Akar ex rel. Akar v. Federal National Mortgage Ass'n, 845 F. Supp. 2d 381

Background

Plaintiffs challenge Wells Fargo’s foreclosure of their Massachusetts-residence, alleging misrepresentations and multiple statutory violations to delay foreclosure.
Wells Fargo allegedly foreclosed while a loan modification request was pending and while asserting an assignment of the mortgage that the plaintiffs contest as invalid.
Fannie Mae is named as the successor owner; Harmon Law Offices and Northeast Abstract are alleged agents in the foreclosure chain.
Plaintiffs assert thirteen counts including TILA (Count I), FDCPA (Count II), wrongful foreclosure (Counts III, IV, VII), contract (Count V), promissory estoppel (Count VI), misrepresentation (Counts VIII, IX), trespass (Count X), IIED (Count XI), and Chapter 93A (Count XII).
The magistrate recommended some liability, but the district court partially adopted and partially rejected those recommendations, ultimately narrowing Wells Fargo’s and Fannie Mae’s liabilities on several counts.
The court emphasizes strict adherence to Massachusetts foreclosure statutes and considers post-foreclosure ownership transfers in evaluating claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Wells Fargo can be liable under TILA as an assignee	Wells Fargo as assignee may incur TILA liability if violation apparent on face of disclosures.	Wells Fargo is not a creditor and lacks initial liability; assignment liability requires face-of-disclosure defects.	Count I dismissed against Wells Fargo; no plausible face-of-disclosure or involuntary assignment showing liability.
Whether Wells Fargo and Fannie Mae had authority to foreclose given assignment timing	Foreclosure lacked valid assignment at initiation; Wells Fargo misrepresented authority to foreclose.	Wells Fargo had a valid assignment before notice and sale; Land Court proceedings under Servicemembers Act do not initiate foreclosure.	Counts III and IV dismissed for both; Wells Fargo had authority to foreclose under the posted notice once assignment occurred.
Whether promissory estoppel and misrepresentation theories survive	Promises to delay foreclosure induced reliance and forbearance; misrepresentations occurred.	Reliance and timing insufficient; promises contradict written notices; brief statements non-actionable.	Counts VI, VIII, IX survive; discovery permitted to develop whether promises were enforceable and relied upon.
Whether the 93A claim against Fannie Mae should be dismissed	Fannie Mae’s conduct was deceptive or unfair under 93A; 93A demand letters satisfied purposes.	Fannie Mae not a mortgagee; no deceptive practice by 93A standards.	Count XII against Fannie Mae dismissed; 93A claim survives against Wells Fargo subject to discovery.
Whether the IIED claim against Wells Fargo and Fannie Mae is viable	Foreclosure after repeated assurances not to foreclose constitutes extreme and outrageous conduct.	Foreclosure, even if improper, does not meet extreme/outrageous standard; plaintiffs should not recover for IIED.	Count XI: Fannie Mae dismissed; Wells Fargo denied as to IIED; discovery permitted to flesh out extreme conduct.

Key Cases Cited

U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637 (Mass. 2011) (strict adherence to notice and holder-of-mortgage requirements; authority to foreclose must be present at notice and sale)
Beaton v. Land Court, 367 Mass. 385 (Mass. 1975) (Servicemembers Act foreclosure actions are separate from ordinary foreclosure proceedings; no cloud on title if otherwise proper)
Foley v. Polaroid Corp., 400 Mass. 82 (Mass. 1987) (context for extreme and outrageous conduct standards in IIED claims)
Siegel v. Knott, 316 Mass. 526 (Mass. 1944) (oral modification of contract may be enforceable if it does not rewrite the contract’s rights)
O’Neil v. Daimler-Chrysler Corp., 538 F. Supp. 2d 304 (D. Mass. 2008) (elements and standards for IIED, including extreme and outrageous conduct requirement)