Ward v. Security Atlantic Mortgage Electronic Registration Systems, Inc.
858 F. Supp. 2d 561
E.D.N.C.2012Background
- Plaintiffs, proceeding pro se, filed on March 23, 2010 seeking damages and declaratory relief under TILA, HOEPA, RESPA, FCRA, ECOA, and FTCA related to a September 11, 2007 deed of trust securing a $153,315 loan to SAM in Raleigh, NC.
- Amended complaint [DE-15] names SAM, BAC, and MERS and attaches four exhibits (QWR, Notice of Removal, Notice of Right to Cancel, and Notice of Insufficient Validation).
- Court previously dismissed most claims in a February 2011 order and gave plaintiffs 21 days to amend, with SAM dismissed for failure to receive service; BAC and MERS were allowed to proceed with amendment.
- Defendants BAC and MERS moved to dismiss the amended complaint [DE-17]; plaintiffs responded [DE-25], and defendants replied [DE-27].
- This order grants the motion to dismiss, dismisses most claims with prejudice, denies certain rescission-related relief, and allows a second amended complaint solely for rescission with tender allegations within 14 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TILA liability of BAC and MERS as creditors/assignees | Plaintiffs contend BAC/MERS are creditors/assignees under TILA. | Defendants argue they are not creditors/assignees liable under TILA. | BAC plausibly an assignee; MERS not liable for damages; standing issues unresolved for MERS. |
| RESPA notice and QWR adequacy against BAC | Plaintiffs allege failure to provide notice 15 days before transfer and failure to respond to a QWR. | Notice issues relate to transferor, not BAC; QWR not properly pleaded. | 2605(c) claim against BAC dismissed with prejudice; March 2010 QWR not valid; no RESPA damages shown. |
| Rescission rights and tender requirement under TILA | Plaintiffs seek rescission within three years and damages for non-response to rescission. | Defendants argue improper tender and equity considerations; rescission may require tender. | Rescission claim dismissed with leave to amend to allege ability to tender; no automatic rescission without tender. |
| HOEPA, FCRA, ECOA, FTCA and punitive damages claims viability | Plaintiffs rely on these statutes for damages or relief. | Claims are deficient or non-viable as pled. | HOEPA claim dismissed with prejudice; FCRA/ECOA/FTCA/punitive damages dismissed with prejudice. |
Key Cases Cited
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (U.S. 1998) (require meaningful disclosures under TILA)
- Ford Motor Credit Co. v. Milhollin, 444 U.S. 555 (U.S. 1980) (TILA disclosure obligations for creditors)
- Twombly, 550 U.S. 544 (S. Ct. 2007) (pleading must state plausible claims; avoid mere labels)
- Iqbal, 556 U.S. 662 (S. Ct. 2009) (conclusory assertions insufficient without factual support)
- Shelton v. BAC Home Loans Servicing, LP, 486 F.3d 815 (4th Cir. 2007) (equitable rescission and tender considerations in TILA cases)
- Yamamoto v. Bank of N.Y., 329 F.3d 1167 (9th Cir. 2003) (equitable conditions may govern rescission process)
- Carrington v. HSBC Bank USA, N.A., 760 F.Supp.2d 589 (E.D. Va. 2010) (rescission viability against assignee; equity-oriented considerations)
- Frazile v. EMC Mortg. Corp., 382 Fed.Appx. 833 (11th Cir. 2010) (provision on RESPA and 2605 claims; damages considerations)