Phillips v. Ocwen Loan Servicing, LLC

92 F.Supp.3d 1255

Jeffrey PHILLIPS, On Behalf of Himself and All Other Persons in the State of Georgia who are Similarly Situated, Plaintiff

v.OCWEN LOAN SERVICING, LLC, Defendant.

No. 1:12–cv–3861–WSD.

United States District Court, N.D. Georgia, Atlanta Division.

Signed March 12, 2015.

Robert Keegan Federal, Jr., Rene Octavio Lerer, The Federal Firm, LLC, Bruce P. Brown, Bruce P. Brown Law, Atlanta, GA, for Plaintiff.

Brett J. Natarelli, Buckley Sandler, LLP, Chicago, IL, Fredrick S. Levin, Richard E. Gottlieb, Buckley Sandler, LLP, Santa Monica, CA, Sarah–Nell Walsh, William Allen McBride, Jr., Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Atlanta, GA, for Defendant.

OPINION AND ORDER

WILLIAM S. DUFFEY, JR., District Judge.

This matter is before the Court on Plaintiff Jeffrey Phillips's (“Plaintiff” or “Phillips”) Objections [139] to Magistrate Judge Justin S. Anand's Final Report and Recommendation (“R & R”) [135]. The R & R recommends granting Defendant Ocwen Loan Servicing, LLC's (“Defendant” or “OLS”) Motion for Summary Judgment [104]. Also before the Court is Plaintiff's Motion for a Hearing [141] on his Objections.¹

I. BACKGROUND

A. Facts

On December 7, 1998, Plaintiff obtained a loan (the “Loan”) from HomeAmerican Credit, Inc., d/b/a/ Upland Mortgage (“Upland”) and executed in favor of Upland a promissory note (the “Note”), in the amount of $86,400. (Note [104.4] ). The Note provides, in pertinent parts:

2. INTEREST

Interest will be charged on unpaid principal until the full amount of principal has been paid. I will pay interest at a yearly rate of 10.890%.

3. PAYMENTS

(A) Time and Place of Payments

I will pay principal and interest by making payments every month.

I will make my monthly payments on the 15th day of each month beginning on January 15, 1999.

I will make these payments every month until I have paid all of the principal and interest and any other charges ... that I may owe under this Note. My monthly payments will be applied to interest before principal....

...

(B) Amount of Monthly Payments

My monthly payment will be in the amount of U.S. $815.64.

...

6. BORROWER'S FAILURE TO PAY AS REQUIRED

...

(B) Default

If I do not pay the full amount of each monthly payment on the date it is due, I will be in default.

(C) Notice of Default

If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of principal which has not been paid and all the interest that I owe on that amount.

(Note ¶¶ 2–3, 6).

Repayment of Plaintiff's loan was also secured by a deed (the “Security Deed”) (together with the Note, the “Loan Agreement”) to real property located at 728 Kennolia Drive, Atlanta, Georgia (the “Property”). (Security Deed [104.5] ). The Security Deed was executed in favor of Upland. (Id. ). The Security Deed provides, in pertinent parts:

3. Application of Payments. ... [A]11 payments received ... shall be applied: first, to any prepayment charges due under the Note; second, to amounts payable [for escrow items, including taxes and insurance]; third, to interest due; fourth, to principal due; and last, to any late charges due under the Note.

4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property....

5. Hazard or Property Insurance. ... If Borrower fails to maintain coverage described above, Lender may, at Lender's option, obtain coverage to protect Lender's rights in the Property....

...

7. Protection of Lender's Rights in the Property. If Borrower fails to perform the covenants and agreements contained in this Security [Deed] ... then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights in the Property....

...

19. Sale of Note; Change of Loan Servicer. The Note or a partial interest in the Note (together with this Security [Deed] ), may be sold one or more times without prior notice to Borrower. A sale may result in a change in the entity (known as the “Loan Servicer”) that collects monthly payments due under the Note and this Security [Deed]. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note....

...

21. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security [Deed].... The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security [Deed] and sale of the Property.... If the default is not cured on or before the date specified in the notice, Lender, at its option, may require immediate payment in full of all sums secured by this Security [Deed] without further demand and may invoke the power of sale granted by Borrower....

(Security Deed ¶¶ 3–5, 7, 19, 21).

In May 2005, OLS became the servicer of Plaintiff's loan. (Def's Statement of Material Facts (“SOMF”) at ¶ 6). On May 6, 2005, OLS sent Plaintiff an account statement, which states:

Please note that you have a Simple Interest Loan that accrues interest from the last date that interest was paid through the date your next payment is received. When your next payment is received, the interest amount will be calculated from the date listed in the “Interest Paid Through Date” field (listed above) through the date that your payment was received. It is important to ensure that your payments are received timely and consistently so that your accrued interest each period is limited to approximately one month's interest. If you elect to take advantage of your grace period, please note that this will cause a greater portion or all of your payment to be applied to interest.

(05/06/2005 Account Statement [104.6] ).

On October 30, 2009, OLS offered Plaintiff a loan modification. (Pl's SOMF ¶ 11). Plaintiff did not sign the modification agreement.

On November 20, 2009, OLS sent Plaintiff a Notice of Default, which states that Plaintiff's “mortgage payments are past due, which puts [Plaintiff] in default of [his] loan agreement.” (Notice of Default [140.1] at 1).² The Notice of Default also states that, as of November 20, 2009, Plaintiff owes $12,068.64, which includes past due principal and interest of $2,446.92, that the “debt is owed to [OLS] as the owner or servicer of your home loan and mortgage,” and that payment is due by December 20, 2009. (Id. ). The Notice of Default provides:

Failure to bring your account current may result in our election to exercise our right to foreclose on [the P]roperty. Upon acceleration, your total obligation will be immediately due and payable without further demand....

...

After acceleration of the debt, but prior to foreclosure, you may have the right to reinstate the mortgage loan, depending on the terms of the note and mort gage.... Payments received that are less than the amount required to reinstate the mortgage loan will be returned, and will not stop any foreclosure proceedings that have begun....

(Notice of Default at 2).

On December 21, 2009, Plaintiff sent a payment, in the amount of $855, to OLS, and OLS returned the payment to Plaintiff. (Def's SOMF ¶ 34). Plaintiff did not make another loan payment to OLS until March 9, 2010. (Id. ¶ 35).

On January 16, 2010, OLS offered Plaintiff another loan modification and sent him a Proposed Modification Agreement (“PMA”). (Def's SOMF ¶ 25; PMA [104.34] ). The PMA states:

In order to accept this modification on your loan, you must complete ALL of the following steps on or before 1/29/10, (“Due Date”):

1. SIGN the bottom of the Agreement....

2. FAX the fully executed Agreement to [OLS]

3. PAY the full initial payment in the amount of: $1,022.82

4. NEW MONTHLY PAYMENT:

Principal and Interest Payment:	$857.00
	Escrow Payment:	$165.82
	Total (which may or may not include escrow):	$1,022.82
		starting on 3/15/10

...

... If ALL of the items above are not completed by the Due Date, the Agreement shall have no force or effect and any down payment received will be returned to you. Please be advised that [OLS] will not delay, postpone or otherwise stop any collection efforts until ALL of the steps above have been completed.

(PMA at 1). Plaintiff did not sign the PMA. (Def's SOMF ¶ 26).

On March 1, 2010, Weismann Nowack Curry & Wilco, P.C., on behalf of “Bank of America, National Association, as Successor by Merger to LaSalle Bank National Association, as Trustee for the Registered Holders of Credit Suisse Seasoned Loan Trust 2006–1, Home Equity Pass–Through Certificates, Series 2006–1” (the “Trustee”), sent Plaintiff a Notice of Foreclosure Sale (“NFS”). (NFS [69.5] at 1). The NFS states that the Trustee is the holder of Plaintiff's Note and Security Deed, that OLS is the entity with full authority to negotiate, amend and modify the terms of Plaintiff's mortgage, that Plaintiff had defaulted on his loan obligations, and that, if Plaintiff did not pay the entire balance of his loan, the Trustee would conduct a foreclosure sale of the Property. (Id. ).

On March 8, 15, 22, and 29, 2010, OLS published in the Fulton County Daily Report a Notice of Sale Under Power (“NSUP”), which states that the Trustee will conduct a foreclosure sale of the Property on the first Tuesday in April, 2010. (NSUP [104.37] ). The NSUP states that

the debt secured by [the] Security Deed has been and is hereby declared due because of, among other possible events of default, failure to pay the indebtedness as and when due and in the manner provided in the Note and Security Deed. The debt remaining in default, this sale will be made for the purpose of paying the same and all expenses of this sale....

...

The sale will be conducted subject ... to final confirmation and audit of the status of the loan

...