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Moore v. Wells Fargo Home Mortgage

United States District Court, W.D. Wisconsin

February 15, 2018




         Plaintiffs Terrence and Dixie Moore assert claims against defendant Wells Fargo Home Mortgage, the servicer of their home mortgage, for violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605, and Wis.Stat. § 244.71. Before the court is defendant's motion for summary judgment. (Dkt. #13.) Because the undisputed facts foreclose a finding that Wells Fargo violated RESPA or Wisconsin state law, or even that the Moores were injured by any alleged violation, the court will grant the motion, enter judgment in defendant's favor, and close this case.


         A. The Parties

         Plaintiffs purchased the home that is the subject of the underlying mortgage in 2006. Oddly, at least in this day and age (not to mention in a joint property state), plaintiff Dixie Moore is not on the formally recorded warranty deed to the property, nor a party to the note, mortgage or most recent loan modification agreement. Nevertheless, plaintiffs contend that they purchased the home using money Dixie inherited when her mother passed away, along with Terrance's $208, 050.00 purchase money mortgage.[2]

         The defendant is Wells Fargo Home Mortgage. Wells Fargo is the servicer of Terrence Moore's home mortgage for all times pertinent to plaintiffs' claims. Relevant to the description of the foreclosure action, the owner of the mortgage is Deutsche Bank National Trust Company.

         B. 2011 Loan Modification

         Terrence entered into a loan modification with an effective date of February 1, 2011. While defendant disputes any “legal effect, ” the 2011 loan modification incorrectly identified Wells Fargo as the “lender” on the loan. (Def.'s Resp. to Pls.' Add'l PFOFs (dkt. #27) ¶ 4.) The 2011 modification set the new principal of the loan at $272, 481.95, which purportedly consisted of “the unpaid amount(s) loaned to Borrower by Lender plus any interest and other amounts capitalized.” (Piotrowski Suppl. Aff., Ex. 1 (dkt. #28-1) pp.3637.) The modification also extended the term of the loan to 40 years, from the prior 30 years.[3] Finally, the modification required a first payment of $1, 190.31, due on March 1, 2011.

         C. State Court Foreclosure Action and Bankruptcy Proceedings

         In June 2011, Deutsche Bank National Trust Company filed a foreclosure action against plaintiff Terrence Moore and “Jane Doe” Moore in Dane County Circuit Court. Deutsche Bank Nat'l Trust Co. v. Moore, No. 2011CV002758 (Wis. Dane Cty. June 15, 2011). (See also Piotrowski Aff., Ex. A (dkt. #16-1).)[4] Although Jane Doe was later identified as Dixie, she was never added as a party because she was never formally a party to the loan documents, and therefore could not be held personally liable for any amount adjudged due from Terrence to Deutsche Bank.

         This same mortgage loan had previously been the subject of two loan repayment agreements, an earlier loan modification agreement and the negotiated dismissal of a 2008 foreclosure action. The 2011 foreclosure action was also briefly suspended but then reopened after efforts to mitigate the default failed. The state court entered an order of judgment of foreclosure in November 2012, which provided, among other things, a six-month redemption period, allowing for repurchase of the foreclosed home.

         With the consent of the state court, Deutsche Bank scheduled the property for a sheriff's sale on June 4, 2013, but then agreed to numerous continuances, adjourning the sale to December 3, 2013. During this time, Deutsche Bank worked with Terrance in an attempt to negotiate a resolution, including mediation efforts through the Dane County Foreclosure Program in May 2013 and a further review for yet another loan modification in July 2013. The parties, however, failed to reach any agreement.

         In November 2013, Moore then filed for bankruptcy resulting in an automatic stay of the state court foreclosure proceedings. In re Moore, No. 13-15492-rdm (Bankr. W.D. Wis. Nov. 12, 2013). (See Piotrowski Aff., Ex. E (dkt. #16-5).) While this stay was in place, defendant Wells Fargo and Moore negotiated another modified payment arrangement by stipulation, which was entered in the bankruptcy record in June 2015. (See Piotrowski Aff., Ex. D (dkt. #16-4) 36-38.) Under that agreement, Moore was to pay Wells Fargo a lump sum payment of $9, 000 on or before June 30, 2015, and then resume monthly mortgage payments in July 2015. After Moore failed to make the $9, 000 payment, Deutsche Bank sought and was granted relief from the automatic stay in December 2015. The sheriff's sale was subsequently rescheduled for March 22, 2016.

         In response, Moore converted his Chapter 13 bankruptcy to a Chapter 7 bankruptcy on March 10, 2016, resulting in another cancellation of the sale. On July 13, 2016, the bankruptcy court entered a discharge action. With the state court's approval, Deutsche Bank again rescheduled a sheriff's sale for October 11, 2016.

         D. Inquiry and Response

         On August 18, 2016, Wells Fargo's Customer Care and Recovery Group (“CCRG”) received a written communication from Terrence regarding Loan No. 0155269822 (“the Inquiry”). (Golden Aff., Ex. 1 (dkt. #15-1).) Moore contends that this Inquiry was a “Qualified Written Request” within the meaning of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605(e) The Inquiry, dated August 10 and signed by Terrance on August 15, 2016, provides Terrance's account of the history of his loan since 2011, then states “[a]s a result, I do not know the current status of my mortgage, or how I can reinstate or modify it or bring it current, who my homeowners' insurance is through, or even who is responsible for making decisions on my loan or managing my escrow account.” (Id. at 2.) Terrance also proceeded to list 22 separate requests for information, including: identities of the current and all prior owners and servicers of the loan; an account of all funds placed into or paid out of escrow; any other payments on the loan; an identification of each and every modification, forbearance, forgiveness, reinstatement, or other debt-relief or mortgage-relief program for which he had been considered, specifically referencing a Home Affordable Modification program (“HAMP”); a copy of every notice of transfer of servicing rights or transfer of ownership ever sent to him, a copy of every denial of eligibility, and a copy of every notice of acceleration, default, or intent to foreclose ever sent to him. (Id. at 2-3.)

         On August 18, 2016, CCRG commenced research on the issues raised in the Inquiry. Around that same time, CCRG also called Terrance to confirm his contact information and advise that Wells Fargo estimated a September 1 resolution date. Between August 19 and August 29, CCRG investigated and initiated research by other departments to address Terrance's concerns raised in the Inquiry. On September 1, CCRG advised Terrance in a telephone message that Wells Fargo's research was continuing and estimated the projected response date would now be September 16. CCRG also attempted to reach Terrance at a second designated telephone number and to reach an authorized third party, Law Advisors. Although neither proved successful, CCRG's efforts continued. On September 16, CCRG again advised Terrance via telephone that its research was continuing and extended the projected response date to September 30 -- 11 days from the state court sanctioned foreclosure sale by the Dane County Sheriff.

         As promised, Wells Fargo sent Terrance a three-page response, with 58 pages of attachments, dated September 30, 2016 (“the Response”). (Golden Aff., Ex. 2 (dkt. #15-2).) That same day, CCRG also advised Terrance by telephone that it had completed its research and response and would send that response to him by mail with supporting documents attached. Among other requests, the Response itself: (1) described the current status of his loan, including the most recent modification review; (2) provided an overview of the bankruptcy stipulation agreement, an explanation of insurance premiums, and information validating the loan; and (3) included copies of the note and mortgage, identification of Wells Fargo as the servicer and Deutsche Bank as the owner, along with other attachments covering the account history. (Id. at 1-3.) Moreover, CCRG mailed that response to Terrance at the correct mailing address.

         Plaintiffs now contend that the Response to the QWR did not answer many of Terrance's questions. Defendant agrees that the response “did not provide all of the information demanded by Moore, particularly with respect to his extensive requests for information not related to servicing -- e.g., pertaining to his eligibility for and Well Fargo's processing of his applications for loan modification (e.g., Requests Nos. 12-16 & 21) -- and excessively broad demands for information (e.g., Requests Nos. 8-9).” (Def.'s Resp. to Pls.' Add'l PFOFs (dkt. #27) ¶ 28.) Indeed, the Response stated, “We're unable to provide any further information because your remaining requests are too broad. If you provide us with more specific details about what you're seeking, we'll review your request again.” (Golden Aff., Ex. 2 (dkt. #15-2) 3.)

         E. Return to State Court and Bankruptcy Court

         While CCRG was preparing a response, on September 28, 2016, Terrance also filed a motion in Dane County Circuit Court seeking to avoid or delay the sale indefinitely “to allow him to litigate his counterclaims maturing after pleading.” (Piotrowski Aff., Ex. G (dkt. #16-7).) That same day, Terrance also asserted counterclaims against Deutsche Bank and/or Wells Fargo under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(e), and Wis.Stat. § 224.77, for failing to: (1) “approve Moore for loan modification (or by approving him for an ‘incorrect' modification)”; and (2) “timely and adequately address his Inquiry.” (Def.'s PFOFs (dkt. #17) ¶ 44; see also Piotrowski Aff., Ex. A (dkt. #16-1) p.7 (describing counterclaim filed 9/28/16).) Still on September 28, plaintiffs similarly filed the present federal action, asserting the same RESPA and state law violations against Wells Fargo. (Compl. (dkt. #1).)

         Defendant does not dispute that Moore filed these counterclaims in the state foreclosure action and this federal lawsuit before the response deadline under RESPA had expired. (Pls.' Resp. to Def.'s PFOFs (dkt. #19) ¶ 45.) In response to Terrance's motion in state court, Deutsche Bank filed an objection, asserting several grounds. The state court held a hearing on Terrance's motion to stay and on defendant's objection to the filing of counterclaims on November 23, 2016, during which it declined to allow the untimely amendment of the counterclaims and denied the motion to further stay the sheriff's sale. (Piotrowski Aff., Ex. A (dkt. #16-1) p.8 (describing oral ruling that “Bank is entitled to foreclosure, bank can proceed with sheriff's sale, it will not be stayed. Court denies any other outstanding motions.”).)

         Deutsche Bank conducted the actual sheriff's sale on November 29, 2016. Deutsche Bank, however, was prevented from obtaining an order confirming sheriff's sale when Terrance filed yet another petition for bankruptcy on December 27, 2016. See In re Moore, No. 16-14280-cjf (Bankr. W.D. Wis. Dec. 27, 2016). That bankruptcy petition remains ...

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