United States District Court, E.D. Wisconsin
DECISION AND ORDER
WILLIAM E. DUFFIN, U.S. MAGISTRATE JUDGE.
Facts and Procedural History
Scott Mikulski filed the present action against defendants
Wells Fargo Bank, N.A. (Wells Fargo), Selene Finance, LP
(Selene), and Premium Mortgage Acquisition Trust (the Trust),
alleging claims under the Real Estate Settlement Procedures
Act (RESPA), state common law, and Wisconsin Statute
§224.77(1), and seeking injunctive relief. (ECF No. 19.)
Defendants Selene and the Trust move for dismissal of the
action under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief can be granted.
(ECF No. 21.) The parties have fully briefed the motion,
which is ready for resolution. All parties have consented to
the full jurisdiction of a magistrate judge. (ECF Nos. 6, 13,
Fargo commenced a foreclosure action against Mikulski in
April of 2011 in Waukesha County Circuit Court. (ECF No. 19,
¶ 9.) The court entered a judgment of foreclosure in
October of 2011. (ECF No. 19, ¶ 10.) Mikulski
subsequently "attempted to cure any alleged default on
his home mortgage by filing for bankruptcy protection;
however, he was unable to cure those defaults." (ECF No.
19, ¶ 11.)
spring 2016 Mikulski submitted a loan modification
application to Wells Fargo and Selene, the servicer of the
loan. (ECF No. 19, ¶¶ 12-14.) Shortly thereafter
Mikulski received notice that he was denied a loan
modification. (ECF No. 19, ¶ 15.) Believing incorrect
information was used in analyzing his eligibility for a loan
modification, Mikulski, by his attorney, sent a letter dated
August 4, 2016, to Selene, purporting to provide Selene with
the "correct" information and asking to have his
application re-run. (ECF No. 19, ¶ 19; see also
ECF No. 21-4.) Mikulski alleges that Selene never responded
to or investigated this inquiry. (ECF No. 19, ¶¶
alleged failure to respond or investigate Mikulski's
inquiry of August 4, 2016, forms the basis of Count I of
Mikulski's First Amended Complaint. (ECF No. 19.)
Mikulski's allegations that Wells Fargo and Selene used
incorrect information and improperly analyzed his loan
modification application, and that all defendants improperly
acted to sell Mikulski's home at a sheriff's sale,
form the bases of Counts II, Ill. and IV. (ECF No. 19.) In
response to the motion to dismiss, Mikulski concedes that his
third cause of action applies only to Wells Fargo (ECF No. 23
at 9), a defendant who has not moved for dismissal.
Motion to Dismiss Standard
survive a motion to dismiss under Rule 12(b)(6), a complaint
must provide enough factual information to 'state a claim
to relief that is plausible on its face' and 'raise a
right to relief above the speculative level.'"
Thulin v. Shopko Stores Operating Co., 771 F.3d 994,
997 (7th Cir. 2014) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 570 (2007)). The court
accepts as true all well-pleaded facts and then determines
whether the facts give rise to an entitlement of relief.
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
Home Affordable Mortgage Program (HAMP) emerged as a result
of Congress's "response to rapidly deteriorating
financial market conditions in the late summer and early fall
of 2008." Wigod v. Wells Fargo Bank, N.A., 673
F.3d 547, 556 (7th Cir. 2012). The Secretary of the Treasury
created the program to encourage home loan servicers to
modify loans of qualifying homeowners who were in danger of
default. Id. Although HAMP created obligations upon
participating loan servicers, it did not create a private
right of action whereby homeowners could sue servicers for
violations of HAMP guidelines. Id. at 559, n.4.
Thus, Mikulski does not allege that the defendants'
violation of HAMP guidelines directly gives rise to a cause
of action. (ECF No. 23 at 1.) Rather, Mikulski asserts that
"[d]efendants, by violating HAMP Guidelines, have
violated other state and federal laws." (ECF No. 23 at
moving defendants contend that Mikulski is effectively
attempting to bring a private right of action under HAMP by
"retraining" a violation of HAMP guidelines as
various other legal claims. (ECF No. 21 at 6.) But the moving
defendants' argument represents a rehashing of the
"end-run" argument rejected by the court in
Wigod. See Id. at 581-86. In Wigod, in
addition to making various preemption arguments, Wells Fargo
argued that the plaintiff's state law claims were an
impermissible "end-run" around the fact that
Congress did not create a private cause of action under HAMP.
Id. at 576-86. Referring to this argument as
"novel, " the court found it to be without legal
support. Id. at 581. "The absence of a private
right of action from a federal statute provides no reason to
dismiss a claim under a state law just because it refers to
or incorporates some element of the federal law."
Wigod, 673 F.3d at 581.
example, Wisconsin created a private right of action against
a mortgage banker who "[v]iolate[es] any ... federal or
state statute, rule, or regulation that relates to practice
as a mortgage banker ...." Wis.Stat. §
224.77(1)(k). Although Congress chose not to create a private
right of action for violations of HAMP, Wisconsin seemingly
did essentially just that. Therefore, the court rejects the
contention that Mikulski's claims are barred on the
ground that each represents an impermissible attempt to
create a private right of action under HAMP. Accordingly, the
court finds it necessary to address the merits of each claim
Mikulski raises as to the moving defendants.
The RE SPA Claim
First Cause of Action in the First Amended Complaint alleges
"Violations of RESPA, 12 U.S.C. §§ 2605(e)(1)
and (2)." Specifically, it alleges that "Selene did
not properly analyze and assess Milulski's loss
mitigation application, in that Selene (among other problems)
used incorrect information to determine Mikulski's
modification eligibility." (ECF No. 19, ¶ 26.) It
alleges that the August 4, 2016 letter was a qualified
written request (QWR) under RESPA (¶ 27), that
Selene's failure to respond to the QWR violated 12 U.S.C.
§ 2605(e)(2) (¶ 30), and that Mikulski suffered
damages "as a result of the denial of a loan
modification." (ECF No. 19, ¶ 31.) The First
Amended Complaint does not allege that the Trust (or Wells
Fargo) violated RESPA. Therefore, as to this claim the only
defendant is Selene.
is "written correspondence (other than notices on a
payment coupon or similar documents) from the borrower or her
agent that requests information or states reasons for the
borrower's belief that the account is in error. 12 U.S.C.
§ 2605(e)(1)(B). To qualify, the written request must
also include the name and account of the borrower or must
enable the servicer to identify them. Id." Catalan
v. GMAC Mortg. Corp., 629 F.3d 676, 680 (7th Cir. 2011).
United States Court of Appeals for the Seventh Circuit has
held that no "magic language" is required before a
servicer must recognize written correspondence as a QWR
requiring a timely response. Catalan, 629 F.3d at
687. Thus, correspondence need not contain the phrase
"qualified written request." Baehl v. Bank of
Am., N.A., No. 3:12-cv-00029-RLY-WGH, 2013 U.S. Dist.
LEXIS 46445, at *10 (S.D. Ind. Mar. 25, 2013) (citing
Vician v. Wells Fargo Home Mortg., No. 2:05-cv-144,
2006 U.S. Dist. LEXIS 26141, 2006 WL 694740, at *4 (N.D. Ind.
Mar. 16, 2006)). ...