611 F. App'x 288
6th Cir.2015Background
- Campbell obtained a mortgage in 2006, defaulted, and applied for a loan modification with Nationstar in early 2013; Fannie Mae was involved as the investor/party related to FNMA programs.
- Nationstar (via servicer Trott & Trott) acknowledged receipt of her modification application and sent notices discussing the FNMA Apollo Trial Period and Michigan’s § 600.3205a meeting-rights; Nationstar also published foreclosure notices and purchased the property at a sheriff’s sale on July 11, 2013.
- Campbell did not redeem the property within Michigan’s six‑month statutory redemption period and filed suit after redemption lapsed, alleging violations of Michigan foreclosure‑notice law (§ 600.3205 series), RESPA/Regulation X (12 C.F.R. § 1024.41), negligence under HAMP, and illegal foreclosure.
- The district court dismissed all claims under Fed. R. Civ. P. 12(b)(6); Campbell appealed. The Sixth Circuit reviewed de novo and considered documents that were attached to or integral to the complaint.
- The court held Campbell failed to plead an irregularity in the foreclosure process or prejudice from any irregularity, concluded amended Regulation X (§ 1024.41) did not apply retroactively, and found no cognizable negligence duty under HAMP (nor causation).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court improperly converted the motion to dismiss into a summary‑judgment motion by considering documents outside the pleadings | Campbell: court relied on extra‑pleading documents she could not contest without discovery | Nationstar/Fannie Mae: documents were attached to/central to the complaint and thus properly considered | Held: Court properly considered exhibits integral to the complaint under Fed. R. Civ. P. 10(c) |
| Whether Michigan foreclosure statutes (§ 600.3205 et seq.) were violated so as to set aside the sheriff’s sale | Campbell: Nationstar failed to hold mandated meeting/consider modification and promised not to foreclose during review, so sale should be set aside | Defendants: any alleged defects were in loss‑mitigation, not in the foreclosure mechanics; Campbell failed to plead irregularity and prejudice; she missed redemption period | Held: Dismissed—alleged loss‑mitigation irregularities are not irregularities in the foreclosure process; Campbell did not plead prejudice and cannot now set aside a completed sale |
| Whether 12 C.F.R. § 1024.41 (Regulation X) applies retroactively to foreclosures completed before its Jan. 10, 2014 effective date | Campbell: § 1024.41 should apply to her case | Defendants: regulation was not effective until Jan. 10, 2014 and cannot be applied retroactively | Held: Dismissed—court applied Fernandez‑Vargas/Landgraf framework and found no intent for retroactivity; retroactive application would impose new duties/liabilities |
| Whether Fannie Mae owed a common‑law negligence duty under HAMP and whether breach caused foreclosure | Campbell: Fannie Mae owed a duty to comply with HAMP and breached it, causing foreclosure | Defendants: HAMP creates no private right/duty; plaintiff fails to plead duty, breach, or causation | Held: Dismissed—Michigan law does not recognize a HAMP‑based duty to borrowers; plaintiff also failed to plead causation/proximate cause |
Key Cases Cited
- Mayer v. Mylod, 988 F.2d 635 (6th Cir. 1993) (Rule 12(b)(6) purpose)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards; legal conclusions not presumed true)
- Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355 (6th Cir. 2013) (must show fraud/irregularity and prejudice to set aside sale)
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (retroactivity principles)
- Fernandez‑Vargas v. Gonzales, 548 U.S. 30 (2006) (two‑step test for retroactivity analysis)