Speleos v. BAC Home Loans Servicing, L.P.
824 F. Supp. 2d 226
D. Mass.2011Background
- Plaintiffs allege BAC foreclosed while their HAMP modification was pending and despite Department of the Treasury guidelines.
- Mortgage and ownership: loan originated 2007, MERS security, Fannie Mae owned the loan, BAC serviced and foreclosed.
- Foreclosure sale occurred August 5, 2010; BAC acted as foreclosing party; sale proceeds to BAC; later assigned to Fannie Mae.
- Plaintiffs sought rescission of sale, modification consideration, and damages including treble under Chapter 93A.
- Amended complaint added Count V (Chapter 93A claim) and kept Counts I (negligence), II (third-party breach), III (duty of good faith), IV (FDCPA).
- Court granted BAC/Fannie Mae motion to dismiss Counts II and III; denied for Counts I and V; OrlansMoran’s separate motion to dismiss granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BAC/Fannie Mae negligence claims survive | Speleos argues servicer owed duty and breached it | BAC/Fannie Mae contend no duty to borrowers | Counts I allowed against BAC/Fannie Mae; Count I dismissed as to OrlansMoran. |
| Whether BAC/Fannie Mae can be liable for third-party breach of contract | Speleos maintains breach through mortgage servicing | Defendants argue no third-party contract breach | Counts II and III dismissed as to BAC and Fannie Mae. |
| Whether OrlansMoran can be liable for negligence | OrlansMoran negligent in handling foreclosure | No duty owed to plaintiffs; conflict with BAC’s duty | Negligence claim dismissed against OrlansMoran; maintained against BAC/Fannie Mae. |
| Whether OrlansMoran violated the FDCPA | Foreclosure while modification pending violated FDCPA | Foreclosure activity may be outside FDCPA scope | Count IV dismissed as to general §1692f; potential §1692f(6) relief not applicable here. |
| Whether 93A claim lies for HAMP violation | HAMP violation deemed unfair/deceptive in itself | HAMP violation alone not enough unless unfair/deceptive | Count V denied, but issue discussed; 93A claim allowed if conduct unfair/deceptive and compatible with HAMP goals. |
| Whether dismissal of 93A claim is appropriate given HAMP framework | Court applied three-part Morris/Okoye framework; denied dismissal of 93A claim at this stage. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state plausible claims, not mere conclusory allegations)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applies to debt collectors who regularly engage in collection activity)
- Morris v. BAC Home Loans Servicing, L.P., 775 F. Supp. 2d 255 (D. Mass. 2011) (3-prong framework for 93A claims in HAMP context; some violations may be actionable)
- Hulse v. Ocwen Fed. Bank, FSB, 195 F. Supp. 2d 1188 (D. Or. 2002) (foreclosure not always debt collection; FDCPA scope depends on context)
- Stagikas v. Saxon Mortg. Servs., Inc., 795 F. Supp. 2d 129 (D. Mass. 2011) (discusses present right to possession and foreclosure feasibility under state law)
- Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47 (1st Cir. 2009) (unfairness/fairness standards under Chapter 93A; factors for unfairness analysis)