United States District Court, N.D. California, San Francisco Division
Rahila A Khan, Plaintiff, Pro se, Fremont, CA.
For ReconTrust Company, Bank of America, N.A., Defendants: Brian Stratton Whittemore, Severson & Werson, A Professional Corporation, San Francisco, CA.
For Select Portfolio Servicing, Inc., Defendant: Gwen Heather Ribar, James Jose Ramos, LEAD ATTORNEYS, Wright, Finlay and Zak, LLP, Newport Beach, CA.
ORDER GRANTING SPS'S MOTION TO DISMISS AND GRANTING IN PART AND DENYING IN PART RECONTRUST AND BANK OF AMERICA'S MOTION TO DISMISS [Re: ECF Nos. 94 & 97]
LAUREL BEELER, United States Magistrate Judge.
Plaintiff Rahila Khan, proceeding pro se, filed this action against defendants ReconTrust Company (" ReconTrust" ), Bank of America, N.A. (" Bank of America" ), and Select Portfolio Servicing, Inc. (" SPS" ) (collectively, " Defendants" ) for claims based on the circumstances surrounding her mortgage loans and her subsequent default on those loans. ( See Second Amended Complaint (" SAC" ), ECF No. 84. Defendants move to dismiss Ms. Khan's Second Amended Complaint. Upon consideration of the papers submitted and the applicable legal authority, the court grants SPS's motion and grants in part and denies in part ReconTrust and Bank of America's motion.
I. MS. KHAN'S ALLEGATIONS
Ms. Khan alleges that in September 2006, she entered into two mortgage loans (hereinafter, referred to as the " First Loan" and the " Second Loan" ), which she used to purchase property at
at 39959 Michelle Street, Fremont, California. ( See First Amended Complaint (" FAC" ), ECF No. 22, ¶ 2; SAC ¶ 2; SPS RJN, Exs. A, B, ECF No. 95. In January 2009, Ms. Khan began falling behind on her mortgage payments " because the interest rates were exorbitant and it was financially impossible for her to [make them]." (SAC ¶ 13.)
Thereafter Ms. Khan sought, and/or thought she received, trial or permanent loan modifications of the First Loan on three occasions from Bank of America. ( See SAC ¶ ¶ 7, 14.) On the first occasion, Ms. Khan alleges that she obtained a temporary loan modification in September 2009, made modified payments in October and November 2009, received a permanent loan modification contract in January 2010, and signed and returned the permanent loan modification contract and provided evidence of her income that same month, but Bank of America nevertheless cancelled the modification, stating that it never received proof of her income (a claim she denies). ( Id. ¶ 14(A).) On the second occasion, Ms. Khan alleges that she obtained another loan modification in January 2010 and that she made modified payments in February and March 2010, but Bank of America cancelled the modification without giving any reason for its doing so. ( Id. ¶ 14(B).) On the third occasion, Ms. Khan alleges that she obtained a loan modification in April 2010. ( Id. ¶ 14(C).) She alleges that she was required to supply additional information, which she did, and that she believed the modification was in place until she received a Notice of Default from ReconTrust. ( Id.) Ms. Khan alleges that, despite Bank of America's representations to the contrary, it turns out that Bank of America never actually had authority to modify her First Loan because of Bank of America's duties under the pooling and service agreement (" PSA" ) to which her First Loan had been assigned. ( Id. ¶ 14(E).)
A Notice of Default, which was recorded by ReconTrust on September 21, 2011,
states that Ms. Khan was behind on her mortgage payments by $151,302.53 as of September 20, 2011. ( Id. ¶ 15; ReconTrust and Bank of America RJN, Ex. C, ECF No. 97-1.) Attached to the Notice of Default is a declaration of Chamkiri Miller, a Mortgage Servicing Specialist II at Bank of America, who marked a box indicating that Bank of America " tried with due diligence to contact [Ms. Khan] in accordance with California Civil Code § 2923.5." (SAC ¶ 18; ReconTrust and Bank of America RJN, Ex. C, ECF No. 97-1.) The box indicating that Bank of America " has contacted [Ms. Khan] to assess [her] financial situation and explore options for [her] to avoid foreclosure" was not marked. (ReconTrust and Bank of America RJN, Ex. C, ECF No. 97-1.) In any event, Ms. Khan alleges Ms. Miller did not initiate any attempt to try to contact" her. (SAC ¶ 19.)
SPS became the servicer of her loans in June 2012. ( Id. ¶ 4(C). Ms. Khan alleges that SPS " has been refusing to accept mortgage payments on the loans, have not recognized the modifications, and continue[s] to add illegal and unexplained charges to the loan payment amount." ( Id.)
In addition to the allegations summarized above, Ms. Khan also alleges that Defendants, along with others, failed to properly " securitize" her loan pursuant to the applicable PSA and therefore have no right to foreclose on her property. ( See Id. ¶ ¶ 8-9, 25-26.) She also alleges that Defendants failed to properly substitute the trustee under the deed of trust for the First Loan and therefore Defendants have wrongfully foreclosed on her property. ( See Id. ¶ ¶ 11, 16-17, ...