Stagikas v. Saxon Mortgage Services, Inc.
795 F. Supp. 2d 129
D. Mass.2011Background
- Stagikas sued Saxon Mortgage Services, as servicer for Freddie Mac, over a Home Affordable Modification Program (HAMP) trial period plan (TPP) for a mortgage on his primary residence.
- Saxon and Stagikas signed a TPP after Stagikas fell behind on payments; the TPP required three trial payments and financial disclosures with the possibility of a permanent modification.
- Plaintiff alleges the TPP is a binding contract and Saxon breached it by failing to offer a permanent modification after the trial period.
- Saxon moved to dismiss for failure to state a claim, arguing lack of standing and lack of consideration to support the contract.
- Plaintiff also asserted Massachusetts Chapter 93A and FDCPA claims; the court addresses standing, contract validity, 93A, and FDCPA claims.
- The court denies the motion in part and grants it in part, ultimately dismissing the §1692f(6) claim while denying the rest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stagikas has standing to sue on a TPP. | Stagikas has a contractual right under the TPP to a permanent modification. | HAMP provides no private right of action and the TPP is not enforceable under state law. | Plaintiff has standing to pursue contract-based claims under the TPP. |
| Whether the TPP constitutes enforceable consideration-supported contract. | TPP imposes new detriments beyond the modified payments, creating consideration. | Modified payments alone are pre-existing obligations; no new consideration. | TPP is supported by consideration due to additional obligations (income verification, escrow, counseling, etc.). |
| Whether the 93A claim is sufficiently pleaded beyond mere contract breach. | Defendant induced reliance and failed to provide promised data, misleading actions. | A breach of contract is insufficient for 93A; need egregious conduct. | Adequate to survive at this stage; may require proof at later stage. |
| Whether contacting plaintiff while represented violated FDCPA §1692c. | Defendant sent communications after receiving counsel representation. | A single or limited number of communications may not violate §1692c. | Claim survives; §1692c may be violated if communications occurred after counsel was engaged. |
| Whether §1692f(6) barred foreclosure where TPP purported to suspend right to foreclose. | TPP suspended foreclosure during the trial period. | Foreclosure right persists post-TPP expiration under original loan documents. | §1692f(6) dismissal granted; foreclosure not barred by TPP after expiration. |
Key Cases Cited
- Wit v. Commercial Hotel Co., 253 Mass. 564 (Mass. 1925) (recognizes detriment requirement in contract formation under Massachusetts law)
- Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451 (Mass. 1991) (discusses deceptive acts under ch. 93A in breach contexts)
- Commercial Union Ins. Co. v. Seven Provinces Ins. Co., 217 F.3d 33 (1st Cir. 2000) (per se/egregious conduct concept in ch. 93A cited for unfairness)