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Mayer v. EMC Mortgage Corporation

United States District Court, N.D. Indiana, Hammond Division

April 22, 2014

TODD and LISA MAYER, Plaintiffs,
v.
EMC MORTGAGE CORPORATION, JP MORGAN CHASE BANK, N.A., and DOES 1-100 Defendants.

OPINION AND ORDER

ANDREW P. RODOVICH, Magistrate Judge.

This matter is before the court on the Defendants' Partial Motion to Dismiss for Failure to State a Claim [DE 39] filed on December 23, 2013, and the Plaintiffs' Motion for Leave to File Surreply [DE 47] filed on February 7, 2014. For the following reasons, the motion Defendants' Partial Motion to Dismiss for Failure to State a Claim [DE 39] is GRANTED IN PART and DENIED IN PART, and the Plaintiffs' Motion to for Leave to File Surreply [DE 47] is DENIED.

Background

On October 7, 2005, the plaintiffs, Todd and Lisa Mayer, executed and delivered to GreenPoint Mortgage Funding, Inc. an Adjustable Rate Note in the original principal sum of $294, 000. To secure the note, the plaintiffs executed a mortgage in favor of GreenPoint that encumbered the property commonly known as 2901 Prentiss Drive, Valparaiso, Indiana, 46385. EMC was the originator or seller of the mortgage and "EMC/Chase was/is the servicer of the Mortgage." (Pl.'s Am. Compl. ΒΆΒΆ 15, 20)

The plaintiffs filed their amended complaint on November 7, 2013. In Count I, the plaintiffs allege that the defendants violated the Real Estate Settlement Procedures Act (RESPA). In Count II, they complain that the defendants breached four contracts that they entered with EMC that modified their monthly payment obligations. They entered the first agreement on March 1, 2008, and attached a copy of the agreement to their complaint. The attached document did not bear the signature of an EMC representative. The parties dispute whether the agreement permanently modified the payment structure or whether it set forth how the delinquency would be paid back over the course of six installment payments.

The plaintiffs allege that they entered a second, third, and fourth agreement to modify the loan. The plaintiffs attached a letter dated December 23, 2009, which stated that they did not qualify for a loan modification. To show that the third agreement was entered the plaintiffs attached a third letter that was not signed by either party. The plaintiffs did not attach any written document to show that a fourth agreement was entered, and did not allege in their complaint that the fourth agreement was reduced to writing. The plaintiffs stated that all of these agreements permanently modified the payment terms under the note.

The plaintiffs further allege that they delivered a Qualified Written Request (QWR) to Chase on August 31, 2010, attached as Exhibit K to their complaint. The plaintiffs stated that Exhibit K qualifies as a QWR under RESPA because it included the borrower's name, the numerical identification of the specific account, the geographic location of the borrower's local servicing branch, and other account information. The plaintiffs further allege that the document asserted a plain statement of the reasons for their belief that the account was in error, provided sufficient detail regarding information sought and specific corrections requested, and generally described in great detail the issues surrounding the borrowers' account. The letter stated in relevant part:

My clients... have requested a specific payment history to show where the payments for the last two years have been applied. That has never been provided. What has been provided is a Customer Account Activity Statement which does not show where or how the payments have been applied for the last year.
My clients have made numerous attempts in the past two years to apply for modifications of their mortgage....They attempted to contact your company to make payments after the trial period and was [sic] instructed to continue to pay the amount that was entered into without any written reasons for denial of the modification....This was never conveyed in writing to my clients nor was a letter of rejection ever sent regarding the application for modification being rejected or denied due to the reason given above...
My clients were sent an escrow statement dated June 3, 2010 showing they had a surplus of $1139.47 in their escrow account when it should have been $489.00. Clearly the overpayment of their monthly payments have [sic] been applied to escrow instead of the arrearage amount. They requested that this surplus amount be applied to the arrearage.
I am requesting on behalf of my clients that the amount that is in arrears be put on the back end of their loan. This would save my clients from the continued hit each month that their credit rating is being negatively scored.... If this is not done then I will be forced to file suit against EMC Mortgage under the terms of the Fair Credit Reporting Act.

The defendants now move for a partial dismissal of the plaintiffs' complaint, arguing that the loan modifications were not supported by the proper documentation and that the plaintiffs did not send a QWR that complies with the requirements of RESPA.

Discussion

The plaintiffs requested leave to file a surreply in opposition to the defendants' motion to dismiss. Northern District of Indiana Local Rule 7-1(e) states that a supporting brief may not exceed 25 pages without leave of court. The plaintiffs' proposed sur-reply brief exceeds this page limit and the plaintiffs did ...


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