United States District Court, E.D. Virginia, Richmond Division
FLOYD RONALD BURKE, on behalf of himself and others similarly situated, Plaintiffs,
NATIONSTAR MORTGAGE LLC, EVERBANK, EVERBANK FINANCIAL CORPORATION, EVERHOME MORTGAGE LLC, and JOHN DOE COMPANY, Defendants.
R. Spencer, United States District Judge
MATTER comes before the Court on the Motion for Judgment on
the Pleadings filed by Defendant Nationstar Mortgage LLC
("Nationstar") pursuant to Federal Rule of Civil
Procedure 12(c). ECF No. 25. Nationstar contends that
Plaintiff Floyd Ronald Burke fails to state a claim against
Nationstar upon which relief can be granted. Burke opposes
the motion. ECF No. 29. For the reasons that follow, the
Court will grant in part and deny in part Nationstar's
Motion for Judgment on the Pleadings.
December 16, 2014, Burke filed a seven-count Class Action
Complaint in this Court, alleging the following: "breach
of contract for breach of [the] implied covenant of good
faith and fair dealing, " ("Count I"); a class
claim ("Count II") and an individual claim
("Count III") for violations of the Federal and
Virginia Equal Credit Opportunity Act ("ECOA");
violation of the Real Estate Settlement and Procedures Act
("RESPA") ("Count IV"); violations of the
Fair Debt Collection Practices Act ("FDCPA")
("Counts V and VI"); and breach of contract
March 13, 2015, Defendants Nationstar and Everbank
(collectively, the "Defendants") moved to dismiss
Count I, Count III, Count V, and Count VI of the Complaint
(the "Motion to Dismiss"). ECF No. 11. On April 17,
2015, Burke filed a response and voluntarily withdrew Counts
V and VI, the FDCPA claims alleged in the Class Action
Complaint. ECF No. 18. The Court subsequently granted the
Motion to Dismiss with respect to Count I.
October 13, 2015, Nationstar filed the Motion for Judgment on
the Pleadings, seeking to dismiss the remaining claims: Count
II, Count III, Count IV, and Count VII. ECF No. 25. Burke
filed a response on November 11, 2015. ECF No. 29. On
December 1, 2015, Nationstar filed a reply. ECF No. 30. This
matter is now ripe for review.
purports to represent a class of homeowners who have been
damaged by Nationstar's alleged failures to comply with
applicable law in connection with their mortgage loan
modification requests. The following is taken from the facts
as set forth in Burke's Complaint and echoed in this
Court's Opinion on the Motion to Dismiss. Where
appropriate, the Court additionally notes allegations as set
forth by Nationstar, some of which the Court may consider on
a Rule 12(c) motion.
of 2008, Burke "executed a Note in the principal sum of
$101, 246.00 and Deed of Trust secured by his primary
residence and backed by the Federal Housing Administration
CFHA')." Complaint ("Compl.") ¶ 14.
On or about July 1, 2008, after Burke executed the loan
documents, "Bank of America acquired the servicing
rights for [his] mortgage." Id. ¶ 23. In
2011, Burke "experienced financial hardship due
primarily to divorce" and "filed [for] Chapter 7
bankruptcy, " but "filed a Statement of Intention
to reaffirm his mortgage debt to Bank of America."
Id. ¶¶ 24-25. When Burke received his
bankruptcy discharge in November of 2011, he was
"current on his mortgage." Id. ¶ 26.
November 14, 2012, Burke, still "current on his
mortgage" payments of "757.27 per month,
" applied to Bank of America for a new loan in the form
of "a loan modification." Id. ¶¶
27-28. Subsequently, "[b]y letter dated November 20,
2012, Bank of America informed [Burke] that it had received
his application for loan modification and requested
additional income documentation, which [he] immediately
provided." Id. ¶ 30. Thereafter,
"Bank of America notified [Burke] that servicing of the
loan had been transferred to Nationstar beginning December 4,
2012." Id. Burke then started "making
payments of $739.90 to Nationstar." Id.
¶¶ 31. According to Nationstar, the initial payment
"was subsequently returned and reversed due to an
invalid account number." Answer ¶ 31.
January 2013, [Nationstar] sent a letter to [Burke] offering
review for Home Affordable Modification Program (HAMP),
" to which Burke responded by "submitting] the
completed application and required documents." Compl.
¶ 32. On "February 2, 2013, Nationstar Mortgage
sent a letter to [him] stating he was in default for the
January 1, 2013 and February 1, 2013 payments."
Id. ¶ 33.
alleges that "[i]n May 2013, his mortgage payment
increased to $747.28 per month." Id. ¶ 34.
On May 22, 2013, Nationstar informed Burke that "he had
been approved to enter into a Trial Period Plan
[("TPP")]... under the FHA HAMP Modification
Program." Id. 135- Specifically, Burke alleges
that the letter approving the TPP provided:
Congratulations! You are approved to enter into a trial
period plan under the FHA HAMP Modification Program. This is
the first step toward qualifying for more affordable mortgage
payments. Please read this letter so that you understand all
the steps you need to take to modify your mortgage payments.
Id. ¶ 36. According to Burke, with respect to
payments, the letter from Nationstar instructed:
What you need to do... To accept this offer, you must make
new monthly "trial period payments" in place of
your normal monthly mortgage payment. Send your monthly trial
period payments instate [sic] of your normal monthly mortgage
payment as follows:
• 1st payment: $575.40 by 7/1/2013
• 2nd payment: $575.40 by 8/1/2013
• 3rd payment: $575.40 by 9/1/2013
• 4th payment: $575-40 by 10/1/2013
Id. ¶ 37; see also Answer ¶ 37.
The letter further provided that Nationstar was "not
obligated or bound to make any modification of the Loan
Documents" and that Nationstar would "hold the
payments received... in a non-interest bearing account until
they total an amount that is enough to pay [Burke's]
oldest delinquent monthly payment on [the] Loan in
full." May 22, 2013 Letter from Nationstar to Burke at 3
(ECF No. 26-2).
the trial period, Burke alleges that "he made all four
payments of $575.40, due July 1, August 1, September 1, and
October 1." Compl. ¶ 38; see also Answer
¶ 35. During this trial loan modification period,
however, Burke continued to receive monthly statements from
Nationstar in the amount of $747.28 per month. Compl. ¶
38. The Complaint provides that after Burke contacted
Nationstar to "inquire about the correct amount that
should be paid for the mortgage, " a "Nationstar
representative informed [Burke] not to worry about the amount
that was in his monthly statements" and instructed him
to "continue to pay per the TPP instructions."
Id. ¶ 39.
November 2013, after completing the trial loan modification,
Burke "received permanent Loan Modification documents
from Nationstar, " which he alleges to have "signed
and notarized" before sending them back to Nationstar.
Id. ¶¶ 41-42. Burke further asserts that
the documents provided that his modified mortgage payment
would be $569.42 per month. Id.
41. Nationstar points out that "the Loan Modification
Agreement expressly provided, 'Borrower agrees to make
and execute other documents or papers as may be necessary to
effectuate the terms and conditions of this Agreement which,
if approved and accepted by the Lender, shall bind
and inure to the heirs, executors, administrators, and
assigns of the Borrower." Answer ¶ 41. The Loan
Modification Agreement also instructed Burke to "sign
and have the documents notarized." Id.
Moreover, the Loan Modification documents warned that the
"modification [would] not be ...