that are properly incorporated into a contract [may]
form the basis of a breach of contract claim.”

Id.

In Fowler

the plaintiff “identified the provision of the promissory note —
allegedly incorporating [the HUD regulations] — that Defendant
allegedly breached and her resulting damages.

The Court finds

that this is enough . . . to survive at the motion to dismiss
stage.”

Id.
Here the Note provides:
If Borrower defaults by failing to pay in full any
monthly payment, then Lender may, except as
limited by regulations of the Secretary in the
case of payment defaults, require immediate
payment in full of the principal balance remaining
due and all accrued interest. . . . This Note
does not authorize acceleration when not permitted
by HUD regulations.

Compl., Ex. 4 at 11 (emphasis added).

The Trust Deed provides:

In many circumstances regulations issued by the
Secretary [of HUD] will limit Lender’s rights, in
the case of payment defaults, to require immediate
payment in full and foreclose if not paid. This
20 - OPINION AND ORDER

Security instrument does not authorize
acceleration or foreclosure if not permitted by
regulations of the Secretary.
Compl., Ex. 4 at 8.

Although the Ninth Circuit has not addressed

the issue, many courts have concluded inclusion of these types of
provisions in Trust Deeds and Notes is sufficient to incorporate
HUD regulations into Trust Deeds and Notes for breach-of-contract
claims.

See, e.g., Fowler, 2017 WL 3977385, at *4 (finding the

plaintiff had established the trust deed and note incorporated
HUD regulations when they were referenced in the trust deed and
note); Wright v. Wells Fargo, No. 1:15-cv-02416-AT-JCF, 2015 WL
12159206, at *5 (N.D. Ga. Oct. 8, 2015)(same); Njema v. Wells
Fargo, 124 F. Supp. 3d 852, 864 (D. Minn. 2015)(same).

But see

Klein v. Wells Fargo, No. A-14-CA-861-SS, 2014 WL 5685113, at *6
(W.D. Tex. Nov. 4, 2014)(finding the plaintiff did not have a
private right of action “notwithstanding referenced HUD
regulations in the note and deed of trust.”).

This Court,

however, need not decide whether the reference to HUD regulations
in the Trust Deed and Note incorporate those regulations by
reference sufficiently to support Plaintiff’s claim for breach of
contract because the Court concludes Plaintiff has failed to
establish that Defendants’ alleged breach caused Plaintiff's
damages.
B.

HUD face-to-face interview regulations.
HUD regulation

21 - OPINION AND ORDER

24 C.F.R. § 203.604 provides in

pertinent part:
(b) The mortgagee must have a face-to-face
interview with the mortgagor, or make a reasonable
effort to arrange such a meeting, before three
full monthly installments due on the mortgage are
unpaid.
* * *
(d) A reasonable effort to arrange a face-to-face
meeting with the mortgagor shall consist at a
minimum of one letter sent to the mortgagor
certified by the Postal Service as having been
dispatched. Such a reasonable effort to arrange a
face-to-face meeting shall also include at least
one trip to see the mortgagor at the mortgaged
property.
The United States Department of Housing and Urban Development FHA
Single Family Housing Policy Handbook provides the following with
respect to face-to-face interviews:
(A) Standard
The Mortgagee must have a face-to-face interview
with the Borrower or make a reasonable effort to
arrange a face-to-face interview no later than the
61st Day of delinquency.
* * *
(2)Reasonable Effort in Arranging a
Face-to-Face Interview
The Mortgagee must send to the Borrower via
Certificate of Mailing or Certified Mail a
letter providing information on:
• the availability of face-to-face
interviews; and
• how to schedule the interview.
The Mortgagee must also attempt to contact
the Borrower at the mortgaged Property to
provide information on the availability of
face-to face interviews.
22 - OPINION AND ORDER

Pl.’s Req. for Judicial Notice, Ex. 1.
Plaintiff states in his Response to Defendants’ Motions
for Summary Judgment that Wells Fargo
made no attempt to arrange a face-to-face
interview. [It] did not send the Aazamis a
letter, certified or otherwise, providing
information on the availability of face-to-face
interviews and how to schedule the interview.
Wells Fargo did not attempt to contact the Aazamis
at the mortgaged property to provide information.
Pl.’s Response at 4.

The record, however, reflects Wells Fargo

sent the Aazamis a certified letter on June 23, 2014, in which it
advised them:
Your mortgage loan is in default. Please contact
us immediately to discuss your situation. We
would like to meet with you to review your
financial situation and determine possible options
to assist you in bringing your loan current.
Please call us at 1-800-416-1472 to set up a time
to discuss your financial situation.
Joint Statement of Agreed Facts, Ex. C.

As noted, the Aazamis

signed a certified mail return-receipt on June 30, 2014,
indicating they had received Wells Fargo’s June 23, 2014, letter.
Although the record does not reflect the Aazamis attempted to set
up a face-to-face meeting with Wells Fargo after receiving the
June 23, 2014, letter, the record shows Wells Fargo and Aletia
Aazami spoke by telephone at least three times concerning the
loan between August 22, 2014, and September 10, 2014, and that
Wells Fargo left at least seven telephone messages during that
same period requesting the Aazamis to return its call.
23 - OPINION AND ORDER

Decl. of

Wells Fargo Bank at ¶ 31 and Ex. Z.

In addition, Wells Fargo

also provided to the Aazamis information about workout options,
different payment plans, and an FHA Home Affordable Modification
Program (HAMP) trial plan.
Courts that have addressed the face-to-face interview
requirement of § 203.604(d) have concluded letters such as those
sent by Wells Fargo on June 23, 2014, satisfy the certifiedletter provision of that regulation.

See, e.g., Campbell v.

Wells Fargo Bank, N.A., No. 1:14-CV-03341-TWT-JFK, 2016 WL
6496458, at *8 (N.D. Ga. Oct. 6, 2016); Franklin v. BAC Home
Loans Servicing, LP No. 3:10-CV-1174-M, 2012 WL 2679496, at *5
(N.D. Texas June 6, 2012).

Adopting the reasoning of these

courts, this Court finds Wells Fargo’s June 23, 2014, letter
complies with the certified-letter provision of § 203.604(d).
It is undisputed, however, that Wells Fargo did not
make a trip to the property to see the Aazamis, and, therefore,
Wells Fargo was not in strict compliance with the provisions in
§ 203.604(d) that requires “at least one trip to see the
mortgagor at the mortgaged property.”

Nevertheless, Wells Fargo

asserts it substantially complied with the face-to-face interview
provision of § 203.604(d) through its other contacts with the
Aazamis.

In support of its assertion Wells Fargo relies on

Campbell, Franklin, and Dan-Harry v. PNC Bank, N.A., No. 17136WES, 2018 WL 5044235 (D.R.I. Oct. 17, 2018).
24 - OPINION AND ORDER

In those cases

the mortgagee or its agent made a trip to the mortgaged property
in an effort to arrange a face-to-face meeting, and the courts
concluded only substantial compliance with § 203.604(d) was
required.
This Court, however, need not decide whether
substantial or strict compliance with § 203.604 is required or
whether under these circumstances Wells Fargo substantially
complied with § 203.604 because the Court concludes, as discussed
below, that Plaintiff has not established that Defendants’
failure to arrange a face-to-face interview after Plaintiff
defaulted on his mortgage caused Plaintiff to suffer his alleged
damages.
C.

Plaintiff has not established Defendants’ alleged
breach caused Plaintiff’s damages.
In his Complaint Plaintiff alleges Defendants’ breach

of the Note by way of their failure to comply with § 203.604
caused Plaintiff to suffer $466,000 in damages.

Although it is

not clear how Plaintiff calculated his alleged damages, it
appears that sum may be the full amount that Plaintiff owed on
his mortgage, which included unpaid principal, interest fees, and
charges as of May 2017.

Plaintiff does not point to any evidence

that Defendants’ failure to arrange or to try to arrange a faceto-face meeting was the cause of Plaintiff’s default or failure
to pay his mortgage after August 2014 because, among other
things, Plaintiff does not allege he would have been able to cure
25 - OPINION AND ORDER

his default at any relevant time.
Courts have held the plaintiffs in similar
circumstances failed to support their breach-of-contract claims.
For example, in Njema the plaintiff defaulted on his mortgage,
and the defendant foreclosed on the mortgage.

The plaintiff

brought a breach-of-contract claim against the defendant on the
ground that the defendant breached HUD Regulation 24 C.F.R.
§ 203.604, which the plaintiff asserted was incorporated by
reference in his Note and Trust Deed.

The court, however,

concluded the plaintiff failed to prove that he suffered damages
as a result of the defendant’s failure to conduct a face-to-face
meeting.

The court rejected the plaintiff’s assertion that the

harm he suffered was caused by the foreclosure, and the court
pointed out that the evidence established “the foreclosure was
due to [the plaintiff’s] default on [his] . . . mortgage loan.”
124 F. Supp. 3d at 866.

The court also rejected the plaintiff’s

assertion that the plaintiff would have received a loan
modification and avoided foreclosure if a face-to-face meeting
had occurred.

The court noted that argument was “completely

speculative and, frankly, irrelevant.”

Id.

Similarly, in Wright the plaintiff defaulted on her
mortgage, and the defendant began foreclosure proceedings.

The

plaintiff filed an action alleging, among other things, a claim
for breach of contract based on the defendant’s alleged failure
26 - OPINION AND ORDER

to have a face-to-face meeting as required by 24 C.F.R.
§ 203.604.

The defendant filed a motion to dismiss the

plaintiff’s breach-of-contract claim.

Although the court

concluded the plaintiff had established the note and trust deed
incorporated the HUD regulations and that the defendant breached
the regulations incorporated in the note and trust deed when it
failed to conduct a face-to-face meeting before initiating
foreclosure proceedings, the court granted the defendant’s motion
to dismiss on the ground that the plaintiff failed to plead
damages that resulted from the defendant’s alleged violation.
2015 WL 12159206, at *5.

Specifically, the plaintiff asserted

she suffered damages as a result of the defendant’s breach
because the defendant reported the plaintiff’s default to various
credit agencies, which resulted in the plaintiff receiving a
lower credit score and “blocked Plaintiff from obtaining credit.”
Id., at *6.

The court, nevertheless, concluded these allegations

did not “plausibly show” the defendant’s failure to conduct a
face-to-face meeting caused her damages because “the alleged
damages to Plaintiff’s credit and reputation were caused by her
own undisputed failure to make loan payments, not the alleged
actions of [the defendant].”

Id.

See also Rourk v. Bank of N.

Am. Nat. Ass’n, No. 4:12–CV–42 (CDL), 2013 WL 5595964, at *6
(M.D. Ga. Oct. 11, 2013)(“Even if Defendant had not substantially
complied with [§203.604], it was Plaintiff's failure to tender a
27 - OPINION AND ORDER

single payment for nearly two years that caused her default
status and the foreclosure.

Therefore, even if Plaintiff had

demonstrated that Defendant failed to make a reasonable effort to
arrange a face-to-face meeting with her, she has not established
that such a failure caused her any damages.”).
On this record the Court concludes Plaintiff has failed
to establish that Defendants’ alleged failure to comply with 24
C.F.R. § 203.604 caused Plaintiff to suffer damages.

The Court,

therefore, grants Defendants’ Motions for Summary Judgment as to
Plaintiff’s Second Claim for breach of contract.
IV.

Plaintiff’s Third Claim:

Violation of 12 C.F.R. § 1024.36

In his Third Claim Plaintiff asserts Wells Fargo
fail[ed] to provide all of the information
requested by and through [Plaintiff’s] third RFI,
or to alternatively provide an appropriate basis
pursuant to 12 C.F.R. § 1024.36(f)(1), by and
through the response to such, constitutes a clear,
distinct and separate violation of 12 C.F.R.
§ 1024.36. Wells Fargo’s actions are considered
to be part of a pattern and practice of behavior
in violation of Plaintiff’s rights.
Compl. at ¶ 29.
Defendants move for summary judgment on the grounds that
Plaintiff failed to set out with specificity the alleged
insufficiency of Wells Fargo’s response to Plaintiff’s third RFI,
Wells Fargo fully and timely responded to Plaintiff’s third RFI,
and Plaintiff has not established he suffered damages as a result
of Wells Fargo’s alleged failure to respond sufficiently to
28 - OPINION AND ORDER

Plaintiff’s third RFI.
A.

RESPA and Regulation X requirements
The Real Estate Settlement Procedures Act (RESPA), 12

U.S.C. § 2601, et seq., provides borrowers may inquire about
mortgages by making a “qualified written request” (QWR) defined
as:
[A] written correspondence . . . that —
(i) includes, or otherwise enables the servicer to
identify, the name and account of the borrower;
and
(ii) 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.
12 U.S.C. § 2605(e)(1)(A).

To constitute a QWR under RESPA

a borrower’s request must: (1) reasonably
identify the borrower’s name and account,
(2) state the borrower’s “reasons for the belief
. . . that the account is in error” or “provide
sufficient detail to the servicer regarding other
information sought by the borrower,” and (3) seek
“information relating to the servicing of (the)
loan.”
Diffely v. Nationstar Mortg., LLC, No. C17-1370 RSM, 2018 WL
1737780, at *6 (W.D. Wash. Apr. 11, 2018)(quoting 12 U.S.C.
§ 2605(e)(1)(B))(emphasis in Diffely).

When a qualified QWR

requests mortgage-loan servicing, it is referred to as a request
for information (RFI).

12 C.F.R. § 1024.36(a).

RESPA defines servicing as “receiving any scheduled
periodic payments from a borrower pursuant to the terms of any
29 - OPINION AND ORDER

loan . . . and making the payments of principal and interest and
such other payments with respect to the amounts received from the
borrower.”

12 U.S.C. § 2605(i)(3).

Servicing “does not include

the transactions and circumstances surrounding a loan’s
origination – facts that would be relevant to a challenge to the
validity of an underlying debt or the terms of a loan agreement.
Such events precede the servicer’s role in receiving the
borrower’s payments and making payments to the borrower’s
creditors.”

Medrano v. Flagstar Bank, FSB, 704 F. 3d 661, 666-67

(9th Cir. 2012).

In Medrano the Ninth Circuit upheld dismissal

of the plaintiff’s RESPA claim when the letters from the
plaintiff to the loan servicer asserted the loan documents did
not “accurately reflect the proper payment schedule represented
by the loan broker.”

Id. at 667.

The Ninth Circuit found the

servicer did not have any duty to respond to the request.

Id.

Accordingly, courts have concluded RFIs “relating to the original
loan transaction and its subsequent history” do not qualify as
QWRs under RESPA.

Junod v. Dream House Mortg. Co., No. CV 11-

7035-ODW(VBKx), 2012 WL 94355, at *4 (C.D. Cal. Jan. 5, 2012).
See also Consumer Solutions REO, LLC v. Hillery, 658 F. Supp. 2d
1002, 1014 (N.D. Cal. 2009)(dismissing the plaintiff’s RESPA
claim with prejudice and noting the requirement “[t]hat a QWR
must address the servicing of the loan, and not its validity, is
borne out by the fact that § 2605(e) expressly imposes a duty
30 - OPINION AND ORDER

upon the loan servicer, and not the owner of the loan.”).

Courts

have also held requests for information concerning specific
sections of pooling and servicing agreements do not “relate to
‘servicing’ of the loan, and [are] not subject to the RESPA
requirements.”

Watson v. Bank of Am., N.A., No. 16CV513-

GPC(MDD), 2016 WL 6581846, at *6 (S.D. Cal. Nov. 7, 2016).

Other

courts have concluded borrower’s requests relating to loan
modification are not related to “servicing” of the loan.

See,

e.g., Smallwood v. Bank of America, N.A., No. 15cv336, 2015 WL
7736876, at *6 (S.D. Ohio, Dec. 1, 2015); Mbakpuo v. Civil Wells
Fargo Bank, N.A., No. 13-2213, 2015 WL 4485504, at *8 (D. Md.
July 21, 2015)(request for a loan modification did not relate to
servicing of a loan); Mayer v. EMC Morg. Corp., No 2:11-cv-147,
2014 WL 1607443, at *5-6 (N.D. Ind. April 22, 2014)(same); Van
Egmond v. Wells Fargo Home Mortg., No. 12-0112, 2012 WL 1033281,
at *4 (C.D. Cal. Mar. 21, 2012)(holding RESPA only obligates loan
servicers to respond to borrowers' requests for information
relating to servicing of their loans, which does not include
loan-modification information); Mobine v. OneWest Bank, FSB,
11cv2550-IEG(BGS), 2012 WL 1520116, at *2 (S.D. Cal. Apr. 27,
2012)(same).
When a servicer receives a qualified RFI from a
borrower, the servicer must provide a written response
acknowledging receipt of the RFI within five days.
31 - OPINION AND ORDER

12 U.S.C.

§ 2605(e)(1); 12 C.F.R. § 1024.36(c).

RESPA and Regulation X

require a servicer to respond to an RFI for the identity and
address or other relevant contact information for the owner
assignee of a mortgage loan within 10 days of receipt.
§ 1024.36(d)(2)(i)(A); 12 U.S.C. § 2605(k)(1)(D).

12 C.F.R.

The servicer

must respond to RFIs seeking other information within 30 days of
receipt.

12 U.S.C. § 2605(e)(2); 12 C.F.R. § 1024.36(d).
When the servicer receives a QWR as defined in

Regulation X, it must make corrections to the borrower’s account
or conduct an investigation, provide the borrower with a written
explanation, and provide the contact information of someone who
can assist the borrower.

12 U.S.C. §§ 2605(e)(2)(A)-(C).

When a

borrower believes the servicer’s response to the QWR is
inadequate, the borrower “must provide facts to provide [the
servicer with] notice as to why its response was not complete.”
Watson, 2016 WL 6581846, at *7.

A “general statement that [the

servicer] failed to provide the requested information does not
state a claim for violation of Regulation X.”

Id.

See also

Norris v. Bayview Loan Serv., LLC, No. CV15-643-MWF(DTBx), 2016
WL 337381, at *5 (C.D. Cal. 2016)(catchall assertion that the
defendant did not “provide accurate and complete responses” was
insufficient to state a claim under Rule 8); Saterbak v. Nat'l
Default Serv. Corp., No. 15cv956-WQH-NLS, 2015 WL 5794560, at *19
(S.D. Cal. 2015)(the plaintiffs’ allegations were not sufficient
32 - OPINION AND ORDER

when the plaintiffs alleged information provided by the servicer
was “inadequate and incorrect” without providing facts to support
that statement).
B.

Plaintiffs Third RFI
As noted, in his Third Claim Plaintiff asserts Wells

Fargo “fail[ed] to provide all of the information requested by
and through [Plaintiff’s] third RFI, or to alternatively provide
an appropriate basis” to decline to provide the information
sought by Plaintiff.
In his Third RFI Plaintiff sought the following
information from Wells Fargo:
1.

An exact reproduction of the life of loan
mortgage transactional history for this loan
from the contract system of record from your
electronic software program for this loan.
For purposes of identification, the life of
loan transactional history means any software
program or system by which the servicer
records the current mortgage balance, the
receipt of all payments, the assessment of
any late fees or charges, and the recording
of any corporate advances for any fees or
charges including but not limited to property
inspection fees, broker price opinion fees,
legal fees, escrow fees, processing fees,
technology fees, or any other collateral
charge. Also to the extent, this life of
loan transactional history includes numeric
or alpha-numeric codes, please attach a
complete list of all such codes and state in
plain English a short description for each
such code.

2.

Copies of any and all servicing notes related
to your servicing of the above referenced
mortgage loan for the past two (2) calendar
years.

33 - OPINION AND ORDER

3.

Copies of any and all broker’s price opinions
you performed or otherwise obtained for the
above referenced property in relation to the
above referenced mortgage loan.

4.

The physical location of the original note
related to the above-referenced mortgage
loan.

5.

A true and accurate copy of the original note
related to the above referenced mortgage'
loan.

6.

The identity, address, and other relevant
contact information for the custodian of the
collateral file containing the original
collateral documents for the above referenced
mortgage loan, including, but not limited to
the original note.

7.

A detailed copy of your last two (2) analyses
of the escrow account of the mortgage.

8.

Please state each and every date during the
time period from January 10, 2014, to the
present on which you received a complete loss
mitigation application from the abovereferenced borrower. Please note that,
pursuant to 12 C.F.R. § 1024.41(b)(1), a
"complete loss mitigation application” is
defined as "an application in connection with
which a servicer has received all the
information that the servicer requires from a
borrower in evaluating applications for the
loss mitigation options available to the
borrower."

Joint Statement of Agreed Facts, Ex. M at 1-2.

On May 24, 2017,

Wells Fargo responded to Plaintiff’s Third RFI and provided
Plaintiff with information about the current status of the loan;
information about the origination of the loan; loan-servicer
information; and copies of the Trust Deed, Assignments of the
Trust Deed, the Promissory Note, the Allonge to the Promissory
34 - OPINION AND ORDER

Note, the loan information report, and Plaintiff’s various RFIs.
C.

Analysis
Wells Fargo states in its Motion for Summary Judgment

that its May 24, 2017, response fully complied with the
requirements of RESPA and Regulation X because it provided all of
the information requested by Plaintiff that was a QWR within the
meaning of RESPA and Regulation X.

Specifically, Wells Fargo

notes it did not respond to Plaintiff’s requests for “physical
location of the original note,” the “custodian of the collateral
file containing the original collateral documents,” and “all
broker’s price opinions” because this information is “designed to
challenge the validity of the loan itself and/or the owner’s
obligations, not whether the loan account is accurate,” and,
therefore, Plaintiff’s requests for that information is not a QWR
within the meaning of RESPA and Regulation X.

In his Response

Plaintiff does not address Wells Fargo’s contentions as to
Plaintiff’s Third Claim.
As noted, a QWR that requests mortgage-loan servicing
information is an RFI.

12 C.F.R. § 1024.36(a).

The Ninth

Circuit, however, has held servicing “does not include the
transactions and circumstances surrounding a loan’s origination –
facts that would be relevant to a challenge to the validity of an
underlying debt or the terms of a loan agreement.

Such events

precede the servicer’s role in receiving the borrower’s payments
35 - OPINION AND ORDER

and making payments to the borrower’s creditors.”
F. 3d at 666-67.

Medrano, 704

District courts in the Ninth Circuit,

therefore, have concluded RFIs “relating to the original loan
transaction and its subsequent history” do not qualify as QWRs
under RESPA.

Junod, 2012 WL 94355, at *4.

See also Watson, 2016

WL 6581846, at *6 (“Other documents such as the investor
information, the current property value, a copy of the broker’s
price option, automated valuation, or appraisal do not relate to
servicing but to loan origination and do not state a claim under
12 C.F.R. § 1024.36.”); Consumer Solutions, 658 F. Supp. 2d at
1014 (dismissing the plaintiff’s RESPA claim with prejudice
noting the requirement “[t]hat a QWR must address the servicing
of the loan, and not its validity, is borne out by the fact that
§ 2605(e) expressly imposes a duty upon the loan servicer, and
not the owner of the loan.”).

Other courts have concluded

borrower’s requests relating to loan modification are not related
to “servicing” of the loan.

See, e.g., Smallwood, 2015 WL

7736876, at *6; Mbakpuo, 2015 WL 4485504, at *8 (request for a
loan modification did not relate to servicing of a loan); Mayer,
2014 WL 1607443, at *5-6 (same); Van Egmond, 2012 WL 1033281, at
*4 (holding RESPA only obligates loan servicers to respond to
borrowers' requests for information relating to servicing of
their loans, which does not include loan modification
information); Mobine, 2012 WL 1520116, at *2 (same).
36 - OPINION AND ORDER

On this record the Court concludes Wells Fargo
sufficiently responded to Plaintiff’s Third RFI and complied with
the requirements of RESPA and Regulation X.

Accordingly, the

Court grants Defendants’ Motions for Summary Judgment as to
Plaintiff’s Third Claim.
V.

Plaintiff’s Fourth Claim:

Violation of 12 C.F.R. § 1024.35

In his Fourth Claim Plaintiff asserts Wells Fargo failed to
respond adequately to a Notice of Error (NOE) that Plaintiff sent
Wells Fargo on July 19, 2017, regarding Wells Fargo’s allegedly
insufficient response to Plaintiff’s Third RFI in violation of 12
C.F.R. § 1024.35(e)(1).
A.

NOE Requirements
12 C.F.R. § 1024.35(a) provides in relevant part:

“A

servicer shall comply with the requirements of this section for
any written notice from the borrower that asserts an error.”

12

C.F.R. 1024.35(b) sets out eleven “categories of covered errors”
to which § 1024.35 applies.

12 C.F.R. § 1024.35(e)(1)(i)

requires a servicer to respond to a NOE by either:
(A) Correcting the error or errors identified by
the borrower and providing the borrower with a
written notification of the correction, the
effective date of the correction, and contact
information, including a telephone number, for
further assistance; or
(B) Conducting a reasonable investigation and
providing the borrower with a written notification
that includes a statement that the servicer has
determined that no error occurred, a statement of
the reason or reasons for this determination, a
37 - OPINION AND ORDER

statement of the borrower's right to request
documents relied upon by the servicer in reaching
its determination, information regarding how the
borrower can request such documents, and contact
information, including a telephone number, for
further assistance.
12 C.F.R. § 1024.35(e)(1)(ii) provides:
If during a reasonable investigation of a notice
of error, a servicer concludes that errors
occurred other than, or in addition to, the error
or errors alleged by the borrower, the servicer
shall correct all such additional errors and
provide the borrower with a written notification
that describes the errors the servicer identified,
the action taken to correct the errors, the
effective date of the correction, and contact
information, including a telephone number, for
further assistance.
B.

Analysis
Plaintiff relies on § 1024.35(b)(11) to support his

Fourth Claim.

Section 1024.35(b)(11) requires a servicer to

respond to a borrower’s notice of “[a]ny other error relating to
the servicing of a borrower’s mortgage loan.”

Specifically,

Plaintiff alleges Wells Fargo violated § 1024.35(b)(11) when it
“refused to correct its error regarding Plaintiff’s [RFI] for
servicing notes, broker price opinions, escrow analysis, and
receipt date for [Plaintiff’s] loan modification applications.”
Pl.’s Resp. at 15.
The Court has already concluded in the context of
Plaintiff’s Third Claim that Plaintiff’s requests for broker
price opinions and information on his loan-modification
applications were not QWR/RFIs within the meaning of RESPA and
38 - OPINION AND ORDER

Regulation X because they are not information about loan
servicing.

Wells Fargo, therefore, was not required to provide

those materials to Plaintiff.

Thus, Wells Fargo’s failure to

provide Plaintiff with broker price opinions is not a violation
of § 1024.35.

Moreover, although Wells Fargo was not required to

do so under § 1024.35, Wells Fargo provided Plaintiff with the
dates that it received each of Plaintiff’s completed loanmodification applications in its August 3, 2017, NOE response
letter to Plaintiff.
In addition, the record reflects Wells Fargo conducted
an investigation of Plaintiff’s account, provided Plaintiff with
two years of servicing notes and escrow analysis, and provided an
explanation of the reasons it believed Plaintiff’s account was
correct in its August 3, 2017, NOE response letter to Plaintiff.
The Court, therefore, concludes Wells Fargo has established it
complied with 12 C.F.R. § 1024.35.
Accordingly, the Court grants Defendants’ Motions for
Summary Judgment as to Plaintiff’s Fourth Claim.

CONCLUSION
For these reasons, the Court GRANTS Wells Fargo’s Request
(#44) for Judicial Notice, GRANTS Plaintiff’s Request (#62) for
Judicial Notice, GRANTS Wells Fargo’s Motion (#65) to Strike,
GRANTS Wells Fargo’s Amended Motion (#57) for Summary Judgment,
39 - OPINION AND ORDER

and GRANTS QLS’s Motion (#59) for Summary Judgment.
IT IS SO ORDERED.
DATED this 22nd day of January, 2019.
/s/ Anna J. Brown
ANNA J. BROWN
United States Senior District Judge

40 - OPINION AND ORDER