Alston v. Fed. Home Loan Mortg. Corp.
| Decision Date | 17 March 2022 |
| Docket Number | DLB-20-3272 |
| Court | U.S. District Court — District of Maryland |
| Parties | YVONNE ALSTON, Plaintiff, v. FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendant. |
Plaintiff Yvonne Alston, the mortgagee of a property in Largo Maryland, filed a complaint against the Federal Home Loan Mortgage Corporation (“FHLMC”) in the Circuit Court of Prince George's County and alleged FHLMC violated 15 U.S.C. § 1641(g)(1) of the Truth in Lending Act (“TILA”) and 15 U.S.C. § 1691(a) of the Equal Credit Opportunity Act (“ECOA”). ECF 4. FHLMC removed the case to the District of Maryland pursuant to 12 U.S.C. § 1452(f). ECF 1. Pending before the Court is FHLMC's motion to dismiss Ms. Alston's first amended complaint. ECF 22. The motion is ripe for disposition. ECF 23 & 24. Because Ms. Alston has failed to allege facts sufficient to establish Article III standing to assert the TILA and ECOA claims, the Court dismisses the first amended complaint for lack of subject matter jurisdiction.
For purposes of deciding the motion to dismiss, the Court accepts all facts pleaded in the first amended complaint as true. Plaintiff Yvonne Alston, an African-American female, has a personal residence in Largo, Maryland. ECF 19 (First Amended Complaint), ¶ 4. In 2013, she refinanced the mortgage on her home. Id. ¶ 5. Virginia Heritage Bank was the lender who refinanced the loan. Id. ¶ 6. BB&T acquired the servicing of the loan. Id. ¶ 7.
In 2020, Ms. Alston requested a modification of her loan and cited the Covid-19 pandemic's effect on the economy as the reason. Id. ¶ 8. In a letter dated June 3, 2020, BB&T confirmed receipt of her modification request and informed her that FHLMC had acquired her loan. Id. ¶ 9. This news came as a surprise to Ms. Alston. Id. ¶ 10. She alleges that, prior to her receipt of the June 3, 2020 letter, FHLMC had not informed her that it owned her loan, and FHLMC had not recorded the assignment in the land records. Id. ¶¶ 11-12.
Ms. Alston alleges that, “[u]pon information and belief, after FHLMC failed to disclose its ownership in the loan to” her “within 30-days of acquiring the loan, FHLMC and BB&T intentionally withheld that information from [her] because FHLMC did not want to provide any notice to [her] that it violated the law.” Id. ¶ 13. Plaintiff alleges FHLMC's failure to disclose it owned the loan “was important and significant” because FHLMC operates “more favorable loan modification programs that non-quasi government lenders, such as Virginia Heritage Bank.” Id. ¶ 14. Ms. Alston further alleges “she was hampered in devising an appropriate approach to negotiate a loan modification” because she was deprived of the knowledge that FHLMC owned her loan. Id. ¶ 15. Also “[u]pon information and belief, ” she alleges that FHLMC “purposely” utilizes “inadequate procedures and practices for notifying borrowers that it is the owner of loans because FHLMC desires to avoid its obligations imposed upon it by the government” and unwitting borrowers “will not make any requests upon FHLMC.” Id. ¶ 16.
BB&T either processed Ms. Alston's loan modification request or sent the request to FHLMC, and the request was denied. Id. ¶¶ 17-18. “Alternatively, FHLMC empowered BB&T” to render a decision on Ms. Alston's request “and instructed or regulated how BB&T would decide whether a consumer's loan, such as Ms. Alston's loan, would be modified or not.” Id. ¶ 19. In processing Ms. Alston's request, either FHLMC or BB&T acquired an appraisal of Ms. Alston's property but did not provide Ms. Alston a copy of that appraisal. Id. ¶¶ 20-21. In a July 22, 2020 letter, BB&T “apprised Ms. Alston that an appraisal was ‘prepared using various models and techniques proprietary to” BB&T and “in accordance with” FHLMC's guidelines. Id. ¶ 22. Because FHLMC did not provide Ms. Alston a copy of the appraisal, “she did not fully understand why her application was denied” and her ability to challenge the denial was hampered. Id. ¶ 23.
Ms. Alston asserts that FHLMC violated TILA by “failing to notify” her “that the ownership of [her] loan had been transferred to it.” Id. ¶ 26. She further alleges this “violation caused her not to successfully modify her loan or obtain other available relief.” Id. ¶ 27. She seeks actual and statutory damages and attorneys' fees under TILA. Id. ¶ 28. She also asserts that, under ECOA, FHLMC was required to give her a copy of the appraisal or valuation used in the evaluation of her application, that it failed to do so in violation of the statute, and that the “violation caused her not to successfully modify her loan or obtain other relief available.” Id. ¶¶ 34, 35, 40. She alleges, upon information and belief, that FHLMC “does not provide female borrowers or borrowers residing in majority black neighborhoods with copies of their appraisals with the same frequency that it provides borrowers with copies of their appraisals that live in majority white neighborhoods or men borrowers.” Id. ¶ 24. She asserts FHLMC willfully and intentionally chose not to provide her with a copy of the appraisal. Id. ¶¶ 38, 39. She seeks actual, statutory, and punitive damages under ECOA. Id. ¶ 40.
FHLMC filed a motion to dismiss Ms. Alston's first amended complaint or, in the alternative, for summary judgment. ECF 22. FHLMC argues plaintiff lacks Article III standing as to both claims, fails to state a claim under ECOA, and untimely filed her TILA claim. FHLMC alternatively argues that the TILA claim is barred by a general release provision of a settlement agreement between Ms. Alston and BB&T.
FHLMC styled its motion to dismiss as one under Federal Rule of Civil Procedure 12(b)(6), or, in the alternative, as one under Rule 56. As one ground for dismissal, FHLMC argues Ms. Alston lacks Article III standing to bring her claims. “Standing ‘is a threshold jurisdictional question' that ensures a suit is ‘appropriate for the exercise of the [federal] courts' judicial powers.'” Dreher v. Experian Info. Sols., Inc., 856 F.3d 337, 343 (4th Cir. 2017) (quoting Pye v. United States, 269 F.3d 459, 466 (4th Cir. 2001) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 102 S.Ct. 1003 (1998))). “When a defendant moves to dismiss a plaintiff's claim for lack of standing, courts commonly address the motion under 12(b)(1).” Richardson v. Mayor and City Council of Balt., No. RDB-13-1924, 2014 WL 602111, at *1 (D. Md. Jan. 7, 2014).
The standard of review, however, in this case is the same as the Rule 12(b)(6) standard because FHLMC lodges a facial challenge to standing. “In a facial challenge, the defendant contends that the complaint ‘fails to allege facts upon which [standing] can be based,' and the plaintiff ‘is afforded the same procedural protection' that exists on a motion to dismiss.'” Overby v. Mayor of Balt., 930 F.3d 215, 227 (4th Cir. 2019) (quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). “Ordinarily, ‘[f]or purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Ali v. Hogan, 496 F.Supp.3d 917, 922 (D. Md. 2020) (quoting Warth v. Seldin, 422 U.S. 490, 501 (1975)), aff'd as modified, 26 F.4th 587 (4th Cir. 2022). However, “[w]hile, in considering a motion to dismiss, [a court] accept[s] properly pled factual allegations as true and construe[s] them in the light most favorable to the plaintiff, ‘wholly vague and conclusory allegations are not sufficient to withstand a motion to dismiss.'” Doe v. Va. Dept. of State Police, 713 F.3d 745, 754 (4th Cir. 2013) (quoting Catholic League for Religious and Civil Rights v. City and Cnty. of S.F., 624 F.3d 1043, 1080 (9th Cir. 2010) (quoting Mann v. City of Tuscon, 782 F.2d 790, 793 (9th Cir. 1986) (per curiam))). “[T]he motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009).
Article III standing requires that a plaintiff have: “(1) suffered an injury-in-fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., 892 F.3d 613, 619-20 (4th Cir. 2018) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)).
“[T]o establish [an] injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Trapp v. SunTrust Bank, 699 Fed.Appx. 114, 145 (4th Cir. 2017) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992))). “A ‘concrete' injury must be ‘de facto'; that is, it must actually exist.” Spokeo, 578 U.S. at 340. It need not, however, be “tangible.” Id.
Plaintiff alleges a concrete injury. She claims she did not successfully modify her loan because of FHLMC's violations of TILA and ECOA. ECF 19, ¶¶ 27 & 40. Although she does not specifically allege that a loan modification would have improved her financial situation, she does allege she sought a modification “due to Covid-19 ramifications in the economy, ” id. ¶ 8, and from this, the Court can infer a loan modification would have been financially favorable to her. This is more than a “mere procedural statutory violation, ” as defendant argues. See Spokeo, 578 U.S. at 342. The denial of a loan modification involves harm to a legally protected financial interest for purposes of standing. See Cotrell v. Alcon...
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