United States District Court, D. Maine
ORDER ON THE PARTIES' CROSS-MOTIONS FOR SUMMARY
JUDGMENT AND PLAINTIFF'S MOTION TO SUPPLEMENT THE FIRST
TORRESEN, UNITED STATES CHIEF DISTRICT JUDGE
action, Plaintiff April Benner (“Ms.
Benner”) asserts claims against Defendants
Specialized Loan Servicing, LLC
(“SLS”) and Wells Fargo Bank,
N.A., in its capacity as Trustee for the Certificate Holders
of the MASTR Asset-Backed Securities Trust 2007-NCW, Mortgage
Pass-Through Certificates, Series 2007-NCW
(“Wells Fargo”), arising out of
the Defendants' purported mishandling of her mortgage
loan modification applications. Ms. Benner alleges that the
Defendants' conduct violated the Real Estate Settlement
Procedures Act (“RESPA”), the
Maine Unfair Trade Practices Act
(“UTPA”), and the Maine Consumer
Credit Code (“MCCC”). Before me
are the parties' cross-motions for summary judgment (ECF
Nos. 66, 78) and Ms. Benner's motion to supplement her
First Amended Complaint (ECF No. 70)
(“Pl.'s MTS”). For the
reasons set out below I GRANT IN PART and
DENY IN PART the Defendants' motion for
summary judgment, and I DENY Ms.
Benner's motion for summary judgment and Ms. Benner's
motion to supplement.
February 22, 2007, Ms. Benner and her now ex-husband Robie
Benner (“Mr. Benner”) executed a
promissory note with a principal balance of $204, 000 payable
to New Century Mortgage Corporation. SMF ¶ 1. The note
was secured by a mortgage on real property located at 683
Main Street, Bowdoin, Maine (the
“Property”). SMF ¶ 2. Ms.
Benner and Mr. Benner were legally divorced via a Judgment
for Divorce dated September 24, 2012. SMF ¶ 12. Mr.
Benner transferred his interest in the Property to Ms. Benner
at the time of their divorce. Ex. 44 (ECF No. 62-3).
all times relevant here, Wells Fargo has served as the
mortgagee of record on behalf of the promissory note-holders,
the Certificate Holders of the MASTR Asset-Backed Securities
Trust 2007-NCW, Mortgage Pass-Through Certificates, Series
2007-NCW. SMF ¶¶ 3, 4, 211. Wells Fargo acts as
mortgagee in its capacity as trustee. SMF ¶¶ 3-4.
Since June 1, 2015, SLS has serviced Ms. Benner's
mortgage loan as the sole servicer on behalf of Wells Fargo.
SMF ¶¶ 5, 6, 7.
Servicing and Loss Mitigation History
Benner and Mr. Benner defaulted on their mortgage loan in
April 2011 and remained in default thereafter. SMF ¶ 11;
see SMF ¶ 13. On May 13, 2014, Wells Fargo
filed a foreclosure action against Ms. Benner and her
ex-husband in state court. SMF ¶ 22. The parties entered
into Maine's Foreclosure Diversion Program, and the
foreclosure action was put on hold. SMF ¶ 23.
August 2014, Ms. Benner submitted a loan modification
application to Select Portfolio Servicing, Inc.
(“SPS”), which had been the
servicer for Ms. Benner's loan since December 1, 2012.
SMF ¶¶ 8, 25. Between January 2015 and May 2015,
SPS solicited and Ms. Benner provided additional information
and documents in support of her application for the loan
modification. SMF ¶¶ 30, 32. During that time, SPS
twice indicated to Ms. Benner that it had received a complete
application and that it would review her loan for a potential
modification. SMF ¶¶ 26, 31. On both occasions, SPS
then determined that Ms. Benner was eligible only for a
proprietary Bank of America modification. SMF ¶¶
27, 28, 31. Because that modification was less
favorable than modifications available under the Home
Affordable Modification Program
(“HAMP”), SPS did not offer Ms.
Benner the proprietary modification and instead continued to
review her application to see if she could qualify for a
better modification. SMF ¶¶ 29, 31.
this time, Wells Fargo, SPS, Ms. Benner, and Mr. Benner
remained engaged in foreclosure mediation. SMF ¶ 34. Ms.
Benner was represented in the mediation free of charge by a
loan modification advocate named Jason Thomas
(“Mr. Thomas”). SMF ¶ 35.
In May 2015, she also retained an attorney, Andrea Bopp Stark
(“Ms. Stark”). SMF ¶ 36. On
May 29, 2015, SPS deemed Ms. Benner's application
complete for a third time. SMF ¶ 33.
Servicing Transfer to SLS
June 1, 2015, SPS transferred servicing of Ms. Benner's
loan to SLS as part of a larger servicing transfer of 2, 450
loans. SMF ¶¶ 37, 39. It is SLS's practice to
send transferor servicers a set of Servicing Transfer
Instructions ahead of any servicing transfer. See
SMF ¶ 38; Ex. 28 at 18 (ECF No. 60-7). The instructions
ask the transferor to provide SLS with all documents
associated with the transferred loans and to inform SLS if
any of the transferred loans had a pending loan modification
application. SMF ¶ 38; Ex. C at 19-21 (ECF No. 64-3).
The instructions also ask the transferor to certify that it
has sent SLS a complete servicing file for all transferred
loans, including borrower-submitted loss mitigation
documents. See SOF ¶ 38; Ex. 9 at 2 (ECF No.
57-8). SPS signed the required certification on May 29, 2015.
SMF ¶ 39.
“slightly before” June 1, 2015, SPS sent a
spreadsheet to SLS that contained information for all 2, 450
of the service-transferred loans. SMF ¶ 45; Ward Depo.
Tr. at 36:7-20 (ECF No. 61). The spreadsheet included the
following series of entries related to Ms. Benner's loan:
Workout Status Name
Workout Type Name
Is Opt Out
Reason Display Name
Complete Package Review
Not Currently Unemployed
Complete Package Review
Not Currently Unemployed
Complete Package Review
HAMP Tier 1 Trial Mod
HAMP-Escrow payment exceeds 31% payment
Complete Package Review
HAMP Tier 2 Trial Mod
HAMP-DTI Outside of Acceptable range
Complete Package Review
BAC Trial Mod
Complete Package Review
Financials Do Not Support
(ECF No. 57-7). The spreadsheet indicates that Ms. Benner was
reviewed for but denied multiple HAMP and other
modifications. SMF ¶ 46. The spreadsheet also shows that
SPS was “Processing” a workout for Ms. Benner for
a product called a “BAC Trial Mod.” SMF ¶
of a series of “document dumps” (mass transfers
of files) on June 3, 2015, June 28, 2015, and July 8, 2015,
SLS received from SPS certain documents that Ms. Benner had
submitted to SPS in support of her loan modification
application. See SMF ¶¶ 43, 48. However,
SLS did not receive what it considered a complete loan
modification application from Ms. Benner. See SMF
¶ 41; Ex. 28 at 7 (ECF No. 60-7). Specifically, SLS did
not receive a Request for Mortgage Assistance
(“RMA”) from each person who
could contribute to repaying Ms. Benner's loan. SMF
¶ 44. SLS did not contact SPS to request any additional
documents for Ms. Benner. SMF ¶ 165.
June 8, 2015 Mediation Session
the servicing transfer, the parties to Ms. Benner's
foreclosure action had scheduled a mediation session for June
8, 2015. SMF ¶ 54. On June 2, 2015, Ms. Benner's
loss mitigation counselor, Mr. Thomas, informed her attorney,
Ms. Stark, that SPS had transferred servicing to SLS and that
he did not expect SLS to attend the June 8th session or to
have any information on the loan until mid-June 2015. SMF
¶ 55. Mr. Thomas suggested that Ms. Benner should
nevertheless attend the mediation in order to make a case for
mediation non-compliance against SPS and Wells Fargo. SMF
Benner did attend the mediation session, missing half a day
of work and travelling to West Bath, Maine in order to do so.
SMF ¶ 160. SLS did not appear at the mediation session.
SMF ¶ 161. The mediator contacted SLS by phone during
the mediation. SMF ¶ 161. Finding that neither SPS nor
SLS was prepared to meaningfully participate in the mediation
session, the mediator entered a report of non-compliance
against Wells Fargo. SMF ¶ 162.
Ms. Benner's First Purported Qualified Written
18, 2015, Ms. Benner, through Ms. Stark, sent a letter to
SLS. SMF ¶ 142. The letter purported to notify SLS of
errors SPS had committed in handling Ms. Benner's loss
mitigation applications. SMF ¶ 143. The letter also
requested “an immediate determination and explanation
for any denial of all loss mitigation options including
modifications under the DOJ, HAMP, and any in-house programs
on Ms. Benner's loan, ” and requested certain
documents related to Ms. Benner's loan history. SMF
¶ 143; Ex. 24 at 2-4 (ECF No. 60-3).
received the letter on June 23, 2015 and acknowledged receipt
on June 26, 2015. SMF ¶¶ 145, 146. By letter dated
June 30, 2015 and mailed to Ms. Stark, SLS responded more
fully and provided documents including a copy of Ms.
Benner's promissory note, a copy of the deed of trust, a
welcome letter, payment history and transaction codes, and
the previous servicer's payment history. SMF ¶ 147.
Ms. Benner's Loss Mitigation Applications to SLS
Application Transferred from SPS
20, 2015, SLS sent a letter to Ms. Benner and Mr. Benner that
informed them they were delinquent on their loan and that
asked them to contact SLS to discuss possible loss mitigation
options. SMF ¶ 63.
29, 2015, SLS sent a letter to Ms. Benner care of Ms. Stark.
SMF ¶ 64. The letter stated that on June 28, 2015, the
date of SPS's second file transfer to SLS, SLS had
received nine documents that could support a loan
modification application for Ms. Benner. SMF ¶ 65. The
letter also listed several additional documents that SLS
believed it needed in order to review Ms. Benner for a
modification. SMF ¶ 65. Specifically, the letter asked
Ms. Benner to submit an RMA form, Dodd-Frank Certification,
and Hardship Verification from all “financial
contributors” on the loan by July 29, 2015. SMF ¶
66. The letter contained descriptions of the requested forms,
and directed Ms. Benner or her attorney to contact SLS if
they had any questions. SMF ¶ 67. The letter did not
define the term “financial contributor.” SMF
15, 2015, SLS sent a letter to Ms. Stark to inform her that
SLS still needed the documents requested in its June 29th
letter. SMF ¶ 68.
August 5, 2015, SLS informed Ms. Benner and Mr. Benner that
it was unable to review them for modification options because
they had not provided all requested documents. SMF ¶ 72.
August 20, 2015 Application
August 6, 2015, SLS sent Ms. Benner a HAMP solicitation
letter asking her for a new loss mitigation application. SMF
¶ 181. Mr. Thomas prepared a loss mitigation application
for Ms. Benner, and, on August 20, 2015, Ms. Stark submitted
the application to SLS. SMF ¶¶ 79, 182.
afternoon, SLS informed Doonan, Graves & Longoria
(“Doonan Graves”), Wells
Fargo's counsel in the foreclosure suit, that it had
reviewed the documents that Ms. Benner's counsel had
provided earlier that day. SMF ¶ 82; see SMF
¶ 73. SLS noted that it had follow-up legal questions
and that it would need additional information and documents
from Ms. Benner. SMF ¶ 82. Doonan Graves then emailed
Mr. Thomas and Ms. Stark to describe what information SLS
still needed and why, which included (i) two months proof of
receipt for all rental income along with either bank
statements marking each deposit of rent or cancelled checks;
(ii) a mortgage statement for a rental property; (iii) signed
and dated tax returns or a 4506-T form from Ms. Benner's
grandmother Edith Rossignol (“Ms.
Rossignol”); and (iv) a corrected letter of
explanation regarding the discrepancy between Ms.
Benner's stated gross wages and her paystubs. Ex. 18 at
8-9 (ECF No. 59-7); see also SMF ¶ 83. The
email also requested “a copy of the court entered
divorce decree . . . [o]r something from the court indicating
that no appeal had been taken and therefore the decree
provided is final.” Ex. 18 at 9.
August 24, 2015, SLS wrote to Ms. Stark, requesting the
following documents by September 23, 2015:
• From Mr. Benner, one of the following: (i)
“4506T and Unemployment Benefits - Proof of Receipt,
” (ii) “4506T and Unemployment Benefits, ”
(iii) “Tax Returns/Tax Transcripts and Unemployment
Benefits - Proof of Receipt, ” or (iv)
“Unemployment Benefits and Tax Returns/Tax
• From Ms. Benner, one of the following: (i)
“Mortgage Statement” or (ii) “Mortgage
Statement and Rental Income - Proof of Receipt.”
• From Ms. Rossignol, a “Contributor Credit
Authorization” and one of the following: (i)
“Mortgage Statement and Tax Returns/Tax Transcripts,
” or (ii) “Rental Income/Lease Agreement and
Mortgage Statement and Rental Income - Proof of
See Ex. 17 at 31 (ECF No. 59-6); SMF ¶ 84.
September 10, 2015, SLS sent another letter to Ms. Benner,
care of Ms. Stark, which noted that SLS had not received the
information requested in its August 24th letter and which
gave Ms. Benner until September 25, 2015, to submit those
documents. SMF ¶ 88. On the same day, Doonan Graves
emailed Mr. Thomas and Ms. Stark to explain that SLS still
needed certain documents “to complete the underwriting
review, ” including (i) a “signed/dated complete
Contributor Credit Authorization;” (ii) a
“Mortgage Statement for non-subject property to show
current and escrow account verification;” (iii) a
“judge executed Divorce Decree with Property award
clause;” and (iv) “2 more consecutive weekly
paystubs for the borrower [because] (paystubs received were
not consecutive and did not cover a FULL 30 days).” Ex.
19 at 39 (ECF No. 59-8); see also SMF ¶ 89. Ms.
Stark instructed Ms. Benner to submit these documents to SLS
“ASAP.” SMF ¶ 90.
September 23, 2015, Mr. Thomas emailed several documents to
Doonan Graves on Ms. Benner's behalf. SMF ¶ 98.
These included (i) a letter explaining Ms. Benner's
income sources; (ii) a contributor credit authorization form
for Ms. Rossignol; (iii) paystubs from Ms. Benner's new
job and from her time at L.L. Bean; (iv) two months of bank
statements; (v) a 4506-T form for Ms. Rossignol; (vi) four
rental receipts; (vii) a mortgage statement for Ms.
Benner's rental property; and (viii) her judgment for
divorce and quitclaim deed. SMF ¶ 190.
September 29, 2015, SLS sent a letter to Ms. Stark that
requested the same documents listed in SLS's letters of
August 24 and September 10, 2015, as well as an RMA for all
financial contributors, to be provided by October 14, 2015.
SMF ¶ 99.
early October of 2015, Bendett & McHugh replaced Doonan
Graves as Wells Fargo's foreclosure counsel in Ms.
Benner's action. SMF ¶ 101. On October 16, 2015,
Bendett & McHugh emailed Ms. Benner's counsel to
inform her that:
[T]he following docs are needed to proceed with loss
-Please indicate on the submitted Bank statements the SSI
income in August and September, so that we can understand
which income corresponds to which source.
-Please provide a LOE as to (1) why the SSI amounts vary, and
(2) please state that income is deposited for Edith into
April's account (just so it is fully documented).
-Please provide proof of residency for Edith since her bank
statements show a PO box (ie: third party documentation will
be needed such as driver license/utility bill).
Ex. 12 at 2 (ECF No. 59-1); see SMF ¶¶
three days later, on October 19, 2015, SLS sent another
letter to Ms. Stark, which stated that SLS was unable to
review Ms. Benner and Mr. Benner for a modification because
SLS had not received required documents. SMF ¶ 100. SLS
has testified that it issued the October 19, 2015, denial
letter because Ms. Benner had not submitted the requested
August and September 2015 bank statements flagging her social
security income, evidence that Ms. Rossignol's rental
income was deposited into Ms. Benner's bank account, or
the requested RMAs from financial contributors. SMF ¶
192 (citing Ward Depo. Tr. at 118:2-123:10).
October 20, 2015, SLS sent Ms. Benner a new HAMP solicitation
letter. SMF ¶ 198. On October 21, 2015, Mr. Thomas
emailed Ms. Stark with “the three documents requested
by [Bendett & McHugh].” SMF ¶ 104; Ex. 18 at
75. Ms. Stark suggested several changes to bring those
documents in line with Bendett & McHugh's requests.
SMF ¶ 105. The parties do not dispute that Ms. Benner
submitted additional documents October 23, 2015, but neither
party has presented evidence of whether those documents
incorporated Ms. Stark's suggestions. SMF ¶¶
October 26, 2015, SLS sent a letter to Ms. Stark to inform
her that SLS was still missing RMAs from all financial
contributors to the loan and a contributor credit
authorization from Ms. Rossignol. SMF ¶ 106. SLS asked
Ms. Benner to provide those documents by November 25, 2015.
SMF ¶ 107.
November 2, 2015, Bendett & McHugh emailed Mr. Thomas and
Ms. Stark that SLS needed paystubs from Ms. Benner's
former employer, L.L. Bean, for the full month of August
2015. SMF ¶ 109. On November 5, 2015, Mr. Thomas emailed
Bendett & McHugh to explain that Ms. Benner did not work
for L.L. Bean at the end of August 2015, and therefore had no
L.L. Bean paystubs for August 14, 2015 or August 21, 2015.
SMF ¶ 111. Bendett & McHugh responded by email
the same day to ask whether Ms. Benner had any additional
paystubs from L.L. Bean, as SLS was trying to utilize an
exception for non-consecutive paystubs but needed to have a
full 30 days of paystubs from some time period in order to do
so. SMF ¶ 112. On November 6, 2015, Ms. Stark responded
to Bendett & McHugh by email, telling them that SLS
already had Ms. Benner's paystubs from June 12 through
August 26, 2015 and reattaching those paystubs as reference.