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Mannarino v. Ocwen Loan Servicing, LLC

United States District Court, D. New Jersey

March 28, 2018

ANNA MANNARINO, Plaintiff,
v.
OCWEN LOAN SERVICING, LLC, Defendants.

          MEMORANDUM AND ORDER

          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court on Defendant Ocwen Loan Servicing, LLC's motion to dismiss Plaintiff Anna Mannarino's Complaint (ECF 6). For the reasons discussed herein, Defendant's motion is denied.

         In this action, Plaintiff alleges that Ocwen failed to exercise reasonable diligence in reviewing her loss mitigation application regarding Plaintiffs home mortgage loan, and failed to timely respond to Plaintiffs three Notice of Errors in violation of the Real Estate Settlement Procedures Act (RESPA), and Regulation X. See 12 C.F.R. § 1024, et seq.

         I.

         Plaintiff Anna Mannarino owns the property located at 131 Crawfords Corner Road, Holmdel, New Jersey 07773 (hereinafter, the "Property"). (Compl. at ¶ 1; see ECF 1). Plaintiff defaulted under the loan and mortgagee and Deutsche Bank National Trust Company ("Deutsche") commenced a Foreclosure Action in the Superior Court of New Jersey on August 13, 2012. (ECF No. 1-1 Ex. A, Foreclosure Docket) (referred to as "Lawsuit 1").

         On October 16, 2014, Plaintiff filed a separate suit against Deutsche in the Superior Court of New Jersey, alleging the same defenses and claims asserted in the Foreclosure Action. (ECF 6- 5). Thereafter, Deutsche removed the case to this Court (referred to as "Lawsuit 2"). See Mannarino v. Deutsche Bank National Trust Company, et al, 3:14-cv-07771 (MAS-TJB)

         In Lawsuit 1, the Final Judgment of Foreclosure was entered against Plaintiff on December 12, 2014. (Id. at ¶23).

         On September 14, 2015, in Lawsuit 2, the Court granted Deutsche's motion to dismiss pursuant to Fed.R.Civ.P. Rule 12(b)(6) with prejudice; and without a right to amend the Complaint. (ECF 6-6).

         In Lawsuit 1, Deutsche proceeded to execute on the property and scheduled a sheriffs sale for December 5, 2016 on the Property. (Compl. at ¶ 24; ECF 6-4). Plaintiff stayed the sheriffs sale until January 9, 2017. (Compl. at ¶ 25, ECF 1-3.)

         In Lawsuit 1, Ocwen serviced Plaintiffs mortgage loan and was responsible for assessing Mannarino's loss mitigation applications, and other mortgage relief options that were undertaken to avoid a judicial sale of the property. (Compl. at ¶ 3-4).

         On April 14, 2017 Plaintiff instituted this suit against Ocwen (referred to as "Lawsuit 3"). Plaintiff alleges that Ocwen is a "debt collector" under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §1692a(6). (Compl. at ¶¶ 3-4, 13). Moreover, Plaintiff alleges her note and mortgage is a "federally related mortgage loan" as that term is defined by 12 C.F.R. § 1024.2(b). (Compl. at ¶ 17). This means that Ocwen must comply with Regulation X and other RESPA provisions. As such, Ocwen did not fall within an exception for "small servicers" (12 C.F.R. §1026.41(e)(4)) or the exemption for a "qualified lender" (12 C.F.R. §617.700). (Compl. at ¶18).

         The Complaint alleges that the last date to apply for the Home Affordable Modification Program ("HAMP") was December 31, 2016. (Compl. at ¶ 29; ECF 1-4); and a borrower was required to submit an "Initial Package" on or before December 30, 2016. See, Making Home Affordable Supplemental Directive 16-02. (Compl. at ¶ 30; ECF 1-4). Plaintiff alleges she submitted the documents required of an Initial Package (Loss Mitigation Application), including some additional forms (RMA Form, Form 4506-T or 4506 T-EZ) as evidence of income, and Dodd-Frank certification. (Compl. at ¶ 31; ECF 1-5). Within the Loss Mitigation Application, Plaintiff included a profit and loss statement for her business from the period of January 1, 2016, to October 31, 2016. (Compl. at ¶ 27). On November 28, 2016, Plaintiff submitted a Loss Mitigation Application to Ocwen via email and facsimile. (Compl. at ¶ 26; ECF 1-3).

         On November 29, 2016, Defendant sent Plaintiff correspondence informing Plaintiff that Ocwen was "unable to offer a Home Affordable Modification because ... the confirmed foreclosure sale date was within seven business days, " which is an exception to the HAMP program. Despite same, Defendant continued to review the Loss Mitigation Application because it realized that the Loss Mitigation Application was submitted more than seven business days before the foreclosure sale. (Compl. at ¶ 34).

         Thereafter, on December 9, 2016, Defendant confirmed receipt of the Loss Mitigation Application and requested that Plaintiff submit a profit and loss statement. (Compl. at ¶ 35; ECF 1 -7). Despite the fact that Plaintiff had already submitted a profit and loss statement with her initial Application, on December 21, 2016, Plaintiff re-submitted the profit and loss statement to Ocwen via mail. (Compl. at ¶ 36). Evidently, Defendant received this mailing on December 27, 2016 (Id.), and Plaintiff again submitted the Profit and Loss statement to Defendant via facsimile the next day. (Compl. ¶ 36; ECF Nos. 1-8, 1-9).

         On January 4, 2017, Plaintiffs attorney spoke with a representative (Niral) of Ocwen. Niral advised Plaintiffs attorney that Ocwen had not received the profit and loss statement; and Defendant would not review Plaintiffs Loss Mitigation Application because a complete package was not received by December 30, 2016. (Compl. at ¶ 37; ECF Nos. 1-8, 1-9). On the same date, Plaintiff submitted the profit and loss statement to Niral via email. (Compl. at ¶ 38; ECF 1-10).

         On January 5, 2017, Plaintiffs counsel filed a First Notice of Error to Defendant via mail, which Defendant received on January 9, 2017. (Compl. ¶ 39-40; ECF Nos. 1-11, 1-12). This Notice informed Defendant that the profit and loss statement was previously submitted to Defendant via facsimile and email and that Defendant had committed a servicing violation by providing false information to Plaintiff regarding the actual date on which the profit and loss statement was received. 12 C.F.R. § 1024.35. (Compl. at ¶ 41; ECF Nos. 1-8, 1-9, 1-11).

         On January 24, 2017, Ocwen, confirmed receipt of the First Notice of Error, and informed Plaintiff: "We have determined additional time is required to review the details pertaining to your specific request... [if] we are unable to respond within the 30-day anticipated timeline. Under [RESPA], we are afforded an additional 15 days to complete our research and provide a response." (Compl. at ¶42; ECF 1-13).

         On February 1, 2017, Plaintiffs attorney spoke with a representative (Sabarish) of Ocwen. Sabarish informed Plaintiffs attorney that Defendant had not received the profit and loss statement. (Compl. at ¶ 43; ECF Nos. 1-8, 1-9, 1-10). Plaintiffs attorney refuted Sabarish's representation by advising that the profit and loss statement had been submitted three times through facsimile, email, and mail. Id. Later, Sabarish confirmed ...


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