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Thepvongsa v. Regional Trustee Services Corporation

United States District Court, Ninth Circuit

September 25, 2013



ROBERT S. LASNIK, District Judge.

This matter comes before the Court on "Defendant Saxon Mortgage Services, Inc.'s Motion for Summary Judgment." Dkt. #93. Plaintiff asserts that Saxon violated the Real Estate Settlement Procedures Act ("RESPA"), the Fair Debt Collection Practices Act ("FDCPA"), the Fair Credit Reporting Act ("FCRA"), and the Washington Consumer Protection Act ("CPA") in connection with its servicing of plaintiff's loan from March 26, 2007, to November 16, 2009. Plaintiff seeks damages as well as declaratory and injunctive relief. Having reviewed the memoranda, declarations, and exhibits submitted by the parties and having heard the arguments of counsel, the Court finds as follows:


On January 19, 2007, plaintiff obtained two loans from defendant New Century Mortgage Corporation ("New Century"). Only the larger of the two loans is at issue in this litigation. Plaintiff executed a deed of trust in favor of New Century, identifying plaintiff as the borrower, New Century as the lender, Old Republic Title as the trustee, and Mortgage Electronic Registration System ("MERS") as the "beneficiary" and the lender's "nominee."

Defendant Saxon began servicing plaintiff's loan on March 26, 2007, although the identity of its then-principal is not disclosed in the records provided. At some point in mid-2008, plaintiff defaulted on the loan. On November 5, 2008, an "Assignment of Deed of Trust" was recorded, purporting to transfer whatever beneficial interest MERS had in the loan to Deutsche Bank National Trust Company "as Trustee for Morgan Stanley ABS Capital I Inc., MSAC 2007-NC4." Plaintiff alleges that this assignment was invalid for a number of reasons, including MERS' lack of any beneficial interest in the loan, the lack of authority on the part of the signer, and the impossibility that Deutsche Bank was acting as trustee for the identified fund.[1] On the same day of the purported transfer from MERS to Deutsche Bank, Deutsche Bank appointed Regional Trustee Services ("RTS") as the successor trustee. The day before the assignment and appointment were executed, RTS had issued a Notice of Default to plaintiff, representing itself as "Trustee and/or Agent for the Beneficiary."

RTS recorded a Notice of Trustee's Sale on December 5, 2008, which identified Deutsche Bank as the beneficiary and asserted that the outstanding debt was $16, 956.35, including $346.17 in "Beneficiary Advances." Plaintiff alleges that this first Notice of Trustee's Sale was invalid because Deutsche Bank was not properly assigned the beneficial interest in the loan, that RTS had not been properly appointed as successor trustee, that the "Beneficiary Advances" are unjustified fees, and that the pay-off amount was incorrect. The sale was discontinued and ultimately cancelled. On October 30, 2009, Saxon notified plaintiff that the servicing of his loan would be transferred to Ocwen Loan Servicing, LLC, effective November 16, 2009.

In March 2010, plaintiff served a combined Qualified Written Request, dispute of debt, and debt validation request on defendants Ocwen, RTS, and New Century. The document was not sent to Saxon, but plaintiff recorded it in the King County property records.

In June 2010, plaintiff discovered that both Saxon and Ocwen had reported a mortgage default to the credit reporting agencies. Plaintiff alleges that both reports contained inaccuracies, and that the duplicative reporting made it appear as if plaintiff had defaulted on two different debts. Within weeks, plaintiff, proceeding pro se, filed this action asserting that Saxon and Ocwen had provided inaccurate information to a credit reporting agency in violation of the Fair Credit Reporting Act. When defendants challenged the adequacy of plaintiff's allegations, he apparently disputed the reports with the credit reporting agencies as required by statute. A month later, plaintiff received a letter from Saxon stating that it had "received your claim of Identity Theft/Fraud from the credit bureau" and requesting that plaintiff provide additional information. Plaintiff did not respond.


Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine dispute as to any material fact that would preclude the entry of judgment as a matter of law. L.A. Printex Indus., Inc. v. Aeropostale, Inc. , 676 F.3d 841, 846 (9th Cir. 2012). The party seeking summary dismissal of the case "bears the initial responsibility of informing the district court of the basis for its motion" ( Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986)) and identifying those portions of the materials in the record that show the absence of a genuine issue of material fact (Fed. R. Civ. P. 56(c)(1)). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to identify specific factual disputes that must be resolved at trial. Hexcel Corp. v. Ineos Polymers, Inc. , 681 F.3d 1055, 1059 (9th Cir. 2012). The mere existence of a scintilla of evidence in support of the non-moving party's position will not preclude summary judgment, however, unless a reasonable jury viewing the evidence in the light most favorable to the non-moving party could return a verdict in its favor. U.S. v. Arango , 670 F.3d 988, 992 (9th Cir. 2012).

A. Real Estate Settlement Procedures Act

Plaintiff alleges that Saxon violated § 2607(b) of RESPA when it caused RTS to include a demand for "Beneficiary Advances" in the Notice of Trustee's Sale. Section 2607(b) reads:

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

RESPA was intended to reform the real estate settlement process ( i.e., the closing of loans) by, in relevant part, eliminating kickbacks and referral fees that unnecessarily increased the costs of services obtained to close the transaction. 12 U.S.C. § 1601. Plaintiff has not alleged that the "Beneficiary Advances" were charged in connection with the settlement of his loan or provided any evidence that would support such an inference. Nor has plaintiff alleged that Saxon provided settlement services or had any role in the closing. Costs and expenses assessed after closing are not the type of "real estate settlement services" to which RESPA generally-or § 2607(b) specifically - applies. Bloom v. Martin , 77 F.3d 318, 320-21 (9th Cir. 1996) (failure to disclose ...

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