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Baker v. Nationstar Mortgage LLC

United States District Court, S.D. Ohio, Eastern Division

July 20, 2018

KIMBERLY BAKER, et al., Plaintiffs,
NATIONSTAR MORTGAGE LLC, et al., Defendants.

          Vascura Magistrate Judge.

          OPINION & ORDER


         This matter is before the Court on Cross-Motions for Summary Judgment - Defendants' Motion for Summary Judgment (ECF No. 36) and Plaintiffs' Motion for Summary Judgment (ECF No. 37). For the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Defendants' Motion and GRANTS IN PART AND DENIES IN PART Plaintiffs' Motion.

         I. BACKGROUND

         A. Factual Background

         In September of 1995, Plaintiffs Kimberly Baker and Dennis Baker executed a promissory note and mortgage to finance the purchase of their home, located at 4500 Edler Court, Hilliard Ohio (the “Property”). (ECF No. 37-1 at ¶¶ 3, 4). On May 22, 2008, Countrywide Home Loans, Inc. (“Countrywide”) filed a foreclosure action against the Bakers in the Franklin County Common Pleas Court. (ECF No. 36-4). The Bakers allege that the foreclosure action was the first notification they received from Countrywide that they were in default on their mortgage. (ECF No. 37-1 at ¶ 8).

         On September 21, 2009, the Common Pleas Court entered a judgment and decree of foreclosure for Countrywide (the “Foreclosure Judgement”). (ECF No. 36-1). The Court of Appeals affirmed the judgment on appeal. Countrywide Home Loans, Inc. v. Baker, 10th Dist. Franklin App. No. 09AP-968, 2010-Ohio-1329. Countrywide then assigned the mortgage to Defendant Aurora Loan Services LLC (“Aurora”), who was substituted as the plaintiff in the foreclosure action in place of Countrywide. (ECF No. 37-1 at ¶ 10).

         In May of 2012, the Property was auctioned off at a sheriff's sale. (Id. at ¶ 11). In July of 2012, Aurora transferred the servicing of the Bakers' mortgage loan to Defendant Nationstar Mortgage LLC (“Nationstar”). (Id. at ¶ 12). On August 9, 2012, Aurora assigned its auction bid to Nationstar. (ECF No. 36-2). A few days later, on August 13, 2012, the Common Pleas Court entered an order confirming the auction and ordering the sheriff to deed the Property to Nationstar (the “Confirmation Judgment”). (ECF No. 36-3). The sheriff did so, and the deed was recorded on September 11, 2012. (ECF No. 36-5). Nationstar then executed a deed to Defendant Secretary of Veterans Affairs (the “VA”), which was recorded on November 29, 2012. (ECF No. 36-6). The VA later recorded a deed that conveyed the Property back to Nationstar. (ECF No. 36-9).

         On February 28, 2013, the Common Pleas Court docketed an Agreed Entry Vacating Plaintiff's Judgment Entry & Decree of Foreclosure and Dismissing Its Complaint (ECF No. 37-5). The Agreed Entry stated that the Foreclosure Judgment “should be vacated on the grounds that Plaintiff's post-sale title investigation revealed multiple tax liens neither identified nor extinguished in the foreclosure.” (Id.). The parties agreed to dismiss the action without prejudice pursuant to Federal Rule of Civil Procedure 41(a). (Id.).

         After the Foreclosure Judgment was vacated, Nationstar began sending the Bakers mortgage statements and other correspondence. (ECF No. 37-1 at ¶ 14). The Bakers then hired counsel to address Nationstar's collection activity. (Id. at ¶ 15). The Bakers' counsel sent Nationstar a letter dated February 28, 2014 (the “Letter”). (ECF No. 37-6). The Letter states that the Bakers “dispute all late fees, charges, inspection fees, property appraisal fees, forced placed insurance charges, legal fees, and corporate advances charged” to the Bakers' account. (Id.). The Letter represents that the Bakers believe their account with Nationstar was “in error for the following reasons: the balance due is erroneous due to excessive fees and interest.” (Id.). The Letter then requested eight categories of information:

1. The name, address, and telephone number of the owner of the note, plus the name of the master servicer of the note.
2. The date that the current note holder acquired this mortgage note, and from whom it was acquired.
3. The date your firm began servicing the loan.
4. A complete payment history of how payments and charges were applied, including the amounts applied to principal, interest, escrow, and other charges.
5. The current interest rate on this loan and an accounting of any adjustments.
6. A statement of the amount necessary to reinstate this loan.
7. A complete copy of the loan closing documents, including a copy of the note and mortgage.
8. A copy of all appraisals, property inspections, and risk assessments completed for this account.


         Nationstar received the Letter on March 4, 2014, and sent a correspondence to the Bakers' counsel on March 6, 2014, acknowledging receipt of the Letter and stating that Nationstar was in the process of reviewing the Bakers' concerns. (ECF No. 1 at ¶ 85; ECF No. 36-8). Nationstar subsequently sent a response letter dated March 21, 2014 (the “Response”). (ECF No. 37-7). The Response stated that the owner of the note was Defendant Lehman Brothers Holdings, Inc. (“Lehman Brothers”) and that Nationstar was the servicer. (Id.). The Response included an address for Lehman Brothers and instructed the Bakers to contact Nationstar directly with any questions. (Id.). The Response stated that the “loan and related documents were reviewed and found to comply with all state and federal guidelines that regulate them.” (Id.). It further stated:

You asked us to provide Appraisal, property inspections, risk assessments, the current interest rate, which is 6%, and an accounting of any adjustments. Additionally, we normally provide Nationstar's Welcome letter and most recent Billing Statement, but after conducting an investigation, Nationstar is unable to locate the information you requested. This information is unavailable. However, we did review the account, and all transactions appear to be correct from our records review. If you think this is an error in the servicing of the account, please let us know so that we can investigate and resolve any potential servicing error.


         B. Procedural Background

         Plaintiffs Kimberly Baker and Dennis Baker initiated this action against Defendants Nationstar, Aurora, Lehman Brothers, and the VA on October 15, 2015, alleging violations of the Real Estate Settlement Procedures Act (“RESPA”) (Count I) and the Fair Debt Collection Practices Act (“FDCPA”) (Count V). (ECF No. 1). The Complaint seeks declaratory judgment and injunctive relief extinguishing any rights of Defendants to enforce the mortgage loan and prohibiting them from doing so (Counts II and IV). (Id.). The Complaint further seeks to quiet title to the Property in Plaintiffs' favor (Count III). (Id.).

         The VA filed an Answer on December 18, 2015, stating that the United States has no interest in the Property and requesting to be dismissed from the action. (ECF No. 7). Aurora, Lehman Brothers, and Nationstar (“Defendants”) filed an Answer to the Complaint on December 14, 2015. (ECF No. 5). Defendants filed a Motion for Summary Judgment on September 29, 2017. (ECF Nos. 36). On the same day, the Bakers filed a Motion for Summary Judgment as to liability only, seeking to schedule a trial to determine the amount of their damages. (ECF No. 37). The Motions for Summary Judgment are now ripe for decision.


         Federal Rule of Civil Procedure 56(a) provides, in relevant part, that summary judgment is appropriate “if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” In evaluating such a motion, the evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in the non-moving party's favor. United States Sec. & Exch. Comm'n v. Sierra Brokerage Servs., Inc., 712 F.3d 321, 327 (6th Cir. 2013) (citing Tysinger v. Police Dep't of City of Zanesville, 463 F.3d 569, 572 (6th Cir. 2006)). This Court then asks “whether ‘the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'” Patton v. Bearden, 8 F.3d 343, 346 (6th Cir. 1993) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 251-52 (1986)). “[S]ummary judgment will not lie if the dispute is about a material fact that is ‘genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248.

         III. ANALYSIS

         As an initial matter, the Court notes that Plaintiffs have never objected to the VA's request to be dismissed from this action (ECF No. 7), and the VA has not participated any further in this matter. The Court hereby DISMISSES the VA from the above-captioned matter. The claims alleged against the remaining Defendants are discussed in turn below.

         A. ...

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