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Theresa Agbowo v. Nationstar Mortgage LLC

United States District Court, N.D. California, San Francisco Division

April 10, 2015

THERESA AGBOWO, et al., Plaintiffs,


LAUREL BEELER, Magistrate Judge.


Plaintiffs Theresa Agbowo and Margaret Agbowo sued Nationstar Mortgage LLC ("Nationstar") and Does 1-100 in Alameda County Superior Court for claims related to Nationstar's failure to provide them with a loan modification and subsequent foreclosure upon their property. ( See Notice of Removal, Ex. A ("Complaint"), ECF No. 1 at 14-20.[1]) Nationstar removed the action to this court and now moves to dismiss Plaintiffs' Third Amended Complaint. ( See Notice of Removal, ECF No. 1; Third Amended Complaint ("TAC"), ECF No. 76; Motion, ECF No. 80.) Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable to be determined without oral argument and vacates the April 16, 2015 hearing. Upon consideration of the allegations in the Third Amended Complaint, the facts subject to judicial notice, the papers submitted, and the applicable legal authority, the court grants in part and denies in part Nationstar's motion.



On September 7, 2006, Plaintiffs executed a promissory note and borrowed $417, 000 from Home Loan Specialists, Inc. to purchase property at 850 53rd Street, Oakland, California, 94608 (the "Property").[2] ( See TAC ¶ 8, Ex. A ("Promissory Note"), ECF Nos. 77 & 77-1; Request for Judicial Notice ("RJN"), Ex. A ("Deed of Trust"), ECF No. 7-1 at 5-30.[3]) The loan was secured by the Property. (TAC ¶ 8; Deed of Trust, ECF No. 7-1.) Shortly thereafter, Plaintiffs remodeled the Property, and it has been Margaret's principal residence since 2008. (TAC ¶ 8.)

Sometime between 2006 and 2009 the deed of trust was transferred from Home Loan Specialists to Aurora Loan Services. ( See id. ¶ 9.) As a result of this, Plaintiffs failed to timely pay the taxes owed on the Property. (Id. ) Aurora Loan Services demanded that the taxes be paid in a single payment, but Plaintiffs could not afford to do that. (Id. ) Aurora Loan Services then refused to accept Plaintiffs' monthly mortgage payments until they also paid the taxes in a single payment. (Id. )

So, in November 2009, Plaintiffs applied to Aurora Loan Services for a loan modification. (Id. ¶ 10.) Aurora reviewed their request and offered them a trial payment plan. (Id. ) After they completed the trial payment plan, Aurora Loan Services neither offered nor denied them a permanent loan modification, and the promissory note and the deed of trust were transferred to Nationstar. (Id. )

To stave off a foreclosure, Margaret filed for bankruptcy on March 11, 2011. (Id. ¶ 11.) After being informed that the bankruptcy action would accomplish its purpose, she dismissed the it in June 2012. (Id. )

On August 30, 2012, Plaintiffs applied to Nationstar for loan modification. (Id. ¶ 12, Ex. B ("August 2012 Request"), ECF No. 78.) They hired Hyatt Brokers Associate ("Hyatt") to help them with the process. (Id. ¶ 12.) Hyatt faxed a "third party authorization" to Nationstar on August 30, 2012. (Id. ) The "complete package" for their loan modification application was faxed to Nationstar on October 10, 2012. (Id. ¶ 12, Ex. C ("October 10 fax cover sheet"), ECF No. 78-1.)

From November 2012 to July 25, 2013, "Nationstar submitted 11 requests for additional information, " much of which had already been submitted several times. (Id. ¶ 13, Exs. D (fax cover sheets listing the documents submitted to Nationstar), E (chart summarizing the documents submitted to Nationstar), ECF Nos. 78-2 & 79.) Plaintiffs "responded to each of these demands." (Id. )

In July 2013, Hyatt called Nationstar's mortgage modification center. (Id. ¶ 14.) "[A]fter a lengthy time of the telephone, " Hyatt "was able to get the person [it had been] working with to find all the required documents." (Id. ) "This person... stated that with all the required documents there, [Plaintiffs'] request for [a] mortgage modification was being sent to the underwriter." ( Id.; see also id. ¶ 37 ("After a lengthy telephone conference, Hyatt was told that all of the required documents were in the file, for the mortgage modification.").)

Nevertheless, by letter dated July 25, 2013, Nationstar notified Plaintiffs that their loan modification request was denied due to a lack of providing all of the required documents. (Id. ¶ 14, Ex. F (July 25 denial), ECF No. 79-1 (telling Plaintiffs that they can call Nationstar about "the reason for non-approval for a HAMP modification" and "the reason for the denial of your request, " mentioning other alternatives, and stating, "We are unable to offer you a Home Affordable Modification because you did not provide us with the documents we requested. Two notices which listed the specific documents we needed and the time frames required to provide them have been sent to you."). And "Nationstar's letter... merely state[s] that [P]laintiffs could call a telephone number to discuss the reason for the denial." (Id. ¶ 15.) "This statement does not explain [their] right to contest the denial and have an opportunity to present their position and have the denial fully reviewed." (Id. )

A few days later, on July 30, 2013, Hyatt, on behalf of Plaintiffs, faxed another loan modification application to Nationstar. (Id. ¶ 16.) This application was "accompanied by a complete list of items required" for the application to be reviewed. (Id. ) Nationstar "did not object to" their application, and its acceptance of this application is "shown by [its] request for more documents which were faxed on August 22, 2013." (Id. ¶ 16, Ex. G, ECF No. 79-2.) Nationstar thereafter made another request for documents, some of which had not been requested before, and those documents were faxed on September 23, 2013. (Id. ¶¶ 16, 31, Ex. G, ECF No. 79-2.)

On August 28, 2013, Quality Loan Service Corporation[4] recorded a Notice of Trustee's Sale. (Id. ¶ 17, Ex. H, ECF No. 79-3.) The trustee's sale was scheduled to take place on September 26, 2013. (Id. ¶ 17.) This was just three days after Plaintiffs faxed documents to Nationstar in response to its last request for additional documents. (Id. )

Despite Plaintiffs' continually supplying Nationstar with additional information in support of their pending loan modification application, and unbeknownst to them, the trustee's sale took place on September 26, 2013. ( See id. ¶ 18; RJN, Ex. H ("Trustee's Deed Upon Sale"), ECF No. 7-2 at 56-57.) Nationstar ...

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