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Villacis v. Ocwen Loan Servicing, LLC

United States District Court, N.D. California

May 12, 2015

OCWEN LOAN SERVICING, LLC, et al., Defendants.


JAMES DONATO, District Judge.

The plaintiff in this case seeks to enjoin a threatened foreclosure of her home. Defendants have moved to dismiss the sole cause of action in this case. The Court grants the motion in part and denies it in part.


The plaintiff, Maria Villacis, brought this suit in Alameda County Superior Court on July 8, 2014, whence it was removed. See Notice of Removal, Dkt. No. 1. Villacis alleges violations of California's Homeowner's Bill of Rights. See Complaint ¶ 14, Dkt. No. 1-2. In particular, she alleges that defendant Ocwen Loan Servicing improperly engaged in "dual tracking": while considering her application for a loan modification, it was simultaneously attempting to foreclose on her home. See id. ¶¶ 7, 9. According to Villacis, Ocwen tried to "string [her] along" by promising a modification only if certain documents were provided, which she claims "were the same documents that had been previously requested and previously provided on numerous occasions." Id. ¶ 10. Villacis alleges that, contrary to Ocwen's claims, she did provide Ocwen with a completed loan modification application. Id. ¶ 17.

Villacis also alleges that Ocwen failed to provide her with a "single point of contact, " in violation of California law. See id. ¶¶ 12, 18-19. Instead, she claims that she was "shuttled from representative to representative, " and is facing foreclosure as a result. See id. ¶ 19.


A complaint must be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure if the facts, as alleged in the complaint, are not sufficient to make out a legal claim. See SmileCare Dental Group v. Delta Dental Plan of Calif., Inc., 88 F.3d 780, 783 (9th Cir. 1996). All material allegations of the complaint are taken as true and considered in the light most favorable to the nonmoving party. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). The complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Where a court dismisses for failure to state a claim pursuant to Rule 12(b)(6), it should normally grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990).


A. Dual Tracking Claims

Dual tracking may be actionable under section 2923.6 of the California Civil Code, see Greene v. Wells Fargo Bank, N.A., 2015 WL 2157472, at *2 (N.D. Cal. May 7, 2015), or under section 2924.18, see Rockridge Trust v. Wells Fargo, N.A., 985 F.Supp.2d 1110, 1149-50 (N.D. Cal. 2013). Villacis's complaint cites only the latter section, but as the parties discussed both sections in their briefing, the Court will follow suit.

With respect to the former section, the parties' briefing focuses on the provision found at section 2923.6(c), which states in part:

If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower's mortgage servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale, or conduct a trustee's sale, while the complete first lien loan modification application is pending.

Cal. Civ. Code § 2923.6(c).

Ocwen argues that any allegations under section 2923.6 are inadequately pleaded because that section applies "only to first lien mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units, " where "owner-occupied' means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes." See Cal. Civ. Code § 2924.15(a). Ocwen also points out that section 2923.6(c) requires the borrower to submit a "complete application, " where "complete" is defined to mean that "a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer." See Cal. Civ. Code § 2923.6(h). Ocwen claims that any adequate complaint alleging a violation of section 2923.6(c) must allege (1) that the subject loan is secured by a first lien; (2) that the property in question is ...

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