Rachel Landau v. Roundpoint Mortgage Servicing Corporation
925 F.3d 1365
11th Cir.2019Background
- Landau fell behind on mortgage payments; a Florida court entered a final foreclosure judgment on Feb 3, 2016, including an order setting a foreclosure sale (ultimately set for Oct 5, 2016).
- While the sale date remained set, Landau submitted a complete loss-mitigation application and was approved for a six-month trial modification beginning Oct 1, 2016.
- After approval, the servicer (RoundPoint, through Random as movant) filed a motion to cancel and reschedule the Oct 5 sale rather than seek a new order authorizing sale.
- Landau filed an emergency motion in the foreclosure case asking the court to cancel, not reset, the sale; the court canceled the sale without setting a new date.
- Landau sent a Notice of Error under Regulation X and then sued, alleging RoundPoint violated 12 C.F.R. § 1024.41(g) by moving to reschedule the sale (which she contended was a forbidden motion for an "order of sale"). The district court dismissed; Landau appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a motion to reschedule a previously-ordered foreclosure sale constitutes a prohibited motion for "foreclosure judgment or order of sale" under 12 C.F.R. § 1024.41(g) | Rescheduling motion is functionally a motion for an "order of sale" and thus barred after a borrower submits a complete loss-mitigation application more than 37 days before sale | A rescheduling motion is a non-dispositive, housekeeping request that does not seek a new order authorizing sale; § 1024.41(g) bars only motions seeking foreclosure judgment/order of sale or conducting a sale | The Eleventh Circuit held a rescheduling motion is not a motion for an "order of sale" and therefore does not violate § 1024.41(g) |
| Whether the CFPB's interpretive commentary changes the outcome | Landau argued agency interpretation supports a broader reading | RoundPoint and the court argued the regulation is unambiguous; where language is clear agency commentary is not controlling and it actually distinguishes dispositive motions from housekeeping ones | Court declined to rely on CFPB commentary because the regulation is unambiguous and the commentary, properly read, aligns with the court’s interpretation |
| Whether servicer conduct here frustrated Regulation X’s consumer-protection purpose | Landau argued rescheduling improperly preserved foreclosure leverage and undermined protections | RoundPoint argued suspension/rescheduling while a borrower performs under a trial modification aligns with CFPB's expectation and protects industry practice of suspending sales | Court found invoking purpose counsels against Landau’s reading because treating rescheduling as forbidden would disincentivize servicers from offering loss-mitigation |
| Whether FDCPA claim survives if Regulation X claim fails | FDCPA claim was premised on the same underlying act violating Regulation X | RoundPoint contended FDCPA claim depends on a Regulation X violation and thus fails if that claim fails | Court dismissed FDCPA count because the Regulation X claim failed |
Key Cases Cited
- Henderson v. Washington Nat’l Ins. Co., 454 F.3d 1278 (11th Cir.) (standard for construing complaint on motion to dismiss)
- Feaz v. Wells Fargo Bank, N.A., 745 F.3d 1098 (11th Cir.) (framework for construing regulation language and context)
- Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003 (11th Cir.) (agency interpretation not considered when regulation is unambiguous)
- Renfroe v. Nationstar Mortg., 822 F.3d 1241 (11th Cir.) (discussing RESPA/Regulation X consumer-protection purpose)
- Owner-Operator Indep. Drivers Ass’n, Inc. v. Landstar Sys., 622 F.3d 1307 (11th Cir.) (de novo review of agency regulation interpretation)
- CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217 (11th Cir.) (use of dictionaries in textual construction)
- Allstate Mortg. Corp. of Fla. v. Strasser, 286 So. 2d 201 (Fla. Dist. Ct. App.) (judicial sale not final until confirmed by court)
- Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 563 U.S. 776 (U.S.) (discussion of common meaning of "of")