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Bever-Leigh B. Penney v. Ndex West LLC et al

February 13, 2013


The opinion of the court was delivered by: Otis D. Wright, II United States District Judge




Plaintiff Bever-Leigh Penney's case is not unique among the litany of mortgage-foreclosure cases this Court and this district see and have seen on a regular basis since 2008. Penney fell upon hard times and was unable to make her full mortgage payments to her bank, Defendant Wells Fargo. Wells Fargo, through its agent, recorded a Notice of Default and Election to Sell Under Deed of Trust, thereby initiating the foreclosure process. Penney applied for a loan modification but was denied. She now alleges several fraud-based claims, contending that Wells Fargo promised not to refer her to foreclosure while her request was pending. Given that Wells Fargo warned Penney that the foreclosure process would have to continue once it began, all three of her claims fail as a matter of law. Consequently, the Court GRANTS Wells Fargo's Motion for Summary Judgment.


On May 19, 1998, Plaintiff obtained a fixed-rate mortgage loan for $269,500.00 from DiTech Funding Corporation; this loan was secured by a deed of trust encumbering the property located at 9404 Wayside Drive, Shadow Hills, California 91040. (RFJN Ex. A.) This property included two parcels of real property identified as APN 2549-016-001 ("Lot 001") and APN 2549-016-004 ("Lot 004"). (RFJN Ex. B.) In connection with the loan, Plaintiff executed a promissory note whereby she agreed to make fixed payments of $1,884.38 per month. (RFJN Ex. A; Penney Dep. 26:4--12, Sept. 20, 2012.)

DiTech assigned the Deed of Trust to GE Capital Mortgage Services who then ultimately assigned it to Wells Fargo on March 8, 2005. (RFJN Ex. C, D.) The assignment to Wells Fargo was recorded on April 6, 2005. (RFJN Ex. D.)

Between July 1, 2010, and November 16, 2010, Plaintiff made various mortgage payments totaling $9,026.01, including a $700.00 payment in August 2010 and a $550.00 payment in November 2010 (Penney Decl. Ex. 3), both of which fell below her fixed, $1,884.38 monthly payments. As of December 29, 2010, Plaintiff was in default on her mortgage in the amount of $15,192.28.*fn1 (Penney Decl. Ex. D.)

On December 30, 2010, as a result of Plaintiff's default, a Notice of Default and Election to Sell Under Deed of Trust was recorded in the Los Angeles County Recorder's Office. (Id.)

The Notice of Default began, "If your property is in foreclosure because you are behind in your payments it may be sold without any court action . . . . No sale date may be set until three months from the date this Notice of Default may be recorded . . . ." (Id. at 1.) The Notice also made multiple references to foreclosure, such as "[w]hile your property is in foreclosure," "the obligation being foreclosed upon," "to stop the foreclosure," and "[n]othwithstanding the fact that your property is in foreclosure." (Id. at 1--2.)

Beginning in February 2011, Wells Fargo phone representatives initially informed Plaintiff that "no foreclosure proceedings would take place on Plaintiff's property, starting from the time Defendant Wells Fargo received an application from Plaintiff for a U.S. Government HAMP (Home Affordable Mortgage Program) loan modification, and continuing throughout the entire period of the loan modification process."

On February 7, 2011, Plaintiff listed the vacant portion of her lot, Lot 004, with a real-estate agent with the intent to sell the land in order to rectify the arrearage on her mortgage. (Penney Dep. 95:22--23; Harb Dep. 13:11--25, Nov. 12, 2012.) She received one offer, but no sale ever occurred. (Penney Dep. 97:1--5.) At no point did she attempt to sell the occupied portion of the property. (Id. at 97:15--22; Harb Dep. 14:1--2.)

Penney wrote to Wells Fargo requesting consideration for HAMP on both April 17 and July 15, 2011. (Penney Decl. Ex. T.)

In advance of her later written request for HAMP consideration, on both March 24 and April 9, 2011, Penney received identical letters and HAMP packets from Wells Fargo. (Penney Decl. Exs. A, B, Q, R.) The HAMP packet said, "While we're reviewing your information, your home will not be referred to foreclosure or sold at a foreclosure sale." (Id. at Exs. A, B.) But the letter stated, "During the HAMP evaluation process: If your loan has been previously referred to foreclosure, we are obligated* to continue the foreclosure process while it is evaluated for a HAMP modification." (Id. at Exs. Q, R.) The asterisk refers to a statement that the "decision to stop the foreclosure process or sale is made by the investor." (Id.)

On May 25, 2011, Wells Fargo's Loss Mitigation Department informed Penney that a trustee's sale had been scheduled for June 9, 2011. (Penney Decl. Ex. X.) However, no sale occurred on that date.

Wells Fargo sent another letter to Penney on June 30, 2011 that said, "As of the date of this letter your loan is in active foreclosure." (Id. at Ex. E.)

On April 2, 2012, a Home Preservation Specialist sent Penney a letter informing Penney that she did not meet the HAMP requirements because her "pending loan modification required approval from the investor that ultimately own[ed] [her] mortgage, and the investor . . . declined the request to modify [her] mortgage." (Id. at Ex. H.) The letter also said that if her mortgage had previously been referred to foreclosure, that process would move forward at that time. (Id.)

On June 8, 2011, Penney filed a Complaint in Los Angeles Superior Court against Wells Fargo and NDeX West, LLC, alleging three different claims. (ECF No. 1, Ex. A.) Wells Fargo removed the case to this Court on July 6, 2011. On October 18, 2011, the Court granted Penney leave to amend her Complaint (ECF No. 29), and she filed her First Amended Complaint the same day. (ECF No. 30.) The Complaint alleged 12 claims against Wells Fargo, NDeX West, Stewart ...

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