United States District Court, E.D. Virginia, Alexandria Division
M. Brinkema Virginia United States District Judge.
the Court are defendant Professional Foreclosure
Corporation's Motion to Dismiss [Dkt. No. 12] and
defendants Federal Home Loan Mortgage Corporation and
Nationstar Mortgage LLC's Motion to Dismiss [Dkt. No.
14]. The motions have been fully briefed and the Court has
determined that oral argument would not aid the decisional
process. For the reasons that follow, both motions will be
granted and the Complaint will be dismissed.
civil action, plaintiff Stacey King ("King" or
"plaintiff) brings a variety of counts against
defendants Federal Home Loan Mortgage Corporation
("Freddie Mac"), Nationstar Mortgage LLC ("Mr.
Cooper"), and Professional Foreclosure Corporation
of Virginia ("PFC") (collectively,
"defendants") alleging improper conduct related to
the November, 2017 foreclosure sale of a property she owned
December 28, 2006, King executed a deed of trust (the
"Deed of Trust") and a promissory note (the
"Note"), whereby King borrowed $206, 320 from
Countrywide Home Loans, Inc. and used the Property to secure
the loan. Compl. [Dkt. No. 1-1] ¶¶ 14-17. The Deed
of Trust also named MERS as Beneficiary and Samuel I. White,
P.C., as Trustee. Id. ¶ 16. The same day, King
executed a second deed of trust ("Credit Line Deed of
Trust"), which was recorded after the Deed of Trust.
Id. ¶ 18.
2013, SLS began servicing the loan related to the Credit Line
Deed of Trust. Id. On September 18, 2017, MERS,
acting as "nominee for Countrywide Home Loans,
Inc.," assigned the Deed of Trust to Mr. Cooper.
Id. ¶ 19. Four days later, Mr. Cooper, claiming
to be the holder of the Note, executed an Appointment of
Substitute Trustee, replacing Samuel I. White, P.C., with
PFC. Id. ¶ 22. In addition, at some point
between 2006 and 2017, Mr. Cooper began servicing the loan
associated with the Deed of Trust. Id. ¶ 25.
Plaintiff went into default on the first loan. As a result,
on November 1, 2017, PFC sold the Property at a foreclosure
sale, and the Property was transferred via a Trustee's
Deed to Freddie Mac. Id. ¶¶ 26-27.
the sale, SLS notified King that it was now the servicer of
the loan associated with the Deed of Trust. Id.
¶ 28. On March 9, 2018, King sent both Mr. Cooper and
SLS Qualified Written Requests ("QWRs") pursuant to
the Dodd-Frank Wall Street Reform and Consumer Protection Act
and the Real Estate Settlement Procedures Act
("RESPA"), 12 U.S.C. § 2605(e). Id.
¶¶ 29-30. In response, Mr. Cooper and SLS each
stated that it is the servicer of the loan associated with
the Deed of Trust and each produced a copy of the Note.
Id. ¶¶ 31-34. According to King, neither
Freddie Mac, Mr. Cooper, nor SLS has the Note, and these
entities have "provided conflicting and inaccurate
information regarding possession of the Note."
Id. ¶ 36. In addition, no entity has produced
documentation showing a change of ownership of the Note from
Countrywide Home Loans, Inc. Id. ¶ 37.
present civil action followed. King's Complaint includes
five counts. Count 1, which is brought only against Mr.
Cooper, alleges that it violated 12 U.S.C. §
2605(b)(1)-(2), which requires that a servicer "notify
the borrower in writing of any assignment, sale, or transfer
of the servicing of the loan to any other person" no
less than 15 days before the date of transfer, because
servicing of the loan associated with the Deed of Trust was
transferred to SLS on December 18, 2017 but Mr. Cooper never
notified King of this transfer. Count 1 also alleges that Mr.
Cooper has "a pattern or practice of noncompliance with
the requirements of this section." Compl. ¶ 46.
King seeks actual damages, statutory damages, and costs and
attorney's fees as remedies. Counts 2 and 3, which are
brought against Freddie Mac, Mr. Cooper, and PFC, each allege
breach of contract. Specifically, Count 2 alleges that the
Deed of Trust requires that the lender provide King with a
pre-acceleration notice that meets various requirements and
that none of the defendants sent this notice before
foreclosing on the property. Count 3 alleges that the Deed of
Trust requires that the lender or trustee provide King,
"and all other persons, notice of sale as required by
Applicable Law"; that Virginia law requires that written
notice be provided to the property owner before any
foreclosure sale; and that none of the defendants provided
such notice to King. For each of Counts 2 and 3, King seeks
$50, 000 in damages and costs and attorney's fees. Count
4, which is brought only against PFC, alleges a breach of
fiduciary duty and specifically that PFC took various actions
to facilitate and complete the foreclosure sale without
performing reasonable due diligence to ensure that the party
requesting the foreclosure sale was authorized to make such a
request and that the requirements set out in the Deed of
Trust were followed. For Count 4, King requests $25, 000 in
damages. In Count 5, which is brought against all defendants,
plaintiff claims that the assignment of the Deed of Trust to
Mr. Cooper and the appointment of the Substitute Trustee, as
well as the subsequently issued Trustee's Deed, were
invalid and have created a cloud on plaintiffs title.
Accordingly, plaintiff seeks injunctive relief directing
state officials to remove the assignment of the Deed of
Trust, the appointment of the Substitute Trustee, and the
Trustee's Deed from the land records.
Standard of Review
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6),
"a complaint must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is
plausible on its face."' Ashcroft v. Iabal.
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombl v. 550 U.S. 544, 570 (2007)). Plausibility
requires "more than a sheer possibility that a defendant
has acted unlawfully"; instead, the plaintiff must plead
"factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id.
Count 1, King alleges that Mr. Cooper violated 12 U.S.C.
§ 2605 by not providing her with timely notification of
the transfer to SLS of the servicing of the loan associated
with the Deed of Trust before such transfer occurred on
December 18, 2017. Section 2605(b) imposes an obligation on
"[e]ach servicer of any federally related mortgage
loan" to "notify the borrower in writing of any
assignment, sale, or transfer of the servicing of the loan to
any other person." Even assuming for the sake of
argument that this obligation continued to apply to Mr.
Cooper after the foreclosure sale occurred in November 2017,
Count 1 will be dismissed because King has not alleged any
facts that give rise to a plausible claim of damages caused
by Mr. Cooper's failure to provide the requested notice.
Although King has conclusorily alleged that she "has
suffered damages as a result of Mr. Cooper's
aforementioned violations, including attorney's fees
incurred," Compl. ¶ 45, she has not explained in
any concrete way how she was injured by Mr. Cooper's
actions. For example, she has not alleged that she
tried to send payments on the loan to Mr. Cooper and that
those payments were not credited to her account because the
servicing of the loan had been transferred. Moreover, because
the transfer of the servicing obligations occurred after the
foreclosure sale, King is unable to trace any harm related to
the foreclosure on the Property to Mr. Cooper's failure
to provide this notice. ...