Tate v. Freedom Mortgage Corporation, 6:22-cv-01922

Background

Plaintiff Joseph A. Tate (borrower) sues Freedom Mortgage under RESPA §2605 and Oregon UTPA, alleging improper servicing and wrongful adverse credit reporting after submitting QWRs.
Loan originated in 2007; servicer transferred to Freedom in April 2016; plaintiff alleges timely payments and escrow misallocations by Freedom.
Plaintiff sent two QWRs (June 2020 and July 2022). Freedom acknowledged receipt but allegedly failed to reasonably investigate and furnished disputed adverse payment information to credit reporting agencies within the 60‑day period required by RESPA/regulation.
Alleged harms: economic damages (denial of credit, higher interest offers, foregone purchases), postage costs for resending QWR, and emotional distress; plaintiff also seeks statutory damages under §2605(f) based on an asserted “pattern or practice,” citing CFPB consumer complaints.
Procedural posture: Freedom moved to dismiss and to strike class allegations and certain pleadings. Court granted in part and denied in part: dismissed emotional‑distress RESPA damages and UTPA claim as to certain servicing fees; allowed claims for postage and credit‑reporting economic harms and RESPA statutory damages at pleading stage; denied motions to strike class allegations and pleadings as premature.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether emotional‑distress constitutes “actual damages” under RESPA §2605(f)	Emotional distress from adverse reporting is recoverable as actual damages.	Noneconomic harms are not "actual damages" under §2605(f).	Court: Emotional‑distress damages fail to plead "actual damages"; dismissed.
Whether postage and negative credit reporting plead recoverable actual damages under RESPA	Postage for second QWR was caused by Freedom’s failure to correct earlier errors; adverse reporting caused denial/high‑rate credit offers and lost purchases.	Postage is not proximately caused by reporting; negative reports alone are insufficient.	Court: Postage plausibly traceable and survives; negative reporting plus alleged credit denial/high rates/foregone purchases suffices to plead actual damages; survives.
Whether plaintiff plausibly alleged a "pattern or practice" to recover additional statutory damages under §2605(f)	Allegations about plaintiff plus multiple CFPB complaints plausibly show pattern or practice.	Two QWR incidents + CFPB complaints are insufficient or unreliable to plead a pattern or practice.	Court: At motion‑to‑dismiss stage, pleading is adequate to plausibly allege a pattern or practice; survives.
Whether plaintiff stated an ascertainable loss under Oregon UTPA	Postage and allegedly charged fees are monetary losses caused by defendant’s unlawful acts.	No ascertainable loss of money/property alleged; UTPA claim fails.	Court: Postage is an ascertainable loss and UTPA claim survives to seek statutory damages; claims for alleged servicing fees fail for lack of sufficient factual pleading.
Whether class allegations and pleadings should be stricken pre‑discovery	Class is appropriate and meets Rule 23 prerequisites; CFPB complaints support common issues.	Class is overbroad, raises individualized issues and is premature; strike class allegations and certain pleadings.	Court: Motions to strike class allegations and pleadings denied as premature (without prejudice to later challenge); 12(f) motion denied.

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a claim that is plausible on its face)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (courts accept factual allegations but not legal conclusions at pleading stage)
Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241 (11th Cir. 2016) (discussing §2605(f) pattern or practice theory for statutory damages)
Pearson v. Phillip Morris, Inc., 358 Or. 88 (2015) (UTPA requires an ascertainable loss of money or property)
Paul v. Providence Health Sys. Or., 351 Or. 587 (2012) (dismissing UTPA claims lacking compensable damages)