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Young v. Wells Fargo Bank, N.A.

United States Court of Appeals, First Circuit

July 5, 2016

SUSAN K. YOUNG, Plaintiff, Appellant,
v.
WELLS FARGO BANK, N.A., as Trustee for Option One Mortgage Loan Trust 2007-CP1, Asset Backed Certificates, Series 2007-CP1; HOMEWARD RESIDENTIAL, INC., f/k/a American Home Mortgage Servicing, Inc., Defendants, Appellees.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Leo T. Sorokin, U.S. District Judge]

          Anthony Alva, for appellant.

          Marissa I. Delinks, with whom Maura K. McKelvey and Hinshaw & Culbertson LLP were on brief, for appellees.

          Before Howard, Chief Judge, Torruella and Barron, Circuit Judges.

          TORRUELLA, Circuit Judge.

         Plaintiff-appellant Susan K. Young, previously before us after her action was dismissed under Federal Rule of Civil Procedure 12(b)(6), Young v. Wells Fargo Bank, N.A. (Young I), 717 F.3d 224 (1st Cir. 2013), again attempts to avert the foreclosure of her home after seeking a mortgage modification under the Home Affordable Modification Program ("HAMP"). We had vacated the district court's dismissal of her claims for breach of contract, unfair debt collection under Massachusetts General Laws ch. 93A ("Chapter 93A"), and derivative equitable relief. Id. at 242. We found that Young adequately pled a breach of contract by alleging that the defendants failed to offer her a mortgage modification in a timely manner, and that she had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of defendants-appellees Wells Fargo Bank, N.A. ("Wells Fargo") and Homeward Residential, Inc. ("Homeward")[1] on Young's remaining claims. She now appeals. We affirm.

         I.

         A. Factual Background

         For purposes of summary judgment, we recite the facts in the light most favorable to Young as the nonmoving party. See Collazo v. Nicholson, 535 F.3d 41, 43 (1st Cir. 2008).

         Young bought the property where she built her home in Yarmouth Port, Massachusetts, in September of 1997. Nine years later, in September of 2006, she refinanced the property, obtaining an adjustable rate mortgage ("ARM") of $282, 000. Wells Fargo is the trustee of the trust that holds her mortgage and Homeward the loan servicer.

         Faced with financial difficulties, Young fell behind on her mortgage payments in 2007 and 2008. In August of 2008, she noticed a mortgage payment for $2, 600 that she sent Homeward had not been processed. At that time, she also received a notice on her door stating that her mortgage payment was late, but that she could ignore the notice if she had made the payment. Young called Homeward and learned that Homeward refused to process her payment because her account was in foreclosure.

         Young asked Homeward how she could avoid foreclosure. After much back and forth, Homeward offered to send Young a forbearance agreement if she submitted an upfront payment of $5, 628.42 before September 5. Young did so and, when she did not receive the promised agreement, called Homeward on September 8. A representative told Young, "there is no agreement." Young then spoke to a supervisor, Maryann Connor, who informed her that, had her check for $2, 600 been processed in August of 2008, her account never would have been put into foreclosure. Connor also told Young that Homeward "was handling this situation incorrectly and [was] at fault for not processing the agreement."

         Homeward faxed Young a forbearance agreement on September 10, 2008. The agreement provided that "the total sum necessary to bring the Loan current" was $10, 738.41 and required, among other things, that Young make monthly payments of $3, 144.32 (whereas her mortgage provided for initial monthly payments of $2, 030.03). Young worried that she could not afford the increased monthly payments but nevertheless signed the agreement that same day. Young tried to discuss the agreement with Connor but was unable to reach her. Young feared that, if she did not sign the forbearance agreement immediately, Homeward would refuse to work with her.

         Young struggled to make payments under the forbearance agreement. Several months after signing the agreement, Young consulted with various lawyers and learned that a mortgage modification may be available through HAMP, a federal program that provides incentives for loan servicers and lenders to give permanent loan modifications to struggling homeowners.[2] With the help of a paralegal, Jerry DeSalvatore, she applied for a HAMP modification. On October 6, 2009, Homeward sent Young a letter indicating that she was eligible for a mortgage modification through HAMP. The letter indicated that Young needed to comply with a Trial Period Plan ("TPP") to receive a HAMP modification. The TPP required, among other things, that she make three payments of $1, 368.94 on or before November 1, 2009, December 1, 2009, and January 1, 2010. According to the TPP, Young would receive a mortgage modification for which her first payment would be due "on the first day of the month following the month in which the last Trial Period Payment is due, " or February 1, 2010.

         Young sent her December payment on November 30, 2009, and it was received by Homeward on December 2, 2009. She sent her January payment December 30, 2009, and it was received on January 2, 2010. She included a cover letter with her January payment indicating that she "expect[ed] the final modification agreement to be sent . . . by February 1, 2010 without further delay, as per our agreement." On January 13, 2010, Young received a letter indicating that she was "ineligible for a HAMP modification" because her payments were untimely under the TPP. The letter stated that Homeward had "not receive[d] all Trial Period Plan payments on or before the 30th day from the due date of the last Trial Period Plan payment." On February 14, 2010, Young received a notification informing her that the interest rate on her mortgage was scheduled to change with her payment due April 1, 2010 (the "ARM Change Notification").

         On February 17, 2010, DeSalvatore called Homeward to contest the January letter deeming Young ineligible for a HAMP modification. He spoke with a Homeward representative named Diane, who "admitted that the letter of rejection was a mistake" and explained that "the loan modification should be at [Young's] door within three to four weeks." DeSalvatore sent a follow-up letter to Diane the next day confirming the conversation and explaining that "Young [would] make her February payment ...


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