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Lawson v. Specialized Loan Servicing, LLC

United States District Court, E.D. Tennessee, Knoxville

February 6, 2018

ALVIN DAVID LAWSON and CYNTHIA JANE LAWSON, Plaintiffs,
v.
SPECIALIZED LOAN SERVICING, LLC, DEUTSCHE BANK NATIONAL TRUST COMPANY, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC, AND SHAPIRO & INGLE LLP, Defendants.

          SHIRLEY, J.

          MEMORANDUM OPINION

          REEVES, J.

         This 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 entirety.

         I. Background

         The 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.

         The 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.

         On 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.

         On 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 foreclosure proceeding.

         On 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.

         On 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 due amounts.

         On 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.

         On 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.

         II. Standard of Review

         Defendants 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. ...


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