Moore v. Wells Fargo Bank, N.A.

• Decision Date: 07 November 2018
• Docket Number: No. 18-1564,18-1564
• Citation: 908 F.3d 1050
• Parties: Terrence MOORE and Dixie Moore, Plaintiffs-Appellants, v. WELLS FARGO BANK, N.A., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

908 F.3d 1050

Terrence MOORE and Dixie Moore, Plaintiffs-Appellants,

v.WELLS FARGO BANK, N.A., Defendant-Appellee.

No. 18-1564

United States Court of Appeals, Seventh Circuit.

Argued September 14, 2018

Decided November 7, 2018

Briane F. Pagel, Jr., Attorney, Lawton & Cates SC, Madison, WI, for Plaintiffs-Appellants.

Stephanie L. Dykeman, Ericka Celeste Hammett, Attorneys, Litchfield Cavo, Milwaukee, WI, for Defendant-Appellee.

Before Bauer, Hamilton, and Scudder, Circuit Judges.

Hamilton, Circuit Judge.

Plaintiffs Terrence and Dixie Moore sued Wells Fargo Bank as Mr. Moore’s mortgage servicer under the federal Real Estate Settlement Procedures Act and a similar Wisconsin statute. The Moores allege that Wells Fargo failed to respond adequately to a "qualified written request" for information under those laws. The district court granted summary judgment for Wells Fargo, and we affirm. Terrence Moore’s claims fail on their merits; Dixie Moore’s claims fail for lack of standing.

I. The Real Estate Settlement Procedures Act and Wisconsin Law

The facts of this case are better understood after a brief overview of the laws at issue. The Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq., also known as RESPA, is a consumer protection statute that regulates the activities of mortgage lenders, brokers, servicers, and other businesses that provide services for residential real estate transactions. One provision, § 2605, addresses numerous aspects of the servicing of mortgage loans, including transfers from one servicer to another and the administration of escrow accounts that lenders use to ensure that insurance and property taxes are paid for the mortgaged property.

Section 2605(e) imposes duties on a loan servicer that receives a "qualified written request" for information from a borrower. Written correspondence triggers RESPA if it "includes, or otherwise enables the servicer to identify, the name and account of the borrower; and includes a statement of the reasons for the belief of the borrower ... that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower." § 2605(e)(1)(B); Catalan v. GMAC Mortg. Corp. , 629 F.3d 676, 687 (7th Cir. 2011) ("Any reasonably stated written request for account information can be a qualified written request.").

Section 2605(e)(2) requires the servicer to do one of the following three things no later than 30 business days after receiving a qualified written request from a borrower: (1) make appropriate corrections to the borrower’s account and provide written notice of the corrections to the borrower; (2) after investigating the borrower’s account, provide a written explanation as to why the servicer believes the account does not need correction; or (3) after investigating the borrower’s account, provide the requested information or explain in writing why the information cannot be obtained. The servicer must also include with the response the contact information for an individual who can provide assistance. Id. In § 2605(f), RESPA provides a private right of action for actual damages resulting from violations of § 2605.

Wisconsin law provides similar protection under Wis. Stat. § 224.77, which prohibits mortgage brokers from engaging in a wide range of conduct, including anything that would "violate any provision of this subchapter ... or any federal or state statute." § 224.77(1)(k). This language "essentially points back to the alleged RESPA violation by prohibiting mortgage bankers and brokers from violating any federal statute that regulates their practice." Diedrich v. Ocwen Loan Servicing, LLC , 839 F.3d 583, 587 (7th Cir. 2016). The Wisconsin statute requires mortgage servicers to maintain the competence necessary to maintain their role as a servicer and prohibits them from "engag[ing] in conduct ... that constitutes improper, fraudulent, or dishonest dealing." § 224.77(1)(i), (m). Wisconsin law authorizes private civil actions to recover actual damages for violations of § 224.77. Wis. Stat. § 224.80(2) ; Diedrich , 839 F.3d at 594.

II. The Facts for Summary Judgment

The plaintiffs appeal the district court’s grant of summary judgment, so we review the decision de novo , considering all evidence in the light most favorable to plaintiffs as the nonmoving parties. Carmody v. Bd. of Trustees of Univ. of Illinois , 893 F.3d 397, 401 (7th Cir. 2018). "While we must construe all the facts and reasonable inferences in the light most favorable to the nonmoving party, our favor toward the nonmoving party does not extend to drawing inferences that are supported by only speculation or conjecture." Monroe v. Indiana Dep’t of Transportation , 871 F.3d 495, 503 (7th Cir. 2017) (citation and quotation marks omitted).

Under this standard, summary judgment is appropriate when no admissible evidence shows any dispute of material fact that could lead a jury to rule in the non-moving parties’ favor, entitling the moving party to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it "affects the outcome of the suit." Monroe , 871 F.3d at 503 (citation omitted).

We begin with the undisputed facts of Mr. Moore’s default on his mortgage, his and the lender’s attempts to modify the mortgage, and the foreclosure on the mortgage in state court. We then turn to the qualified written request and response themselves.

A. Mortgage and Loan Modification Agreements

The Moores’ RESPA claims arose after years of struggles to keep up with mortgage payments. Terrence Moore purchased the home he shares with his wife, Dixie Moore, in 2006 with a 30-year adjustable mortgage owned at all relevant times by Deutsche Bank and serviced by Wells Fargo. The loan had a principal balance of $208,050 with an initial interest rate of 7.95% subject to change every six months beginning in 2008, with rates ranging anywhere from 5.625% to 13.95%. Mrs. Moore used an inheritance from her mother to help buy the house, but she was never named as a party to the title of the property, the mortgage, or the promissory note.

In late 2007, Mr. Moore began having difficulty paying his mortgage. As the servicer for the mortgage, Wells Fargo offered one forbearance plan in December 2007 and, as Mr. Moore’s difficulties continued, another in September 2008. During this time, Mr. Moore fell so far behind in his payments that Deutsche Bank filed a foreclosure action. Deutsche Bank voluntarily dismissed that first foreclosure action, though, after Wells Fargo agreed to a loan modification with Mr. Moore in 2009. Despite the loan modification and dismissed foreclosure, Mr. Moore again failed to make the necessary payments. Wells Fargo negotiated a second loan modification agreement in December 2010.

The terms of the 2011 modification set the principal balance as $272,481.95, extended the loan term to 40 years, and changed the loan from an adjustable rate mortgage to a "Step Rate" mortgage with interest set at 2.0% for the first five years, 2.5% in year six, 3.0% in year seven, and 4.0% for the remainder of the loan term.

The first payment under the 2011 modification was due March 1, 2011.

B. Foreclosure and Bankruptcy Proceedings

Mr. Moore failed to comply with the terms of the 2011 modification.¹ Deutsche Bank filed a second foreclosure action. The most critical event for our purposes came on November 13, 2012, when the state trial court entered a judgment of foreclosure against Mr. Moore. He did not appeal the state court’s judgment of foreclosure.²

A sheriff’s sale was initially scheduled for June 4, 2013 but was rescheduled numerous times while the parties tried to find a solution that would allow the Moores to remain in their house. Those efforts included consideration of yet another modification and an attempt to mediate through the state court’s foreclosure mediation program. When these attempts proved unsuccessful, the sheriff’s sale was rescheduled for December 3, 2013.

One month before the rescheduled sale, Mr. Moore filed for Chapter 13 bankruptcy, resulting in an automatic stay of the sale. Negotiations continued. In June 2015, the parties entered into a third modified payment agreement that required Mr. Moore to pay Wells Fargo a lump sum of $9,000 by June 30, 2015. Mr. Moore again failed to do so, prompting Deutsche Bank to seek relief from the stay on December 7, 2015. The sheriff’s sale was rescheduled for March 22, 2016.

Mr. Moore responded by converting his Chapter 13 bankruptcy into a Chapter 7 bankruptcy. That triggered another automatic stay only twelve days before the scheduled sale. On July 13, 2016 the bankruptcy court entered a discharge for the Chapter 7 bankruptcy, and the sheriff’s sale was rescheduled for October 11, 2016.

C. The RESPA "Qualified Written Request"

We now turn to the facts at the center of the Moores’ statutory claims in this appeal. On August 15, 2016, nearly four years after the foreclosure judgment was entered and two months before the scheduled sale, Mr. Moore sent a letter to Wells Fargo explaining the history of the loan and foreclosure from his point of view. Most relevant for RESPA, his letter also asked twenty-two wide-ranging questions about his account. His questions included the identities of whoever owned his mortgage, details about how payments were applied throughout the duration of the loan, the creation of his escrow account, a list of all charges and late fees, and "an identification of each and every modification, forbearance, forgiveness, reinstatement, or other debt-relief or mortgage-relief type program, whether in-house or government-mandated, for which I have ever been considered by any servicer or lender, including the dates on which such program or plan was considered."

Wells Fargo received Mr. Moore’s letter on August 18, 2016 and immediately treated it as a qualified written request. A representative from Wells Fargo called to confirm receipt the next day. Wells Fargo told Mr. Moore that it would respond...