United States District Court, E.D. Tennessee, Knoxville
action is brought by plaintiffs to stop foreclosure
proceedings on their residence. Plaintiffs assert claims for
breach of contract under the terms of their Deed of Trust,
violation of Tenn. Code Ann. § 35-5-101, violation of
the Real Estate Settlement Procedures Act (RESPA), and
violation of the Fair Debt Collection Practices Act (FDCPA).
Defendants respond that plaintiff's complaint fails to
state a claim upon which relief can be granted because
defendants have the right to enforce plaintiffs' mortgage
and defendants have complied with the applicable law. For the
reasons which follow, defendants' motions to dismiss the
complaint will be granted, and this action dismissed in its
Lawsons purchased a residence on December 7, 2005, and
obtained a $144, 800.00 loan (Note) from First Franklin, a
Division of National City Bank of Indiana. The loan is
secured by a Deed of Trust, which designates Mortgage
Electronic Registration Systems (MERS) as the nominee for
First Franklin as well as First Franklin's successors and
assigns. The Deed of Trust provides that MERS holds legal
title to the interests granted by the Lawsons and has the
right to foreclose and sell the property. The Deed of Trust
also provides that the Note can be sold without notice to the
Lawsons, and that a sale may result in a change in the Loan
Servicer that collects payment due under the Note. The
Lawsons' mortgage loan is currently designated as
“FFMLT Trust 2006-FF4, Mortgage Pass-Through
Certificates, Series 2006-FF4.” Deutsche Bank is the
Trustee of this security with right of foreclosure.
Lawsons' failed to make their July 1, 2016 mortgage
payment. On September 4, 2016, Specialized Loan Servicing
(SLS) sent a letter to the Lawsons stating that their loan
was in default. On November 17, 2016, Shapiro & Ingle
sent a letter to the Lawsons stating that the amount of their
debt was $155, 841.05 and that the owner of the debt was
Deutsche Bank. The letter informed the Lawsons they had
thirty (30) days to dispute the amount of the debt pursuant
to the FDCPA.
December 9, 2016, the Lawsons sent a letter to Shapiro &
Ingle requesting the name and address of the original
creditor, the history of ownership of the loan, and a
breakdown of the debt amount. The letter also requested that
SLS “hold off” on starting foreclosure
proceedings and give the Lawsons another month or two to
salvage the situation and save their home.
December 12, 2016, David Lawson called SLS and discovered the
foreclosure process had begun and a foreclosure sale was set
for January 17, 2017. The Lawsons' attorney sent a letter
to SLS, requesting a breakdown of principal, interest,
attorney fees, and other costs being charged in the
December 16, 2016, the first public notice of the foreclosure
sale was published. On that same day, SLS notified the
Lawsons' attorney by letter that the foreclosure sale was
scheduled for January 17, 2017, and SLS could not
“cancel the sale or evaluate the request for a
foreclosure prevention option.” The letter provided
that any “Notices of error and requests for information
(including qualified written requests (QWRs)), must be
submitted in writing to Specialized Loan Servicing LLC, P.O.
Box 630147, Littleton, CO 80163-0147.
December 19, 2016, SLS mailed the Lawsons a mortgage
statement requesting payment of $11, 470.10 by January 1,
2017. This mortgage statement broke down the amount due into
principal, interest, escrow for taxes and insurance, regular
monthly payment, advance billed foreclosure expense, and past
December 24, 2016, SLS sent a letter to the Lawsons'
attorney and provided the name and address of the original
creditor, the name and address of the current creditor, a
payment history, a copy of the Deed of Trust, a copy of the
Note, and an explanation of fees on the account. The letter
informed counsel that the Deed of Trust allows for transfer
of the Note or services without the borrowers'
authorization. Lastly, the letter stated the foreclosure sale
was set for January 17, 2017.
January 11, 2017, Shapiro & Ingle, the law firm
representing SLS, sent a letter to the Lawsons informing them
that the foreclosure sale had been rescheduled for February
20, 2017. On January 24, 2017, SLS again sent copies of the
original Deed of Trust, Note, and payment history to the
Lawsons' attorney. The foreclosure sale did not take
place on February 20, 2017, and it has not been rescheduled.
Standard of Review
move for dismissal of the Lawsons' complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6), alleging that the
Lawsons have failed to “state a claim upon which relief
can be granted.” Fed.R.Civ.P. 12(b)(6). When
determining the sufficiency of the complaint against a motion
to dismiss under this Rule, the court must accept as true all
facts alleged in the complaint. Bell Atlantic Corp. v.