Hanson et al v. Amerihome Mortgage Company, LLC et al

Filing 42

MEMORANDUM OPINION AND ORDER granting 29 MOTION by Amerihome Mortgage Company, LLC for Summary Judgment; and DIRECTS the Clerk to remove this case from the Court's docket. Signed by Judge Thomas E. Johnston on 11/13/2018. (cc: counsel of record; any unrepresented party) (taq)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION

AMANDA HANSON, et al.,
Plaintiffs,
v.

CIVIL ACTION NO. 2:17-cv-03691

AMERIHOME MORTGAGE COMPANY, LLC, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Amerihome Mortgage Company, LLC’s
(“Amerihome”) motion for summary judgment. (ECF No. 29.) For the reasons discussed herein,
the Court GRANTS Amerihome’s motion. (ECF No. 29.)
I.

BACKGROUND

This case arises out of a dispute between Plaintiffs, Amanda and Nicholas Hanson (“the
Hansons”), and their loan servicer, Amerihome, regarding Amerihome’s institution of foreclosure
proceedings on the Hansons’ home. (See ECF No. 1-1.) The home was ultimately not foreclosed
upon. (ECF No. 30 at 1.) The complete factual background of this case is set forth in detail in
this Court’s Memorandum Opinion and Order on Amerihome’s motion to dismiss. (See ECF No.
13.) Thus, that discussion need not be repeated here.
In their Complaint, the Hansons allege claims for violations of the West Virginia Consumer
Credit and Protection Act (“WVCCPA”) (Count I), breach of contract (Count II), and tortious
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interference with a contract (Count III). (See id.) On December 28, 2017, this Court granted in
part Amerihome’s motion to dismiss and dismissed all counts in the Hansons’ Complaint except
Count I insofar as it alleges that Amerihome violated the WVCCPA by representing to the
Hansons’ that the loss mitigation process was ongoing while continuing to pursue foreclosure and
insofar as it alleges that Amerihome failed to advise the Hansons of their right to appeal a denial
of assistance. (See ECF No. 13 at 10.)
On August 21, 2018, Amerihome filed the present motion for summary judgment. (ECF
No. 29.) The Hansons timely responded to the motion, (ECF No. 33), and Amerihome timely
replied. (ECF No. 34.) As such, the motion is fully briefed and ripe for adjudication.
II.

LEGAL STANDARD

Rule 56 of the Federal Rules of Civil Procedure governs motions for summary judgment.
This rule provides, in relevant part, that summary judgment should be granted if “there is no
genuine issue as to any material fact.” Summary judgment is inappropriate, however, if there
exist factual issues that reasonably may be resolved in favor of either party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986). “Facts are ‘material’ when they might affect the outcome
of the case, and a ‘genuine issue’ exists when the evidence would allow a reasonable jury to return
a verdict for the nonmoving party.” News & Observer Publ. Co. v. Raleigh–Durham Airport
Auth., 597 F.3d 570, 576 (4th Cir. 2010). When evaluating such factual issues, the Court must
view the evidence “in the light most favorable to the opposing party.” Adickes v. S. H. Kress &
Co., 398 U.S. 144, 157 (1970).
The moving party may meet its burden of showing that no genuine issue of fact exists by
use of “depositions, answers to interrogatories, answers to requests for admission, and various

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documents submitted under request for production.” Barwick v. Celotex Corp., 736 F.2d 946,
958 (4th Cir. 1984). Once the moving party demonstrates such a lack of evidence, the nonmoving party must go beyond the pleadings and make a sufficient showing of facts presenting a
genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see also Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986). Accordingly, summary
judgment will generally be granted unless a reasonable jury could render a verdict for the nonmoving party on the evidence presented. Anderson, 477 U.S. at 247–48.
III.

DISCUSSION

Amerihome requests summary judgment on the remaining count of the Hansons’
Complaint which, as stated above, alleges that Amerihome violated the WVCCPA by continuing
the foreclosure process while representing to the Hansons that loss mitigation was ongoing and by
failing to advise the Hansons on their right to appeal a wrongful denial of assistance. (See ECF
No. 30 at 1–3.) The Court will address these allegations separately.
A.

Claim Regarding Amerihome’s Alleged Misrepresentations
In Count I of their Complaint, the Hansons allege that Amerihome violated § 46A-2-128

of the WVCCPA by “[d]irecting its appointed trustee to proceed with scheduling a foreclosure sale
despite representing to [the Hansons] that the loss mitigation process was ongoing . . . .” (ECF
No. 1-1 at ¶ 21(a).) Amerihome argues that it did not violate this section because the evidentiary
record clearly shows that Amerihome repeatedly informed the Hansons that the foreclosure
process would continue until Amerihome received a completed loss mitigation application, which
Amerihome never received. (See ECF No. 30 at 6.) Further, Amerihome argues that it was not

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required under federal law to stop foreclosure proceedings until a completed loss mitigation
application was submitted. (See ECF No. 30 at 7.)
Section 46A-2-128 of the WVCCPA provides that “[n]o debt collector may use unfair or
unconscionable means to collect or attempt to collect any claim.” W. Va. Code § 46A-2-128.
The statute further provides specific examples of conduct that is deemed to be in violation of this
section, but states that these examples do not limit the general application of this section. Id.
Further, this Court previously noted that this section applies to the loan modification process and
the foreclosure process. (See ECF No. 13 at 9–10 (citing Pannell v. Green Tree Servicing, No.
5:14-cv-14198, 2014 WL 3361984, at *7 (S.D. W. Va. July 8, 2014)).)
Here, the Hansons do not direct the Court to one of the specified violations, but instead
rely on the general applicability of the section which precludes the use of “unreasonable or
unconscionable means” to collect a debt. The Hansons’ claim is that Amerihome misrepresented
that foreclosure proceedings would be stalled pending a determination on the Hansons’ loss
mitigation application. (See ECF No. 33 at 6–7.) However, in letters dated between April 11,
2016 and March 24, 2017 Amerihome explicitly states that the foreclosure process would continue
until Amerihome received a completed loss mitigation application.

(See ECF No. 29-6.)

Additionally, during his deposition, Nicholas Hanson testified that it was his understanding that
the foreclosure process would not be stopped until Amerihome received the completed loss
mitigation application. (ECF No. 29-8 at 20–21, 53 (Nicholas Hanson Dep.).) As discussed
more fully below, the evidentiary record shows that Amerihome never received a completed loss
mitigation application. The Hansons were repeatedly informed of this fact. As Amerihome was
clear that foreclosure would continue until the loss mitigation application was complete, the Court
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cannot find that Amerihome made misrepresentations regarding the stay of foreclosure during the
loss mitigation process.
As part of the loss mitigation application, Amerihome requested that the Hansons submit
a complete, signed copy of the Uniform Borrowers Assistance Form (“UBAF”), current paystubs,
and a hardship letter signed by both borrowers. (ECF No. 30 at 4.) In letters dated between
December 6, 2016 and January 30, 2017, Amerihome informed the Hansons that information was
missing from their application, and, thus, their loss mitigation application would be deemed
incomplete pending the receipt of this information. (See ECF No. 29-5.) The Hansons submitted
some of this information, but, at the very least, the record shows the Hansons did not submit the
requested hardship letter. (See ECF No. 33 at 7.)
In response to Amerihome’s motion, the Hansons first assert that they submitted the UBAF,
“hardship information”, and the required paystubs by Amerihome’s requested deadline of
February 15, 2017. (See ECF No. 33 at 7.) In support of their assertion, the Hansons attached
the completed UBAF to their response which appears to include a hardship section, (see ECF No.
33-3 at 5–6), Nicholas Hansons’ paystubs, and Amanda Hansons’ paystubs.

However, the

Hansons have not submitted any evidence showing that they submitted a hardship letter despite
several letters requesting they do so. (See, e.g., ECF No. 29-6 at 25, 27.). In fact, the letter that
the Hansons attach as evidence to show that the Hansons complied with Amerihome’s request to
submit Amanda Hansons’ paystubs, also contains a request for a hardship letter from the Hansons.
(See ECF No. 33-5 at 1.) Further, in a telephone call on February 15, 2017, an Amerihome

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representative informed Nicholas Hansons that he needed to submit a separate hardship letter.1
(See ECF No. 34-1 at 4:34-:51, 7:05; 9:30-:32.)
The Hansons next assert that the hardship letter was not required pursuant to Amerihome’s
UBAF form which states that no additional documentation is required when the borrower indicates
that his or her hardship is because of unemployment. (ECF No. 33 at 7.) However, as part of
the UBAF form, the borrower signs a statement acknowledging that the “[s]ervicer, owner or
guarantor of the [borrower’s] mortgage, their agent(s), or any authorized third party” may require
the borrower to provide additional documentation. (See ECF No. 33-2 at 10.) The borrower
further agrees to provide all requested documents. (See id.) Therefore, despite what the Hansons
may have mistakenly believed regarding the hardship letter requirement, in signing the UBAF, the
Hansons agreed to provide any requested additional documents even if the document was not
initially required. Amerihome clearly requested this additional hardship letter; yet, the Hansons
never provided it. Thus, although the Court acknowledges that this may have been a difficult
process, the undisputed evidence shows that the Hansons did not submit a completed loss
mitigation application. See, e.g., 12 C.F.R. § 1024.41(b)(1) (defining a completed loss mitigation
application 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.”)

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The Hansons assert that, based on the internal account notes regarding the February 15, 2017 call, Amerihome
represented to the Hansons that Amerihome had received the missing documents and that foreclosure would not
continue during review of the application. (See ECF No. 33 at 7–8.) However, a review of the call reveals that at
several points during the call, Amerihome’s representative clearly states that the foreclosure process was ongoing
because the loss mitigation application incomplete. (ECF No. 34-1 at 3:50–4:11; 15:21–:40.)

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The Hansons further argue that federal law required Amerihome to stop foreclosure
proceedings while considering the Hansons loss mitigation application. 2 (Id. at 8.) However,
pursuant to federal regulations, Amerihome was not required to stop foreclosure proceedings until
Amerihome received a complete loss mitigation application. See 12 C.F.R. § 1024.41(g) (“If a
borrower submits a complete loss mitigation application after a servicer has made the first notice
or filing required by applicable law for any judicial or non-judicial foreclosure process but more
than 37 days before a foreclosure sale, a servicer shall not move for foreclosure judgment or order
of sale, or conduct a foreclosure sale . . . .” (emphasis added)); see also Adt. v. Nationstar Mortg.
LLC, No. 3:17-cv-162, 2018 WL 159078, at *5 n. 19 (E.D. Va. Mar. 30, 2018) (stating 12 C.F.R.
§ 1024.41(g) applies when a borrower has submitted a complete loss mitigation application);
Weisheit v. Rosenberg & Assocs., LLC, No. 17-cv-0823, 2017 WL 5478355, at *4 (D. Md. Nov.
15, 2017) (stating that servicer is prohibited from moving towards foreclosure while a completed
loss mitigation application is pending under 12 C.F.R. § 1024.41(g)). As the Hansons never
submitted a completed loss mitigation application, Amerihome was not required to stay foreclosure
proceedings.
Thus, viewing the facts in the light most favorable to the Hansons, the evidence shows that
Amerihome did not make any misrepresentations regarding the status of the Hansons’ loss

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The Hansons lastly appear to argue that Amerihome acted unconscionably when by allegedly violating guidelines
promulgated by the United States Department of Housing and Urban Development (“HUD”) contained in Mortgagee
Letter 2013-40 when it continued foreclosure proceedings after the Hansons requested loss mitigation. (See ECF No.
33 at 10–11.) The only remaining count of the Hansons’ Complaint is whether Amerihome violated the WVCCPA
by pursuing foreclosure during the loss mitigation process and failing to advice the Hansons of their appeal right.
The Court is unsure how the alleged violation of HUD guidelines falls under the remaining WVCCPA claims. To
the extent the Hansons use the HUD guidelines to argue Amerihome acted unconscionably, the Court does not find
that argument persuasive in light of the Court’s finding that Amerihome satisfied the federal regulation that is the
subject of the above guideline. See, e.g., Nahigian v. Juno-Loudoun, LLC, 677 F.3d 579, 587 (4th Cir. 2012) (“HUD
guidelines are not regulations issued with the intent that they act as binding law . . . .”)

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mitigation application or the status of the foreclosure process. The Hansons fail to direct the Court
to any record evidence that raises a genuine issue of material fact as to whether Amerihome
misrepresented that the Hansons’ loss mitigation application was complete and/or that Amerihome
misrepresented that the foreclosure process would be stayed in light of the evidence provided by
Amerihome. Further, in light of Amerihome’s above compliance with the federal regulation
concerning foreclosure during loss mitigation process, the Court cannot find that Amerihome acted
unreasonably in continuing foreclosure proceedings pending receipt of a completed loss mitigation
application.

Accordingly, Amerihome is entitled to summary judgment as to the Hansons’

allegation that that Amerihome violated the WVCCPA by misrepresenting that the foreclosure
process would be stayed during the loss mitigation process.
B.

Claim Regarding Amerihome’s Alleged Failure to Advise on the Right to Appeal
In Count I of their Complaint, the Hansons also allege that Amerihome failed to apprise

the Hansons of their right to appeal a wrongful denial of assistance in violation of § 46A-2-128 of
the WVCCPA. (ECF No. 1-1 at ¶ 21(c).) In their motion, Amerihome argues that the Hansons
were not entitled to be notified of their right to appeal because the Hansons never submitted a
complete loss mitigation application and thus the Hansons had no right to appeal. (See ECF No.
34 at 3–5.) Amerihome further argues that its decision to discontinue the loss mitigation process
was not an appealable final decision. (See id.)
As stated above, § 46A-2-128 of the WVCCPA provides that “[n]o debt collector may use
unfair or unconscionable means to collect or attempt to collect any claim.” W. Va. Code § 46A2-128. Further, the Hansons direct the Court to 12 C.F.R. § 1024.41(c)(1)(ii) which provides that,
after a complete loss mitigation is received, a loan servicer shall do the following:
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Provide the borrower with a notice in writing stating the servicer’s determination
of which loss mitigation options, if any, it will offer to the borrower on behalf of
the owner or assignee of the mortgage. The servicer shall include in this notice the
amount of time the borrower has to accept or reject an offer of a loss mitigation
program as provided for in paragraph (e) of this section, if applicable, and a
notification, if applicable, that the borrower has the right to appeal the denial of any
loan modification option as well as the amount of time the borrower has to file such
an appeal and any requirements for making an appeal, as provided for in paragraph
(h) of this section.
12 C.F.R. § 1024.41(c)(1)(ii). Further, § 1024.41(h)(1) provides the following:
Appeal process required for loan modification denials. If a servicer receives a
complete loss mitigation application 90 days or more before a foreclosure sale or
during the period set forth in paragraph (f) of this section, a servicer shall permit a
borrower to appeal the servicer’s determination to deny a borrower’s loss mitigation
application for any trial or permanent loan modification program available to the
borrower.
§ 1024.41(h)(1).
In response, the Hansons continue to assert that they submitted a complete loss mitigation
application and thus were entitled to be appraised of their right to appeal. (ECF No. 33 at 9.) In
support of this contention, the Hansons direct the Court to the same evidence discussed above.
(See id.) The Hansons further argue that the Amerihome’s decision to discontinue the loss
mitigation process clearly a denial. (Id. at 10.)
The above regulations plainly state the notice of appeal is available only after the servicer
receives a completed loss mitigation application. As stated above a completed loss mitigation
application is one in which the “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.” § 1024.41(b)(1). Here, as discussed more fully above, the Hansons did not submit a
completed loss mitigation application. See supra Part III.A. As such, Amerihome was not
required to send the Hansons notification that they had a right to appeal. Thus, in light of
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Amerihome’s compliance with the above federal regulation, the Court finds that Amerihome’s
failure to advise the Hansons of the right to appeal was not unfair or unconscionable. Further, as
discussed more fully above, the Hansons have not provided any evidence that their loss mitigation
application was complete. Accordingly, Amerihome is entitled to summary judgment on the
Hansons’ allegation that Amerihome failed to advise them of their right to appeal.
IV.

CONCLUSION

For the reasons discussed more fully above, the Court GRANTS Amerihome’s motion for
summary judgment. (ECF No. 29.) The Court DIRECTS the Clerk to remove this case from
the Court’s docket.
IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:

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November 13, 2018