Harry v. Countrywide Home Loans Inc.
215 F. Supp. 3d 183
D. Mass.2016Background
- Thomas and Gretchen Harry refinanced their Mashpee, MA home in 2005 with Countrywide; mortgage was recorded in favor of MERS and later assigned to BNY Mellon; Ditech serviced the loan.
- Plaintiffs allege predatory lending, bait-and-switch interest terms, and failure to provide TILA rescission notice; they made payments through November 2009.
- Multiple foreclosure notices were sent beginning in 2011; Harmon Law Offices initiated foreclosure actions; plaintiffs sent a TILA rescission in March 2015.
- Plaintiffs filed suit in Massachusetts Superior Court in March 2016 asserting RICO, FDCPA, RESPA, TILA rescission, slander of title, Chapter 93A and fraud; defendants removed to federal court.
- Plaintiffs moved for a preliminary injunction in October 2016 to block an imminent foreclosure sale; the Court held a hearing and denied the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Likelihood of success on RICO and related claims | Plaintiffs contend lending and servicing scheme supports RICO, FDCPA, RESPA, TILA rescission, slander, fraud, and consumer-protection claims | Defendants argue claims are time-barred or inapplicable (e.g., FDCPA not aimed at enforcement of security interest) | Denied — most claims are barred by applicable statutes of limitation or inapplicable statutes |
| TILA rescission effect and timeliness | Plaintiffs assert March 2015 rescission voided the loan and supports injunction | Defendants assert rescission deadline passed (three-year limit) and rescission does not automatically void contract | Denied — rescission claim untimely and rescission does not automatically void the loan |
| Equitable tolling of statutes of limitation | Plaintiffs request tolling based on alleged misconduct and late discovery | Defendants assert plaintiffs had notice, counsel, and no excusable ignorance; defendants prejudiced by unpaid taxes/insurance | Denied — plaintiffs failed to show grounds for equitable tolling or diligence |
| Foreclosure barred by Massachusetts time-bar rules | Plaintiffs argue statute of limitations bars foreclosure enforcement | Defendants point to M.G.L. c. 260 §33 and that mortgage has not "matured"; acceleration on default does not mature a 30-year mortgage | Denied — foreclosure is not time-barred; mortgage term extends limitations until 2040 |
Key Cases Cited
- Jean v. Massachusetts State Police, 492 F.3d 24 (1st Cir.) (preliminary-injunction factors)
- Coquico, Inc. v. Rodriguez-Miranda, 562 F.3d 62 (1st Cir.) (likelihood of success weighs most heavily)
- In re Sheedy, 801 F.3d 12 (1st Cir.) (TILA rescission three-year limit)
- Large v. Conseco Fin. Servicing Corp., 292 F.3d 49 (1st Cir.) (rescission does not automatically void loan)
- Latson v. Plaza Home Mortg., Inc., 708 F.3d 324 (1st Cir.) (Chapter 93A limitations)
- Mercado v. Ritz-Carlton San Juan Hotel, Spa & Casino, 410 F.3d 41 (1st Cir.) (factors for equitable tolling)