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Jennings v. Roundpoint Mortgage Servicing Corp.

United States District Court, E.D. Virginia, Norfolk Division

October 10, 2018

STERLING L. JENNINGS, et al., Plaintiffs,
v.
ROUNDPOINT MORTGAGE SERVICING CORPORATION, et al., Defendants.

          UNITED STATES MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

          Robert J. Krask, United States Magistrate Judge

         Sterling L. Jennings and Deirdre D. Jennings ("plaintiffs") filed a complaint against defendants RoundPoint Mortgage Servicing Corporation's ("RoundPoint") and Equity Trustees, LLC, in the Circuit Court for the City of Suffolk on July 11, 2017, seeking rescission of the foreclosure sale, a declaratory judgment stating that the foreclosure sale is void and invalid, compensatory damages against RoundPoint in the amount of $50, 000.00, and a stay of any unlawful detainer proceedings until the claims in the complaint are resolved. ECF No. 1-1. RoundPoint removed the case to this Court on August 11, 2017. ECF No. 1 at 1. On February 27, 2018, the Court granted in part RoundPoint's partial motion to dismiss, and dismissed plaintiffs' claims for breach of contract and for violation of section 1024.38 of the Real Estate Settlement Procedures Act ("RESPA"), 12 C.F.R. § 1024.38, pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 17.

         On August 31, 2018, RoundPoint filed a motion for summary judgment on the three remaining counts of plaintiffs' complaint and request for declaratory judgment, asserting there are no genuine issues of material fact and it is entitled to judgment as a matter of law pursuant to Federal Rule of Civil Procedure 56(a). ECF No. 42. RoundPoint filed a memorandum and exhibits in support of the motion. ECF Nos. 43, 43-1-43-6. Plaintiffs filed an opposition to the motion on September 12, 2018, to which RoundPoint replied. ECF Nos. 55, 58. An order of reference assigned this motion to the undersigned. ECF No. 62. Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and (C), Rule 72(b) of the Federal Rules of Civil Procedure, and Local Civil Rule 72, it is hereby recommended that RoundPoint's motion for summary judgment be GRANTED.

         I. UNDISPUTED FACTS[1]

         A. The Loan

         On June 10, 2015, plaintiffs obtained a loan from Movement Mortgage, LLC, in the amount of $404, 395.00, which was insured by the Federal Housing Administration. RoundPoint's statement of undisputed material facts ("Stmt.") ¶ 1, ECF No. 43; Fink Aff. ¶¶ 5-6, ECF No. 43-1;[2] Ex. 2 (RFA Nos. 1-2), ECF No. 43-2 at 4, 15-31. Plaintiffs executed a note and deed of trust securing the loan with the real property and improvements located at 408 Quaker Ridge Court, Suffolk, Virginia 23435 (the "Property"). Stmt. ¶ 2; Fink Aff. ¶ 5; Ex. 2 (RFA Nos. 1-2), ECF No. 43-2 at 4, 15-31. Servicing of the loan transferred to RoundPoint on August 1, 2015. Stmt. ¶ 4; Fink Aff. ¶ 7, Ex. A, ECF No. 43-1 at 10-22. The rights and interest in the deed of trust were assigned to RoundPoint on March 1, 2017. Stmt. ¶ 4; Fink Aff. ¶ 7, Ex. B, ECF No. 43-1 at 24-26.

         B. The Default and Initiation of Foreclosure Proceedings

         After August 30, 2016, plaintiffs stopped submitting monthly mortgage payments. Stmt. ¶¶ 6-7; Fink Aff. ¶¶ 10-11. On November 28, 2016, RoundPoint notified plaintiffs that the loan was in default, and failure to cure the default of $6, 290.64 by January 4, 2017, could result in the initiation of foreclosure proceedings. Fink Aff. ¶ 12, Ex. F, ECF No. 43-1 at 38-42. On December 1, 2016, RoundPoint sent plaintiffs a letter stating, "[t]he Federal Housing Administration (FHA) requires mortgage servicers to attempt to schedule a face-to-face meeting with Customers with past due accounts to discuss possible repayment options." Ex. 2 (RFA No. 32), ECF No. 43-2 at 6, 32-34; Fink Aff. ¶ 14, Ex. G, ECF No. 43-1 at 44-45. The letter further stated,

If we do not hear from you, then we may send a representative to the property address listed above in an attempt to contact you. Please contact us within 14 calendar days of this letter to schedule the face-to-face meeting or to notify us that you are not interested in participating in a face-to-face meeting.

Id. Plaintiff Deirdre Jennings acknowledged receiving the letter, and testified in her deposition After plaintiffs failed to timely pay the principal and interest payment due for July 1, 2016, RoundPoint sent plaintiffs a letter on August 24, 2016, notifying plaintiffs that they were in default and failure to cure the default may result in RoundPoint initiating foreclosure proceedings on the Property. Stmt. ¶¶ 5-6; Fink Aff. ¶ 9, Ex. C, ECF No. 43-1 at 28-30. Plaintiffs cured the delinquencies by August 30, 2016. Stmt. ¶ 6; Fink Aff. ¶ 10, Exs. D, E, ECF No. 43-1 at 32-33, 35-36. that she placed a telephone call to RoundPoint in response to the letter. Ex. 5 (Deirdre Todd[4]Dep. Tr. at 52:11-53:17), ECF No. 43-5 at 9-10.[5]

         On or about December 22, 2016, a RoundPoint agent and/or employee traveled to the Property and met with the plaintiffs. Stmt. ¶ 9; Fink Aff. ¶ 16; Ex. 5 (Deidre Todd Dep. Tr. at 53:25-54:3, 91:10-13), ECF No. 43-5 at 10-11, 14.[6] Ms. Todd testified that she met with someone from RoundPoint, and that the person informed her that "they were not going to take our home." Ex. 5 (Deirdre Todd Dep. Tr. 53:25-54:11), ECF No. 43-5 at 10-11.

         In a letter dated January 4, 2017, RoundPoint notified plaintiffs that the loan was in default and failure to cure the default of $9, 320.02 by February 10, 2017, could result in RoundPoint's initiation of foreclosure proceedings. Fink Aff. ¶ 17, Ex. H, ECF No. 43-1 at 47-49.

         C. Plaintiffs' Loss Mitigation Submissions

         On February 2, 2017, plaintiffs submitted a 14-page loss mitigation application to RoundPoint by facsimile, which included: (1) a cover page; (2) a 5-page uniform borrower assistance form that appears to have been signed by Sterling Jennings on February 1, 2017; (3) a 2-page 4506-T form that appears to have been signed by Sterling Jennings and Deirdre Jennings on February 1, 2017; (4) a 5-page bank statement for Deirdre Jennings reflecting account information for one month; and (5) a 1-page invoice from Bob White Landing Owners Association, Inc. Fink Aff. ¶ 18, Ex. I, ECF No. 43-1 at 53-66. In response, RoundPoint sent plaintiffs an "Incomplete Information Notice" on February 6, 2017, informing plaintiffs that their loss mitigation application was incomplete and requesting that the following documentation be submitted by February 16, 2017:

• a Request for Transcript of Tax Return (IRS Form 4506-T) for each borrower with the notation "(Please fill out line 5 (roundpoint address) and check appropriate box of 6 on the enclosed copy of 4506-T.)";
• a copy of the last two months of bank statements for all checking, savings, money market and/or brokerage accounts held by each borrower, with the following notation "(STERLING: Please provide most recent 30 days Bank Statement for all bank accounts[.] Please provide all pages even if blank. Online banking printouts are not acceptable.)";
• doctor's certificate of illness/injury, medical bills, proof of monthly insurance benefits or government assistance, with the notation "(STERLING: Please provide Medical Bills or Doctor's Certificates as reason for your hardship is medical.)"; and
• a copy of the two most recent pay stubs showing year to date earnings with the notation, "(DEIRDRE: Please provide most recent 30 days pay stubs that show year to date earnings.)."

Ex. 2 (RFA No. 40), ECF No. 43-2 at 7-8, 35-38; Fink Aff. ¶ 19, Ex. J, ECF No. 43-1 at 68-70.

         On or around March 2, 2017, plaintiffs submitted a 16-page facsimile, consisting of: (1) a cover page, (2) bank statements for Deirdre Jennings reflecting three months, and comprising 14-pages; and (3) a 1-page form from Bon Secours Surgery Center at Virginia Beach providing information regarding Sterling Jenning's admission for shoulder surgery. Fink Aff. ¶ 20, Ex. K, ECF No. 43-1 at 72-87. RoundPoint sent plaintiffs an "Incomplete Information Notice" on March 6, 2017, informing plaintiffs that their application was incomplete and again requested:

• a Request for Transcript of Tax Return (IRS Form 4506-T) with the notation, "(Please fill out line 5 (roundpoint address) and check appropriate box of 6 on the enclosed copy of 4506-T.)";
• a copy of the last two months bank statements for all checking, savings, money market and/or brokerage accounts held by each borrower, with the following notation "(STERLING: Please provide most recent 30 days Bank Statement for all bank accounts[.] Please provide all pages even if blank. Online banking printouts are not acceptable.)";
• a copy of the two most recent pay stubs showing year to date earnings with the notation, "(DEIRDRE: Please provide most recent 30 days pay stubs that show ...

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