Jubelt v. United Mortg. Bankers, Ltd.

JOHN JUBELT, Plaintiff, v. UNITED MORTGAGE BANKERS, LTD., et al., Defendants.

Civil Action No. 13-7150 (ES) (MAH)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

June 30, 2015

NOT FOR PUBLICATION

OPINION & ORDER

SALAS, DISTRICT JUDGE

I. INTRODUCTION

This action arises out of a residential loan refinancing transaction entered into by Plaintiff John Jubelt. Before the Court are motions to dismiss by Defendants United Northern Bankers, Ltd. ("United Northern"), (D.E. No. 40), and Bank of America, N.A. ("Bank of America" or "BANA"), (D.E. No. 41). The Court decides these motions without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons below, Bank of America's motion is granted. United Northern's motion is granted in part and denied in part.

II. BACKGROUND

In April 2009, Plaintiff searched the Internet seeking information about refinancing his mortgage loan to consolidate debt and perform a divorce settlement with his wife. (D.E. No. 36, Amended Complaint ("Am. Compl."), Factual Background ¶ 16¹). In response to Plaintiff's request for information, Defendant Bryan Campos, an employee of United Northern, contactedPlaintiff to discuss obtaining a Federal Housing Administration ("FHA") loan.² (Id. ¶ 17).

On April 19, 2009, Plaintiff submitted a refinance loan application to United Northern, seeking to borrow $242,165 at a fixed rate of 4.5%. (Id. ¶ 18). On the application, Plaintiff declared a monthly income of $4120 and $234,488 in liabilities, more than half of which was unsecured debt. (Id., Facts Common to All Parties ¶¶ 14-15). Plaintiff alleges that, at the time, his monthly housing payment, including principal, interest, taxes, and insurance, "far exceeded" 31% of his monthly income, in violation of FHA Guidelines. (Id. ¶¶ 5, 18).

On April 29, 2009, Campo informed Plaintiff that he was approved for an FHA loan at a fixed rate of 4.5%, with monthly payments of $2012, including principal, interest, taxes, and insurance. (Id., Factual Background ¶ 20). Also on that date, Campo told Plaintiff that "FHA will be your only outlet because of the flexibility in underwriting standards associated with [Plaintiff's] job history." (Id. ¶ 21). Campo further informed Plaintiff that he would receive all disclosures in the mail within 72 hours. (Id. ¶ 24). The next day, on April 30, 2009, Campo sought Plaintiff's assurance that Plaintiff was "on board so their [sic] is no wasted effort." (Id. ¶ 22).

At some point thereafter, Campo informed Plaintiff that he would not be eligible for a fixed rate loan and that only an adjustable rate loan would be available to him. (Id. ¶ 23).

Also at some point thereafter, Plaintiff informed Campo that he had not received all of the required disclosures, and Campo "stated that this was an oversight." (Id. ¶ 24). Plaintiff asserts that he received certain disclosures within a week after submitting his application, but that he did not receive a Good Faith Estimate or other disclosures required by law until closing on June 12, 2009—despite informing Campo on both May 6, 2009 and May 12, 2009 that he had not receivedthe Good Faith Estimate. (Id. ¶ 25).

On June 5, 2009, Campo told Plaintiff that a second investor signed off on the mortgage, but that there was no interest rate lock and the interest rate had increased to 5.25+%. (Id. ¶ 35). Plaintiff further alleges that, on that date, Campo advised Plaintiff "to accept the 5/1 arm at 4.5% interest rate because the '[g]ood part about FHA is you can streamline at any time from 6 months down the road to a 30 year fixed with no closing costs besides title insurance.'" (Id. ¶ 36).

Closing occurred on June 12, 2009 at Plaintiff's home. (Id. ¶ 26). The mortgage was in the amount of $242,165 with a 4.5% adjustable rate. (Id., Facts Common to All Parties ¶ 11; see also D.E. No. 40-2, Certification of Anthony J. Laura ("Laura Cert."), Ex. B, FHA Adjustable Rate Note ("Note") at 1).³ Plaintiff paid $13,637 in closing costs, "with $2421.65 in discount points to United as well as $2380 in a 1% loan discount also to United." (Am. Compl., Facts Common to All Parties ¶ 12).

Plaintiff alleges that some of the fees were charged to him in violation of applicable law. (Am. Compl, Factual Background ¶ 27). Specifically, he alleges that he "was charged a 1% origination fee but was not told that he would also be charged a 1% Loan Discount fee. Despite paying a point for a Loan Discount Fee, plaintiff did not receive any interest rate reduction." (Id. ¶ 28). Plaintiff further alleges that he questioned Campo about the discount fee after the closing, and that Campo stated that the discount fee is not part of the origination fee. (Id. ¶ 32).

Plaintiff alleges that he "wanted to back out of closing on the Loan," but "could not because he had a deadline to meet per the terms of a formal agreement reached between him and his former spouse, subsequent to the entry of the Judgment of Divorce." (Id. ¶ 29). This fact was allegedly known to United Northern and Campo. (Id.).

In addition, Plaintiff alleges that he "did not sign several of the documents - the Loan Application and the Truth in Lending Disclosure statement - and those documents contain signatures purporting to be plaintiff's when, in fact, the signatures are not plaintiff's and thus the signatures are forgeries." (Id. ¶ 32).

Plaintiff alleges that on or about June 12, 2009, the same day as the closing, Plaintiff's Note was endorsed in blank and sold by United Northern to Bank of America. (Am. Compl., Facts Common to All Parties ¶¶ 19-20). He further alleges that Bank of America underwrote Plaintiff's loan. (Id. ¶ 21).

Approximately eight months after the closing, Plaintiff contacted Campo regarding a refinancing transaction. (Id., Factual Background ¶ 33). Plaintiff alleges that he was "advised that he would be unable to do a streamline refinance that was promised to him and it would have to be an entirely new loan." (Id.). He further alleges that "Campo advised that he could not guarantee plaintiff's approval on a new loan." (Id.).

With respect to injury, Plaintiff alleges that "[t]he refinance transaction which is the subject of the within matter caused plaintiff's principal to increase, and plaintiff incurred actual costs including Application Fees, Closing Fees, Title Fees, Wire Fees, and Recording Fees." (Id., Facts Common to All Parties ¶ 24). Plaintiff alleges that he "attempted to mitigate his damages by listing his home for sale" but was unable to because "United failed to return the Recorded Deed to Plaintiff." (Id., Factual Background ¶ 37). Plaintiff does not specify a timeframe for this allegation.

Plaintiff alleges that on February 17, 2010, approximately eight months after closing, "BOA advised that they would not respond to plaintiff's Qualified Written Request⁴ because itsought information 'that goes beyond that which is available through a Qualified Written Request.'" (Id. ¶ 38). Plaintiff does not specify when he submitted his Qualified Written Request, or the information that he sought to obtain. He does allege, however, that "BOA advised that plaintiff's loan was owned by Ginnie Mae," which was not disclosed previously to Plaintiff. (Id. ¶ 38).

On or around April 2011, nearly two years after closing, Plaintiff began to have difficulty making mortgage payments "due to a decrease in income and depletion of savings and higher credit card interest rates." (Id. ¶ 39). Plaintiff asserts that he did not cease making payments at this time, but rather sought the assistance of Bank of America, which was the loan servicer at the time. (Id.). During this time, Plaintiff alleges that he "tried to make payments," but when he was unable to do so, "Plaintiff made payments of 75% of the monthly amount due." (Id. ¶ 41).

Plaintiff alleges that, at "various times between April and July, 2011, [he] spoke to representatives from BOA: Servicer . . . [who] represented that Plaintiff could apply for a one month forbearance and loan modification and suggested that he do so." (Id. ¶ 40). He further alleges that Bank of America "failed to process the paperwork for a loan forbearance" and did not advise him to contact an attorney or to seek credit or government counseling. (Id.).

On July 12, 2011, Plaintiff applied for an FHA loan modification with Bank of America. (Id. ¶ 42). On August 4, 2011, Plaintiff was informed that he was not approved for a loan modification. (Id. ¶ 43). He alleges that he was not provided with a specific reason for the denial at that time, but that he was later advised that his back end debt-to-income ratio was too high. (Id.).

On August 16, 2011, Plaintiff filed a complaint with the Office of the Comptroller of the Currency.⁵ (Id. ¶ 44). He alleges that he received a phone call from a Bank of America representative regarding his complaint, and that the representative "stated that she was going to try to reduce plaintiff's minimum payments on his BOA credit cards to enable plaintiff to obtain a loan modification under FHA Guidelines." (Id. ¶ 45).

On October 27, 2011, Plaintiff asserts that "the Note and Mortgage were assigned by MERS⁶ to BOA." (Id. ¶ 46). On July 25, 2013, Defendant M&T issued correspondence informing Plaintiff that it would be the servicer of Plaintiff's loan, effective August 2, 2013. (Id. ¶ 47). On September 20, 2013, M&T issued a Notice of Intention to Foreclose indicating that Plaintiff's loan was owned by Defendant Lakeview Loan Servicing, LLC. (Id. ¶ 48).

Plaintiff filed his original Complaint in the Superior Court of New Jersey, Law Division, Bergen County on or about October 23, 2013. (D.E. No. 1, Notice of Removal at 1-2). United Northern removed the action to this Court on November 25, 2013. (Id. at 1). Plaintiff moved to remand, (D.E. No. 8), and Magistrate Judge Joseph A. Dickson issued a Report & Recommendation suggesting that the Court deny the motion, (D.E. No. 19). The parties did not object, and the Court adopted Judge Dickson's Report...