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Chauntel Rampp v. Ocwen Financial Corporation

July 23, 2012

CHAUNTEL RAMPP,
PLAINTIFF,
v.
OCWEN FINANCIAL CORPORATION, ND DOES 1 HROUGH 20,
DEFENDANTS.



The opinion of the court was delivered by: Barry Ted Moskowitz, Chief Judge United States District Court

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FIRST AMENDED COMPLAINT AND GRANTING IN

PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION

Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (sued as "Ocwen Financial Corporation") (collectively "Ocwen") have filed a motion to dismiss Plaintiff's First Amended Complaint ("FAC")*fn1 . Plaintiff Chauntel Rampp ("Plaintiff") has filed a motion for preliminary injunction, seeking an order enjoining Ocwen from foreclosing on her property and requiring Ocwen to pay the legal fees she has incurred to date. For the reasons discussed below, Ocwen's motion to dismiss is GRANTED IN PART and DENIED IN PART. Plaintiff's motion for preliminary injunction is GRANTED to the extent Plaintiff seeks to enjoin foreclosure and is DENIED to the extent Plaintiff seeks the recovery of legal fees.

I. FACTUAL BACKGROUND

In this lawsuit, Plaintiff Chauntel Rampp alleges that Ocwen has wrongfully refused to honor a loan modification agreement Plaintiff entered into with the prior loan servicer, Litton Loan Servicing LP ("Litton").

On September 7, 2005, James and Chauntell Rampp obtained a loan in the amount of $400,000.00, which was secured by a Deed of Trust on the property located at 244 Avalon Drive, Vista, CA 92083 (the "Property").

Also on September 7, 2005, James and Chauntell Rampp obtained a loan in the amount of $100,000, which was secured by a second Deed of Trust on the Property.

On January 22, 2009, a Notice of Default was recorded against the Property. (Def. RJN, Ex. 3.) According to the Notice of Default, the Rampps were in arrears in the amount of $18,956.41.

In her verified FAC, Plaintiff states that on April 4, 2011, she entered into a valid contract for the modification of the $400,000 loan. (FAC ¶ 6.) Plaintiff states that she complied with all of the conditions of the contract for modification, including making her modified payments on time. (FAC ¶ 7.)

Attached to the FAC is a letter dated January 24, 2011, on Litton Loan Servicing letterhead. (Ex. A to FAC.) The letter states that it is a "commitment letter" that contains Litton's offer to modify the terms of the $400,000 loan. The letter sets forth the terms of the modification, including the new principal balance and monthly payment. The letter states that to accept the offer for a modified mortgage, the Rampps must sign and return the letter by February 7, 2011. The offer is made by "Prommis Solutions as authorized agent for Litton Loan Servicing LP." At the end of the letter are terms for "Acceptance of Offer for Modified Mortgage," followed by signature lines under the words: "I/We have had the opportunity to consult with legal and/or tax counsel prior to accepting this offer, and whether or not I/we retained such counsel, I/we have agreed to these terms and conditions." The Rampps signed the letter on January 31, 2011, and presumably returned it by February 7, 2011, resulting in the issuance of a formal loan modification agreement and related documents. (Ex. A to FAC.) These formal documents were signed by the Rampps on April 4, 2011.

In a letter dated August 15, 2011 (Ex. B to FAC), the Rampps were notified by Litton that Ocwen Loan Servicing, LLC, was taking over the servicing of the account. Litton assured the Rampps: "The transfer of the servicing of your account does not affect any term or condition of your financing agreement, other than terms directly related to the servicing of your account."

When Ocwen Loan Servicing, LLC, took over the servicing of the loan, it informed Plaintiff that she did not have a valid loan modification. (FAC ¶ 8.) In a letter dated September 27, 2011, Ocwen Loan Servicing, LLC, states that according to its records, although the Rampps were approved for a loan modification, they declined the modification offer on August 26, 2011. (Ex. C to FAC.) Plaintiff contends that the agreement had already been finalized by then and that there was no refusal. (Opp. to Mot. to Dismiss at 2.) Once Ocwen refused to accept payments under the modified agreement, Plaintiff stopped making the payments and has put them aside. (Rego Decl. in Opp. to Mot. to Dismiss, 2.)

On December 27, 2011, Plaintiff commenced this action. In her FAC, Plaintiff asserts the following claims: (1) specific performance of contract; (2) breach of contract; and (3) injunctive relief.

II. DISCUSSION

Plaintiff seeks a preliminary injunction, enjoining Ocwen from foreclosing on the Property and requiring Ocwen to pay Plaintiff's legal fees incurred to date. Ocwen, in turn, has filed a motion to dismiss the FAC for failure to state a claim. The Court GRANTS Plaintiff's motion for preliminary injunction to the extent that it seeks to enjoin foreclosure proceedings but DENIES Plaintiff's ...


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