John Lage v. Ocwen Loan Servicing LLC
2016 U.S. App. LEXIS 18264
| 11th Cir. | 2016Background
- John Lage and Maria Mantilla (Borrowers) submitted a loss mitigation application to servicer Ocwen on January 8, 2014 while a judicial foreclosure sale was scheduled for January 29, 2014.
- Borrowers provided additional documents (including a paystub) and on January 27 the application became facially/actually complete, two days before the scheduled sale.
- Ocwen postponed the sale on January 28 to March 14; Ocwen nonetheless continued to request documents and ultimately denied the modification as untimely. Sale occurred March 14.
- Borrowers filed suit under RESPA/Regulation X, alleging (1) Ocwen failed to evaluate their loss mitigation application within the 30-day review period required by 12 C.F.R. §1024.41 and (2) Ocwen provided an inadequate response to their notice of error in violation of 12 C.F.R. §1024.35.
- District court granted summary judgment to Ocwen; on appeal the Eleventh Circuit affirmed, holding (a) the servicer’s duty to evaluate is triggered only if the servicer received a complete application more than 37 days before the foreclosure sale as scheduled when the application was received, and (b) Borrowers failed to prove actual damages or a pattern-or-practice necessary for statutory RESPA damages from the notice-of-error response.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ocwen had a duty under 12 C.F.R. §1024.41 to evaluate the Borrowers’ complete loss mitigation application | Borrowers: their application was timely because Ocwen later rescheduled the sale to more than 37 days after completeness, so Ocwen had a duty to evaluate | Ocwen: timeliness is measured by the date the foreclosure was scheduled when the complete application was received; application was submitted within 37 days so no duty | Held: Timeliness is measured as of the scheduled foreclosure date when the complete application was received; application was untimely and Ocwen had no duty to evaluate (affirmed). |
| Whether Borrowers proved damages from Ocwen’s allegedly inadequate response to their notice of error under 12 C.F.R. §1024.35 and 12 U.S.C. §2605 | Borrowers: Ocwen’s template response shows systemic, nonresponsive practice and supports statutory damages | Ocwen: single inadequate response without evidence of other violations cannot establish pattern-or-practice or actual damages | Held: Damages are essential; Borrowers produced no actual damages and no evidence of a pattern-or-practice (single template letter insufficient). Summary judgment affirmed. |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment standard for genuine dispute of material fact)
- Christensen v. Harris Cty., 529 U.S. 576 (2000) (limits deference to agency interpretations where regulation is unambiguous)
- Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241 (11th Cir. 2008) (avoid interpretations that render regulatory language superfluous)
- Likes v. DHL Express (USA), Inc., 787 F.3d 1096 (11th Cir. 2015) (standard of review for summary judgment)
- Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241 (11th Cir. 2016) (RESPA damages require actual damages or statutory damages for pattern-or-practice)