The opinion of the court was delivered by: Simandle, District Judge
The present action is born of an alleged foreclosure rescue scam, in which Plaintiff Barbara Johnson was lured into two sale transactions designed, in theory, to keep her in her home. Ultimately, she was evicted. Plaintiff seeks relief against all defendants for violations of the Truth-in-Lending Act ("TILA") as amended by the Home Ownership and Equity Protection Act ("HOEPA"), the New Jersey Consumer Fraud Act ("CFA"), as well as claims of fraud*fn1 and conspiracy/aiding and abetting (presumably in the commission of the other alleged violations).*fn2 Defendant NovaStar Mortgage, Inc. ("Defendant" or "NovaStar") has moved to dismiss [Docket Item 11] Plaintiff's amended complaint pursuant to Rule 12(b)(1), Fed. R. Civ. P., for lack of standing, and Rule 12(b)(6), Fed. R. Civ. P., as untimely and for failure to state a claim.*fn3 Defendant maintains that Plaintiff was not a consumer of NovaStar's credit services, offered during the second sale-leaseback transaction, because Plaintiff had previously sold her home to her daughter in the first sale transaction, and so Plaintiff lacks standing and cannot state a claim against NovaStar. Plaintiff responds that neither transaction was, in truth, a sale, but instead an equitable mortgage designed to help Plaintiff avoid foreclosure of her home.*fn4
The Court finds, as will be explained below, that Plaintiff has alleged sufficient facts to support her allegation that both sale-leaseback transactions in truth created two equitable mortgages, so that Plaintiff has stated a claim under the TILA and HOEPA as well as the CFA against NovaStar, and though any claims for statutory damages under TILA and HOEPA are untimely, she may continue her action for rescission of the second equitable mortgage under the TILA. Plaintiff may also pursue her claim for civil conspiracy against Defendant NovaStar.
On this motion to dismiss, the Court will take Plaintiff's factual allegations in her complaint to be true and construe all facts in her favor.
Sometime in 2005, Plaintiff fell behind on her mortgage payments for her home in Sicklerville, New Jersey, because injuries prevented her from working. (Am. Compl. ¶ 18.) Plaintiff learned from a friend about Rick Mason, who does business as Innovative Mortgage Solutions. (Id. ¶ 19.) Mason contacted Plaintiff and arranged a meeting with her, where he told Plaintiff that her credit score was too low for refinancing, but recommended that she sell her home to her daughter, Ravenda Dallah. (Id. ¶¶ 20-21.) Mason explained that he would broker a loan based on the equity in Plaintiff's home to pay Plaintiff's original mortgage until Plaintiff's credit score improved sufficiently for Plaintiff to qualify for a refinanced mortgage in her own name, at which time the home would be transferred back to Plaintiff's name. (Id. ¶ 21.)
Plaintiff accepted Mason's plan. On June 7, 2005, Plaintiff attended a closing with her daughter at Trinity Insurance Abstract, LLC, at which lender New Century closed a loan of $175,000 of which Plaintiff received roughly $20,000. (Id. ¶ 22.) Plaintiff signed over the deed to her daughter. (Id. ¶ 23.)
Plaintiff remained in the home with her daughter. (Id. ¶ 24.)
In April 2005 [apparently should be 2006], Plaintiff reached out to Mason, explaining that the funds from the first transaction were "running out" and that she wanted to pursue another loan. (Id. ¶ 25.) After some time, Mason responded and insisted that Plaintiff's credit score was still too low for a loan in her name. (Id. ¶ 26.) Instead, Mason suggested yet another "sale," this time to an "investor," once again until Plaintiff's credit score improved. (Id. ¶ 27.) To that end, Mason prepared a "lease purchase agreement" between Plaintiff and the investor, Terence Ward, and had Plaintiff sign the agreement. (Id. ¶¶ 27-28.)
On June 23, 2006, Plaintiff and her daughter attended a closing at Trinity's offices at which Defendant NovaStar closed a loan of $238,000. (Id. ¶ 29.) Plaintiff's daughter received approximately $10,000 and signed the deed to Ward. (Id. ¶ 29-30.) Ward, however, was not present at the closing and neither Plaintiff nor her daughter had met Ward. (Id. ¶ 31.)
The arrangement with NovaStar was orchestrated through Mason. (Id. ¶¶ 34-37.) Mason had a contact within NovaStar and that unnamed representative "ensured the above closing would proceed no matter the ability or intent of Ward to make payments on the property by, among other things, ensuring that an inflated appraisal was performed to obtain the necessary loan to value ratio to support the increased loan principal." (Id. ¶¶ 34-35.) NovaStar received application and commitment fees that were not disclosed to Plaintiff. (Id. ¶ 37.)
Plaintiff made monthly payments to NovaStar until approximately one year after the second sale-lease transaction.*fn5 (Id. ¶¶ 39-40.)
After Plaintiff stopped making those payments, Mason and an individual who Mason introduced as Ward arrived at Plaintiff's home and demanded that Plaintiff pay them $10,000 "to straighten out the arrears problem with Loan 2 that plaintiff was experiencing." (Id. ¶ 40.) Plaintiff apparently did not resolve the debt to NovaStar and in January 2008 NovaStar initiated foreclosure proceedings on the home against Ward. (Id. ¶ 42.) In August 2008, Plaintiff was evicted from her home. (Id. ¶ 43.)
Plaintiff alleges that she was the "implied borrower" from NovaStar. (Id. ¶ 36.) She states that she was not represented by counsel at either sale-lease transaction and that she believed both transactions were to enable her to keep her home. (Id. ¶¶ 44-45.) Plaintiff alleges that NovaStar's loan lacked necessary disclosures under the TILA, including Plaintiff's right to rescind the transaction, the amount financed and the finance charge. (Id. ¶ 54.)
On April 15, 2009, Plaintiff filed her initial complaint, which she subsequently amended on June 22, 2009. Subsequently, Defendant NovaStar filed the instant motion to dismiss Plaintiff's amended complaint. Plaintiff filed her opposition raising her argument ...