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Leonard Gomes, Jr v. Bank of America

May 15, 2013

LEONARD GOMES, JR.,
PLAINTIFF,
v.
BANK OF AMERICA, N.A.; BAC HOME LOANS SERVICING, LP; JOHN AND MARY DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Susan Oki Mollway Chief United States District Judge

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

This removed action arises out of an attempt by Plaintiff Leonard Gomes, Jr., to obtain a modification of a $654,500 loan. Gomes's First Amended Complaint asserts claims of negligence and of violating section 480-2 of Hawaii Revised Statutes based on the handling of his loan modification application.

On March 15, 2013, Defendants filed a motion for summary judgment. See ECF No. 42. That motion is granted.

I. BACKGROUND.

In 2007, the National Bank of Kansas City loaned Gomes $654,500. This loan was secured by a note, ECF No. 43-5, and a mortgage on his residence, ECF No. 43-6. In 2010, the loan was assigned to Deutsche Bank National Trust Company, Trustee of BCAP LLC Trust 2007-AA4. See ECF No. 43-7. Gomes's loan was serviced by Defendant BAC Home Loans Servicing, LP. See 43-8 (notice of intent to foreclose); Declaration of Michele C. Sexton ¶¶ 2, 6, ECF No. 43-4.

The original Complaint asserted causes of action for negligence and unfair and deceptive acts in violation of section 480-2 of Hawaii Revised Statutes. Id. As detailed in Judge David Alan Ezra's order of July 25, 2012, Gomes alleged that he attempted numerous times to modify his loan, only to be told that his loan needed to be in default before it could be modified.*fn1

Judge Ezra ruled that Gomes had alleged sufficient facts to support a negligence claim given BAC Servicing's duty to Gomes to process his loan modification application. See ECF No. 14. Although lenders and loan servicers generally owe borrowers no duty of care giving rise to any negligence claim, Judge Ezra ruled that the allegations suggested that BAC Servicing had exceeded its role as a conventional loan servicer.

On August 8, 2012, Gomes filed a First Amended Complaint. This document adds factual allegations concerning Gomes's alleged damages. In the original Complaint, Gomes had merely alleged that his credit score had been damaged and that he might have sold his property but for being told he qualified for a Home Affordable Modification Program ("HAMP") loan modification. See Complaint ¶¶ 95 and 97, ECF No. 1-2. In the First Amended Complaint, Gomes adds that, because of the bad marks on his credit report, he had to provide a $20,000 security deposit and $100,000 mortgage on behalf of his construction company. See First Amended Complaint ¶ 103. He says he also paid a higher interest rate on a loan he obtained for a truck purchase because of his allegedly damaged credit score. Id. ¶ 104.

Gomes complains that Bank of America told him that, to be considered for a loan modification, he had to be delinquent. He testified in his deposition, however, that after that statement was made, he continued to make payments on his mortgage and only stopped paying his mortgage when he ran out of money. See Deposition of Leonard Gomes, Jr., at 70-71, ECF No. 43-3.

In his deposition, Gomes admitted to having had money trouble since the fall of 2008. In September or October 2008, Gomes had an approximate principal balance of $90,000 on his Wells Fargo credit card. When he fell 30 days behind in his payments, Wells Fargo offered him a 15% reduction in the principal and a no-interest 7-year payment plan to pay it off. Gomes concedes that that modification affected his credit score. See Gomes Depo. at 18-19.

Gomes says that, given the many mortgage payments he has, he cannot say what the balance is on each one. See id. at 29. He says that, in a good year, his construction business made about $120,000. Id. at 24. At one point, he had six mortgages on five properties. Id. at 63. He testified in his deposition that, in August of 2009, he was in default on three mortgages. He testified that each default negatively affected his credit score. Id. at 64-65.

For example, Gomes testified that he defaulted on a $500,000 mortgage in August 2009, when he was delinquent for four months. Id. at 29-30. Gomes testified that, although he brought that loan current, he defaulted again in December 2011 and made no further payment on that loan as of the time of his deposition in February 2013. Id. at 30-31. Gomes conceded that the default affected his credit score. Id. at 31-32.

Gomes testified that he also defaulted on a $400,000 loan with American Savings Bank in August 2009. See id. at 33. He says that he became current on that loan in April 2010. Id. at 34. He concedes that this default affected his credit score. Id.

In testifying about the 2007 $650,000 loan at issue in this case, Gomes said that he had obtained prior loans and understood that, if he defaulted on his payments, his credit score would be affected. See id. at 41-42. Michele C. Sexton of Bank of America testified that Bank of America was the loan servicer for Gomes's loan, number xxxxx5420, for the property on Hokulani Street. See Sexton Decl. ¶¶ 2, 6, ECF No. 43-4. Since October 31, 2012, the loan servicer of Gomes's loan has been Specialized Loan Servicing. Id. ¶ 6.

Gomes testified that, since July 2009, he has made no payments on his loan because he has been unable to do so for financial reasons. See Gomes Test. at 66 ("Q: And as of today, you haven't made any payments on this loan since 2009, is that correct? A: That's correct. Q: Is that simply because you haven't had the ability to make those payments since 2009? A: Correct.") and at 51 (indicating that Gomes made no payments from July 2009 to August 2010 because he was financially unable to do so).

On September 16, 2009, Bank of America mailed Gomes a Notice of Intent to Accelerate. See ECF No. 43-8. To cure the default, Gomes was allegedly told he had to pay $9,229.58, which included the monthly charges and late fees owed. Id. By the time the notice was sent to Gomes, Gomes had allegedly submitted two loan modification requests, one on May 2, 2009, and another on August 28, 2009. Gomes says he did not hear back from Bank of America on either of these requests. See Affidavit of Leonard Gomes, Jr., ¶¶ 4-6, ECF No. 47-1.

On September 24, 2009, Gomes allegedly called Bank of America and spoke with "Sarah." Gomes says that Sarah took his financial information over the phone and told him that she would send out another loan modification application. Id. ¶ 8.

In December 2009, Gomes allegedly received a debt collection notice from Bank of America's attorneys, Routh Crabtree Olson. This notice told Gomes that the law firm had been retained to initiate foreclosure proceedings. See id. ¶ 10. Gomes says that, in response, he sent updated financial information to Bank of America on December 20, 2009. Id. ¶ 11.

Gomes says that, on or about January 20, 2010, he called Bank of America and spoke with "James." Gomes says that James told him that, based on the financial information Gomes had given James, he would be approved for a HAMP loan modification, provided he could send documentation ...


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