United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
G. FLEISSIG UNITED STATES DISTRICT JUDGE.
matter is before the Court on the joint motion (ECF No. 85)
for summary judgment filed by Defendants Wells Fargo Home
Mortgage (“Wells Fargo”) and Deutsche Bank
National Trust Company (“Deutsche Bank”).
Plaintiff's claims against these Defendants (the only
remaining claims in this case) arise out of the foreclosure
of Plaintiff's real property by Wells Fargo. On May 2,
2017, the Court gave the parties notice that it believed one
of Plaintiff's claims may be subject to summary judgment
on a ground not raised by Defendants, and allowed the parties
an opportunity to submit supplemental briefing on this issue.
Upon careful review of the parties' initial and
supplemental briefs, and for the reasons set forth below, the
Court will grant Defendants' motion.
purposes of this summary judgment motion, the record
establishes the following. On October 27, 2006, Plaintiff
purchased real property located at 471 Olde Court Road, St.
Charles, Missouri 63303. The same day, she executed two
adjustable rate notes, secured by deeds of trust on the
property, in favor of MILA, Inc., DBA Mortgage and Investment
and Lending Associates, Inc. (“MILA”). The first
was in the amount of $408, 862 (“First
Mortgage”), and the second was in the amount of $102,
216 (“Second Mortgage”). Wells Fargo acquired the
First Mortgage in December 2006, and Chase Bank, a former
Defendant in this case, at some point acquired the Second
Plaintiff's monthly payment on the First Mortgage was $2,
720.17, but on March 24, 2010, Wells Fargo entered into a
loan modification agreement with Plaintiff, which lowered
Plaintiff's monthly payment to $1, 889.65. On September
10, 2010, Plaintiff's personal liability for any future
deficiency judgment on her mortgages, in the event of
foreclosure, was discharged as part of a Chapter 7 bankruptcy
March 2012, Plaintiff was more than 60 days delinquent on the
First Mortgage and attempted to obtain another modification
of her payment terms under the federal Home Affordable
Modification Program (“HAMP”). Wells Fargo is a
participating servicer under a HAMP Service Participation
Agreement with the federal government.
explained in Topchian v. JPMorgan Chase Bank, N.A.,
760 F.3d 843 (8th Cir. 2014):
HAMP modifications proceed in two steps. Step One involves
the mortgage servicer of an eligible homeowner offering the
homeowner a Trial Period Plan (TPP) agreement. A TPP
agreement allows the homeowner to make modified mortgage
payments for a specified term. If all conditions of the TPP
agreement are satisfied, the homeowner then proceeds to Step
Two, at which point he is offered a permanent loan
modification agreement that outlines the terms of the final
760 F.3d 843, 846 (8th Cir. 2014).
submitted a HAMP application dated June 11, 2012, in which
she left blank the fields titled “First Mortgage
Payment” and “Second Mortgage Payment.” In
her affidavit submitted in response to Defendants'
motion, Plaintiff states that she left these fields blank
because she was told to do this by a representative of Wells
Fargo via telephone when she called to ask how to fill out
the form. Plaintiff states that when she spoke to Wells Fargo
about completing the HAMP application at this time, she
informed a Wells Fargo representative of her Second Mortgage.
later submitted updated HAMP applications, dated August 21,
2012 and September 24, 2012,  in which she entered “$2,
714” in the field for “First Mortgage Principal
& Interest Payment” but entered “0” in
the field for “Second Mortgage Principal & Interest
Payment.” In her affidavit, Plaintiff states that she
listed her Second Mortgage payment as “0” because
“the NACA representative told us . . . that Wells
Fargo's system would automatically populate this field on
the application when they ran a title report as part of the
application process.” ECF No. 88-4 at 3.
Plaintiff's signed HAMP applications, she certified that
all of the information in the applications was truthful; that
she authorized the servicer, Wells Fargo, to investigate her
eligibility for modification and the accuracy of the
statements in her applications; and that she understood that
Wells Fargo was not obligated to offer her assistance based
solely on the representations in her applications.
October 11, 2012, Wells Fargo sent Plaintiff a packet of
documents stating that she was approved to enter into a Trial
Period Plan (“TPP”) agreement under HAMP. The TPP
was comprised of several documents. First, it included an
approval letter, which stated that Plaintiff was required to
make three trial period payments instead of her normal
monthly mortgage payments, during the trial period of
November 1, 2012 to January 1, 2013, and that Plaintiff was
to accept the TPP by calling Wells Fargo or by sending her
first trial period payment within 14 days of the date of the
letter. The letter further stated: “After all trial
period payments are timely made and you have submitted all
the required documents, your mortgage may be permanently
modified.” ECF No. 86-2 at 44.
included in the TPP was a “Frequently Asked
Questions” document, which stated: “The trial
period is temporary, and your existing loan and loan
requirements remain in effect and unchanged during the trial
period.” Id. at 46. This document further
stated: “Once you make all of your trial period
payments on time, we will send you a modification agreement
detailing the terms of the modified loan.” Id.
next document, titled “Important Program Info, ”
stated: “We will not proceed to the foreclosure sale
during the trial period, provided you are complying with the
terms of the Trial Period Plan.” But the document
Any pending foreclosure action or proceeding that has been
suspended may be resumed if you are notified in writing that
you failed to comply with the terms of the Trial Period Plan
or do not qualify for a permanent modification.
* * *
The servicer's acceptance and posting of your new payment
during the trial period will not be deemed a waiver of the
acceleration of your loan (or foreclosure actions) and
related activities, and shall not constitute a cure of your
default under your loan unless such payments are sufficient
to completely cure your entire default under your loan.
Id. at 48.
the TPP included a second letter with additional information,
stating: “Before your loan can be modified, you will
need to successfully complete the trial period plan by making
all trial payments on the dates they're due and meeting
all other requirements. . . . If you don't comply with
trial period terms, we will send you a Non-Approval notice.
Examples of not meeting the terms of the [TPP] include not
making your payments on time, or not sending us the required
documents.” Id. at 42.
although the HAMP guidelines provide that servicers
“may include, as necessary, conditional language in
HAMP offers and modification agreements indicating that the
HAMP will not be implemented unless the servicer receives an
acceptable title endorsement, or similar title insurance
product, or subordination agreements from other existing lien
holders, as necessary, to ensure that the modified mortgage
loan retains its first lien position and is fully
enforceable, ” ECF No. 24-3 at 16, Plaintiff's TPP
did not contain such language.
required by the TPP, Plaintiff called Wells Fargo within 14
days to accept the TPP and also made her first trial period
about November 27, 2012, Wells Fargo ran a title report on
Plaintiff's property as part of their standard HAMP
review process. The title report indicated liens on
Plaintiff's property, including federal and state tax
liens and the Second Mortgage. The parties dispute whether
Wells Fargo knew about the Second Mortgage before November
27, 2012. As discussed above, Plaintiff contends that she
informed a Wells Fargo representative about the Second
Mortgage earlier, when filling out her HAMP application.
Fargo shortly thereafter instructed Plaintiff that it
required a subordination agreement from the second
lien-holder (Chase). In phone calls in November and December of
2012, Plaintiff informed Wells Fargo that Chase would not
agree to subordinate the Second Mortgage. Plaintiff asserts
that, more specifically, she informed Wells Fargo that Chase
would not agree to subordinate the Second Mortgage at
Plaintiff's request and that Chase required Wells Fargo
to call Chase directly to request a subordination agreement.
Fargo asserts that Chase's agreement to resubordinate its
loan after any loan modification was necessary to avoid Wells
Fargo's relinquishing its senior lien position, and that
its insistence on subordination was in accordance with the
HAMP guidelines for servicers. In particular, Wells Fargo
points to the HAMP guidelines, which state that “HAMP
does not require extinguishment of subordinate lien
instruments as a condition of modification. However,