The opinion of the court was delivered by: Oliver W. Wanger United States District Court Judge
ORDER RE MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT BY DEFENDANTS FIRST FRANKLIN FINANCIAL CORPORATION, HOME LOAN SERVICES, INC. AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.
Assigned to the Honorable Oliver W. Wanger
Date: February 14, 2011 inclusive, Time: 10:00 a.m.
The Motion to Dismiss by defendants FIRST FRANKLIN FINANCIAL CORPORATION, HOME LOAN SERVICES, INC. (sued erroneously as "Home Loan, Inc. dba First Franklin Loan Services"), and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (collectively hereinafter as "Defendants") the Complaint filed by Plaintiffs CHAD DILLON SANDRY and MELANIE ELIZABETH SEASHLOTZ ("Plaintiffs") came on regularly for hearing on February 14, 2011, at 10:00 a.m., in Courtroom 3 of the above-entitled Court. All appearances are noted on the record.
The Court, having read and considered the moving and opposing papers filed in this matter, as well as the oral argument of counsel, being fully advised, and good cause appearing, finds as follows:
Plaintiffs Chad Dillon Sandry and Melanie E. Seasholtz ("Plaintiffs") proceed with an action for damages and injunctive relief. On December 28, 2010, Plaintiffs filed a first amended complaint ("FAC").
Defendants First Franklin Financial Corp., Home Loan Services, Inc., and Mortgage Electronic Registration Systems, Inc. ("Defendants") filed a motion to dismiss the FAC on January 7, 2011. (Doc. 20). Defendants also filed a motion to strike portions of the FAC. (Doc. 22).
Plaintiffs filed opposition to Defendants' motions on February 1, 2011. (Docs. 29, 30). Defendants filed a reply on March 14, 2011. (Docs. 14, 15).
This action arises out of a loan Plaintiffs obtained for the purchase of their home in or about 2007 ("subject loan"). Plaintiffs first met with David Hoggett ("Hoggett"), an employee of Loan Review. Hoggett told Plaintiff's he would get "the best possible" loan for them. Hoggett submitted a loan application to First Franklin. The loan application overstated the value of the property by $95,000.00; Plaintiffs were not aware of this falsification. The actual value of the property was insufficient to qualify for the loan.
Plaintiffs allege that First Franklin and Loan Review had an agreement in place whereby First Franklin would accept loans containing knowingly false information. Plaintiffs further allege that Loan Review held itself out as First Franklin's agent, and that First Franklin paid Loan Review for leading Plaintiff's into a loan they did not qualify for. Loan Review told Plaintiffs that it "dealt directly with First Franklin and they would fund or approve the loan due to the relationship with First Franklin."
Plaintiffs allege that Defendants never explained the full terms of their loan, including but not limited to the interest rate, how the rate would be calculated, what the payment schedule would be, the risks and disadvantages of the loan, prepayment penalties, and other information. Plaintiffs were rushed into signing the documents. Defendants failed to disclose that the ...