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Ramon Rivera v. Bank of America Home Loans

April 21, 2011


The opinion of the court was delivered by: Bloom, United States Magistrate Judge:


Plaintiff Ramon Rivera brings this action against defendant BAC Home Loans Servicing, LP*fn1 ("BAC Servicing") claiming that defendant breached the Servicer Participation Agreement with Fannie Mae when it failed to properly evaluate plaintiff for a home loan modification under the Home Affordable Modification Program ("HAMP"), Sections 101 and 109 of the Emergency Economic Stabilization Act of 2008, as amended by Section 7002 of the American Recovery and Reinvestment Act of 2009. Defendant moves to dismiss plaintiff's amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, defendant's motion to dismiss is granted.*fn2


This case presents an unfortunate, but all too common set of circumstances in the world today. Plaintiff is a homeowner in financial distress who seeks a loan modification from an unresponsive bank relying on an ineffectual federal program. This action arises out of the thirty-year mortgage on plaintiff's home in Floral Park, New York. Plaintiff borrowed $402,500 from Concord Mortgage Corporation on March 23, 2007. (Docket entry 19, Am. Compl., ¶4.) Defendant is the servicer of plaintiff's mortgage. (Id. at Ex. A.) After plaintiff's hours were reduced as a checkpoint supervisor for the Transportation Security Administration in early 2009, plaintiff became unable to afford his monthly mortgage payments. (Id. at ¶5.) Plaintiff requested a loan modification from defendant, but defendant denied the request on May 6, 2009. (Id. at ¶¶6, 9; Ex. A.) The following day, defendant notified plaintiff that his loan was in default and warned plaintiff that if he failed to pay $8,553.58 by June 11, 2009, the mortgage payments would be accelerated and foreclosure proceedings would be initiated. (Id. at Ex. A.)

Before foreclosure proceedings were initiated, plaintiff commenced this action on June 15, 2009.*fn3 Shortly thereafter, defendant provided plaintiff an application for a home loan modification Trial Period Plan under the HAMP.*fn4 (Id. at ¶10; Ex. B.) The HAMP is a federal program that is part of the Making Home Affordable Program. (Id. at Ex. B.) The HAMP was "designed to help three to four million financially struggling homeowners by modifying loans to a level that is affordable for borrowers." (Id.) Defendant entered into a Securities Purchase Agreement with the United States Department of the Treasury on October 26, 2008 and a Servicer Participation Agreement (the "Agreement") with Fannie Mae, as financial agent for the United States, on April 17, 2009. (Id. at ¶¶19-20.) According to the uniform standards set forth in the Agreement as well as the HAMP directives and guidelines, defendant was required to review all mortgage loans in default that it serviced and determine whether the borrowers on those loans were eligible for a loan modification. (Id. at ¶21.) In order to determine if plaintiff qualified for a loan modification under the HAMP, defendant instructed plaintiff to submit the required documentation and the new affordable mortgage payment by August 2, 2009. (Id. at Ex. B.) Defendant calculated plaintiff's new affordable mortgage payment as $1,844.50. (Id.) Plaintiff alleges that defendant calculated his new affordable mortgage payment in error by using his 2008 tax returns instead of the 2009 pay stubs which reflected his recent reduction of income. (Id. at ¶¶11-13.) Plaintiff claims that by improperly evaluating plaintiff for the HAMP loan modification, defendant breached its obligations under the Agreement with Fannie Mae.


Plaintiff commenced this action pro se against BAC Servicing and Washington Mutual Bank on June 5, 2009.*fn5 (Docket entry 1.) Throughout this litigation, plaintiff has always timely appeared and presented himself earnestly and respectfully before the Court. At a pre-motion conference held on November 9, 2009, the Court granted plaintiff leave to amend his complaint and stayed defendants' response to the complaint.*fn6 (Docket entry 18.) On December 31, 2009, plaintiff filed an amended complaint, naming only BAC Servicing as a defendant. (Docket entry 19.) The amended complaint incorporated by reference the Agreement between BAC Servicing and Fannie Mae.*fn7 (Am Compl., ¶20.)

As the parties were engaged in settlement negotiations, the Court stayed defendant's response to the amended complaint from January 12, 2010 until November 29, 2010. During that time, the Court held seven conferences to discuss settlement. In January 2010 plaintiff provided defendant a new application for a home loan modification. After defendant failed to decide the new application for several months, the Court ordered defendant to show good cause why plaintiff's loan modification application had not been acted upon. (Docket entry 23.) On May 10, 2010, defendant informed the Court that plaintiff had been approved for a loan modification. (Docket entry 24.) However, plaintiff rejected defendant's loan modification offer, as it was not made pursuant to the HAMP. At a status conference on June 22, 2010, defendant's counsel informed the Court that defendant had recently changed its internal process for loan modification applications under the HAMP. (Docket entry 32.) Accordingly, plaintiff had to submit another application. At the status conference on August 17, 2010, defendant's counsel informed the Court that plaintiff was not currently eligible for a loan modification under the HAMP because his sole source of income was temporary workers' compensation benefits. Nonetheless, there were further efforts to resolve the case. (Docket entries 39 and 43.) Ultimately, no resolution was reached and the Court set the briefing schedule for defendant's instant motion to dismiss.*fn8 (Docket entry 46.) Counsel appeared on plaintiff's behalf. (Docket entry 48.) Defendant now moves to dismiss the amended complaint. (Docket entry 50.) Plaintiff opposes the motion and defendant has replied. (Docket entries 52 and 53.)

programs/mha/Documents_Contracts_Agreements/093010bankofamericahomeloansSPA%28incltransmittal%29-r.pdf. (Last visited April 12, 2011).


I.Standard of Review

On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). To survive a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Iqbal, 129 S. Ct. at 1950. In deciding a motion to dismiss, the Court may consider, in addition to the complaint, documents that plaintiff attached to the pleadings, documents referenced in the complaint, documents that plaintiff relied on in bringing the action which were in plaintiff's possession or of which plaintiff had knowledge, and matters of which judicial notice may be taken. Chambers, 282 F.3d at 152-153.

II.Breach of Contract Claim

Plaintiff claims that defendant breached its contractual obligations under the Agreement when it failed to properly evaluate plaintiff for a home loan modification under the HAMP. Plaintiff acknowledges that he is not a party to the Agreement, which was executed between defendant and Fannie Mae. However, plaintiff argues that he is a third party beneficiary of the Agreement and therefore may enforce the contractual obligations against defendant.*fn9 Defendant argues that plaintiff is not a third party beneficiary to the Agreement and therefore lacks standing to assert a breach of contract claim. (Docket entry 51, Mem. of Law in Support of BAC Home Loans Servicing, LP's Motion to Dismiss ("Def.'s Mem."), pp. 5-6.*fn10 ) Defendant characterizes plaintiff's breach of contract claim as "merely an attempt to enforce a nonexistent private right of action under HAMP." (Id. at p. 6.) Although plaintiff does not claim that the HAMP directly provides him a right to sue for a home loan modification, the Court notes that other district courts that have considered the issue have not found a private right of action under the HAMP. See e.g., Phipps v. Wells Fargo Bank, N.A., No. CV F 10-2025, 2011 U.S. Dist. LEXIS 10550, at *24 (E.D. Cal. Jan. 27, 2011) ("Nowhere in ...

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