Thompson v. Citigroup Mortgage Loan Trust 2019-D

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Leila Thompson,
Plaintiff
v. 	Case No. 22-cv-350-SM-SM
Opinion No. 2023 DNH 018
Citigroup Mortgage
Loan Trust 2019-D,
Defendant
O R D E R
Pro se plaintiff Leila Thompson originally brought this
suit in the New Hampshire Superior Court, seeking to enjoin the
planned foreclosure sale of her home. 	She also sought an order
compelling the servicer of her loan to accept $20,000 in grant
money she had received and requiring it to apply that money to
her outstanding balance. 	Finally, Thompson sought a complete
statement of her loan status, including an accounting of
outstanding principal and interest, pay-off amount, and escrow
balance. 	Defendant, Citigroup Mortgage Loan Trust 2019-D
(“Citigroup”) timely removed the proceeding to this court.
Thompson then filed an amended complaint which, liberally
construed, asserts claims under the Real Estate Settlement
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Procedures Act, 12 U.S.C. § 2601 et seq., and Regulation X, 12
C.F.R. § 1024.1 et seq.
Pending before the court is Citigroup’s motion to dismiss.
For the reasons discussed, that motion is denied.
Background
Accepting the complaint’s factual allegations as true – as
the court must at this juncture – the relevant background is as
follows. 	Citigroup holds a mortgage deed conveyed by Thompson
on property located at 61 Middle Road, Deerfield, New Hampshire.
That loan is serviced by Fay Servicing. 	At some point that loan
went into default. 	Thompson then submitted a Loss Mitigation
Application to Fay Servicing and was told that Jorges Flores
would be her contact person and would process her application.
According to Thompson’s complaint:
Mr. Flores never once returned phone calls, or sent
any email or other communication that provided
specific information about what was missing, or need,
for my application. 	Nor did Mr. Flores provide any
status updates. 	In addition, he would not provide an
explanation as to why he would not accept items that
other associates had instructed me would meet the
requirements. 	I was never provided with a clear
timeline including dates, and he simply forwarded my
application for foreclosure referral and deleted my
information from the system. 	Mr. Flores handled my
Loss Mitigation application by not handling my Loss
Mitigation application.
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Amended Complaint (document no. 9) at 2. 	Thompson’s account is
supported by a letter attached to her complaint from Matt
Manning, Director, HomeOwnership Center, at Affordable Housing
Education and Development, Inc. (“AHEAD”). 	In it, Mr. Manning
writes:
Leila Thompson of 61 Middle Road, Deerfield, NH
(NHHAF-1000476) reached out to our organization for
assistance to address her mortgage delinquency and
difficulties working with FAY Servicing. 	Ms. Thompson
has work[ed] diligently towards finding a solution
with Fay that would allow her family to stay in the
home. 	I have contacted Fay on several occasions on
the behalf of Leila and have not been able to get any
real assistance to determine where her application
stands. 	I have been told on multiple occasions that I
will receive a call back, these calls do not happen.
I have also been asked to leave voicemails and
transferred, these calls are not returned.
Please accept this correspondence as a formal request
for Loss Mitigation exemption as it relates to Ms.
Thompsons application. 	Time is of the essence.
Appendix to Amended Complaint (document no. 9-1) at 2, Letter
dated June 15, 2022.
Later that summer, Samantha Marshall, Director of
Programming & Communications at AHEAD, emailed Thompson,
writing:
Hi Leila, I wanted to provide you an update with
conversation I just had with Fay Servicing. 	I called
them today via 312-291-3593 and spoke with Tracy
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within their Loss Mitigation Department. 	I identified
myself as a HUD Housing Counselor and gave her my
agency ID #82773. 	Tracy informed me that your loan
has been forwarded to their Legal Team and she was
unable to provide me with any additional information
or assist me in any way. 	I specifically asked if she
could provide me with a breakdown of legal/foreclosure
fees being charged to your loan and she said no. 	I
specifically asked if she could confirm that they have
received 3 separate loss mitigation applications/
requests from you, and she refused to answer the
question. 	I specifically asked if she could provide
me with the name and contact person for a person
within the Legal Team so I could contact them, and she
said she would let me know I called. 	I again asked if
she could provide me with the Legal Team’s contact
information, she said she could not tell me that.
When I asked one more time for the Legal Team’s
contact information, she yelled at me “I told you no!”
and then hung up the phone.
Unfortunately, at this time my hands are tied as far
as what else I can do to help. 	If you can obtain a
name and contact information for the Legal Team, I
would be happy to contact them on your behalf and try
to work through this situation. 	Due to Fay’s
unwillingness to work with you I suggest you might try
filing a complaint with the Consumer Finance
Protection Bureau (CFPB). 	The link to file a
complaint is here: [link omitted].
Appendix to Amended Complaint at 9.
At some point – it is unclear when - Thompson received a
$20,000 housing grant through the Homeowners Assistance Fund.
It appears those funds were not applied to her mortgage loan and
Fay Servicing scheduled a foreclosure sale of Thompson’s home
for August 23, 2022. 	On August 15, 2022, Thompson filed a pro
se complaint in the New Hampshire Superior Court. 	As noted
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above, she primarily sought to enjoin the scheduled foreclosure
sale of her home. 	Thompson also sought an order compelling
Citigroup/Fay Servicing to credit the $20,000 grant money to the
outstanding balance on her mortgage loan. 	And, finally, she
sought a full accounting or her loan, including a statement of
outstanding principal and interest, an explanation of all fees
charged, and a payoff amount. 	On that same day, the state court
enjoined the pending foreclosure. 	The State court injunction
precluding the foreclosure of Thompson’s mortgage deed remains
in place.
Discussion
The amended complaint and attached correspondences from
employees at AHEAD paint a decidedly unflattering picture of
defendant and its agent, Fay Servicing. 	At a minimum, those
documents raise questions about whether, during the course of
their dealings with Thompson, Citigroup and Fay honored the
common law obligations of good faith and fair dealing implied in
every New Hampshire contract. 	Of course, whether Citigroup and
its agent honored their obligations to Thompson under RESPA and
Regulation X, and whether Thompson is entitled to the relief she
seeks, remains to be seen. 	But, liberally interpreting
Thompson’s pro se complaint, the court concludes that it
adequately alleges the essential elements of viable claims.
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Perhaps with some discovery, and in light of the recent
involvement of legal counsel who are bound by ethical and
professional obligations, the parties might restart the process
and implement it as it was meant to be implemented. 	If not,
either the court or a jury can certainly resolve the parties’
disputes once the record is fully developed.1
Conclusion
For the foregoing reasons, defendant’s Motion to Dismiss
(document no. 10) is denied.
SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
February 21, 2023
cc: 	Leila J. Thompson, pro se
Kevin P. Polansky, Esq.
1 	It likely goes without saying, but ignoring or slow-walking
applications for loss mitigation is not an acceptable practice
and may warrant an award of fees or other sanction if the record
reveals that such practices forced claimant to file suit simply
to obtain relief that should have been afforded in due course
administratively. 	See generally Harkeem v. Adams, 117 N.H. 687,
691 (1977).
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