United States District Court, D. New Jersey
ANDREW S. HEYMAN and GEULA HEYMAN, Plaintiffs,
CITIMORTGAGE, INC., Defendant.
KEVIN McNULTY, District Judge.
Two homeowners, Andrew and Geula Heyman (the "Heymans"), have brought this action against their mortgage lender, Citimortgage, Inc. ("Citi"). The Heymans asked Citi to modify the terms of their loan pursuant to a federal program called the Home Affordable Mortgage Program ("HAMP"). To be approved for a loan modification, the couple made four "trial payments" to the bank to demonstrate their ability to follow the proposed modified terms. Citi accepted those payments and modified the loan. The Heymans complain that the modified loan did not comply with HAMP and was not affordable. They also complain that one of the trial payments was not "count[edr toward their "payment history." Complaint, ECF No. 1 ("Compl.") ¶ 43.
Citi has filed a motion to dismiss under Rules 12(b)(6), Fed. R. Civ. P., arguing that the Complaint fails to state a claim that meets the pleading standards of Rules 8(a) and 9(b). See Brief in Support of Defendant Citimortgage, Inc.'s Motion to Dismiss, ECF No. 6-1 ("Mot."). One can imagine valid claims arising from the situation the Heymans have posited in their Complaint. The allegations of this Complaint, however, are too vague and conclusory to put the defendant on notice as to the precise claim that the plaintiffs are alleging. The motion to dismiss will be granted without prejudice to the filing of a properly pleaded amended complaint.
The plaintiffs, Andrew and Geula Heyman, obtained a mortgage loan from Citi to purchase their home. Compl. ¶¶ 5-6. In November of 2012, the Heymans asked Citi to modify the terms of the loan. Id. ¶ 9 The Heymans allege that they were eligible to have their loan modified under a federal program called the Home Affordable Modification Plan. Id. ¶ 11. HAMP is a federal program administered by the Department of the Treasury and the Department of Housing and Urban Development. It is designed to help distressed homeowners avoid foreclosure. Sinclair v. Citi Mortgage, Inc., 519 F.Appx. 737, 738 (3d Cir. 2013); Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 554 (7th Cir. 2012). Under HAMP, participating lenders are required to modify the terms of loans for borrowers that meet certain criteria. Wigod, 673 F.3d at 556-57. If they do, the loan servicer will calculate new terms and draft a modified loan agreement. Id. at 557. The borrower and servicer then enter into a "trial period" of three months or more. Id. During that period, the borrower makes payments in accordance with the proposed loan modification. Id. If the borrower meets all of its obligations during the trial period, the proposed loan modification becomes effective. Id.
According to the Heymans, in May of 2013, "Citi approved Plaintiffs for trial payments" under HAMP. Compl. ¶ 19. The Heymans report that they made a total of four payments. Id. ¶¶ 20, 25, 27. Citi deemed one payment to be "too early" to be counted as a trial period payment. Id. ¶¶ 23-24. The other three payments were counted as trial period payments. Citi then "offered a permanent modification to Plaintiffs." Id. ¶ 27.
A. The Complaint
The Complaint contains two counts. Count One alleges that Citi engaged in wrongful collection practices. Compl., ¶ 39-44. No specific debt collection law is cited. However, the Heymans appear to be alleging that Citi committed wrongful collection practices in two ways: (1) by failing to count one of the Heymans' payments toward their "payment history, " id. ¶ 43; and (2) by offering and accepting payments under a modification plan that did not comply with HAMP and "did not help plaintiffs." Id. ¶¶ 41, 42.
Count Two alleges that Citi's conduct constitutes fraud. Id. ¶¶ 45-49. Count Two does not cite any statute; the Heymans may have intended to allege common law fraud. (Citi assumed as much in its motion to dismiss, and the Heymans' papers have not stated otherwise.). See Mot., 6; Plaintiff's Brief in Response to Defendant's Motion to Dismiss, ECF No. 8 ("Opp."), 4-7. The Heymans appear to argue that Citi induced the Heymans to make payments under a modification plan that Citi knew plaintiffs could not afford, and that did not comply with HAMP. Citi also induced the Heymans to make one payment of $3, 438.76, then failed to "count" the payment towards the Heymans'"payment history. Id. ¶ 43. In doing so, the Heymans allege, Citi committed fraud. Id. ¶¶ 45-49.
The Complaint also makes a number of stray allegations, including "wrongful indebtedness, wrongful collection on a mortgage, slander of title, slander of credit, unjust enrichment and other rights and remedies." Id. ¶ 1. These are not alleged as separate counts, and there is no further elaboration.
B. Citi's Motion to Dismiss
Citi has moved to dismiss the Heyman's complaint as to both counts with prejudice. With respect to Count One (wrongful collection practice), Citi suggests that the plaintiffs' complaint could be attempting to state a claim under either of two statutes: HAMP, or the Federal Debt Collection Practices Act. Mot., 4. The Complaint, Citi argues, fails to state a claim under either statute. With respect to Count Two (fraud), Citi argues that the complaint does not meet the pleading requirements of FED. R. Civ. P. 9(b). That rule requires a plaintiff to state "with particularity the circumstances constituting fraud or mistake." Citi argues that the Heyman's allegations are too general to satisfy this standard.
A. The Heymans have not properly stated a claim for ...