Filed: Oct. 07, 2016
Latest Update: Mar. 03, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-1444 RENEE L. MCCRAY, Plaintiff - Appellant, v. FEDERAL HOME LOAN MORTGAGE CORPORATION; WELLS FARGO BANK, N.A.; SAMUEL I. WHITE, P.C.; JOHN E. DRISCOLL, III; ROBERT E. FRAZIER; JANA M. GANTT; LAURA D. HARRIS; KIMBERLY LANE BITT; DEENA L. REYNOLDS, Substitute Trustees; JOHN DOES, 1-20; WELLS FARGO HOME MORTGAGE, d/b/a America’s Servicing Company, Defendants - Appellees. Appeal from the United States District Court for the Dist
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-1444 RENEE L. MCCRAY, Plaintiff - Appellant, v. FEDERAL HOME LOAN MORTGAGE CORPORATION; WELLS FARGO BANK, N.A.; SAMUEL I. WHITE, P.C.; JOHN E. DRISCOLL, III; ROBERT E. FRAZIER; JANA M. GANTT; LAURA D. HARRIS; KIMBERLY LANE BITT; DEENA L. REYNOLDS, Substitute Trustees; JOHN DOES, 1-20; WELLS FARGO HOME MORTGAGE, d/b/a America’s Servicing Company, Defendants - Appellees. Appeal from the United States District Court for the Distr..
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1444
RENEE L. MCCRAY,
Plaintiff - Appellant,
v.
FEDERAL HOME LOAN MORTGAGE CORPORATION; WELLS FARGO BANK,
N.A.; SAMUEL I. WHITE, P.C.; JOHN E. DRISCOLL, III; ROBERT E.
FRAZIER; JANA M. GANTT; LAURA D. HARRIS; KIMBERLY LANE BITT;
DEENA L. REYNOLDS, Substitute Trustees; JOHN DOES, 1-20;
WELLS FARGO HOME MORTGAGE, d/b/a America’s Servicing Company,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. George L. Russell, III, District Judge.
(1:13-cv-01518-GLR)
Argued: May 10, 2016 Decided: October 7, 2016
Before NIEMEYER and WYNN, Circuit Judges, and Thomas E.
JOHNSTON, United States District Judge for the Southern District
of West Virginia, sitting by designation.
Affirmed in part, reversed in part, and remanded by published
opinion. Judge Niemeyer wrote the opinion, in which Judge Wynn
joined. Judge Johnston wrote a separate opinion concurring in
part and dissenting in part.
Kenzie Marie Rakes, MEYNARDIE & NANNEY, PLLC, Raleigh, North
Carolina, for Appellant. Robert Harvey Hillman, SAMUEL I.
WHITE, PC, Rockville, Maryland; Michael S. Barranco, TREANOR
POPE & HUGHES, P.A., Towson, Maryland, for Appellees.
2
NIEMEYER, Circuit Judge:
In connection with a $66,500 loan secured by a deed of
trust on her house, Renee McCray commenced this action for
damages against the Federal Home Loan Mortgage Corporation
(“Freddie Mac”); Wells Fargo Bank, N.A., and Well Fargo Home
Mortgage (collectively, “Wells Fargo”); Samuel I. White, P.C.
(“the White Firm”); John E. Driscoll, III, Robert E. Frazier,
Jana M. Gantt, Laura D. Harris, Kimberly Lane Bitt, and Deena L.
Reynolds (collectively, “Substitute Trustees”); and John Does,
1-20, alleging that, in the administration of and collection
efforts on the loan, the defendants violated the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.;
the Truth in Lending Act (“TILA”), id. § 1601 et seq., and the
Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C.
§ 2601 et seq. The allegations center primarily on the
defendants’ alleged failure to provide McCray with notices and
requested information as purportedly required by these statutes.
On the defendants’ motions, the district court dismissed
McCray’s FDCPA and TILA claims and, following discovery, granted
Wells Fargo’s motion for summary judgment on her RESPA claim.
On appeal, McCray contends (1) that the district court
erred in concluding that the White Firm and the Substitute
Trustees, who were members of that firm, were not “debt
collectors,” as that term is used in the FDCPA; (2) that the
3
court erred in concluding that McCray failed to allege a cause
of action under TILA when she alleged that Freddie Mac, as the
new owner of her loan, failed to provide her timely notice of
the purchase; and (3) that the court erred in concluding that
Wells Fargo, as servicer of the loan, was not required to
provide McCray with notice when the deed of trust was assigned
to it.
For the reasons that follow, we conclude that McCray
adequately alleged that the White Firm and the Substitute
Trustees were “debt collectors,” as that term is used in the
FDCPA. Accordingly, we reverse the order of dismissal of her
FDCPA claims against them and remand for further proceedings,
without suggesting whether or not those defendants violated the
FDCPA. As to the TILA claims, we affirm.
I
In October 2005, McCray borrowed $66,500 from American Home
Mortgage Corporation to refinance her house, giving American
Home a 30-year note and a deed of trust on her home in Baltimore
City, Maryland, to secure repayment of the note. At some point
after McCray executed the loan documents, American Home sold the
loan to Freddie Mac, and Wells Fargo was retained to service the
loan.
4
For reasons not clear from the record, after making
payments on her mortgage for more than five years, McCray
disputed a monthly billing statement in June 2011 and sent Wells
Fargo a written request for information about the fees and costs
that it was charging and how it was maintaining the escrow
account on the loan. Wells Fargo allegedly failed to respond or
responded inadequately to her request and her follow-up
inquiries.
Again for reasons not clear from the record, McCray stopped
making payments on her mortgage after making the April 2012
payment and thereby went into default, and Wells Fargo retained
the White Firm to pursue foreclosure. By letter dated September
28, 2012, the White Firm informed McCray that the firm had “been
instructed to initiate foreclosure proceedings to foreclose on
the mortgage on [her] property.” The letter concluded with the
statements: “This is an attempt to collect a debt. This is a
communication from a debt collector. Any information obtained
will be used for that purpose.” (Capitalization and emphasis
modified). A few days later, the White Firm sent McCray a more
detailed notice of intent to foreclose, in which the firm
advised McCray that her loan payments were currently “154 days
past due” and that the amount required to cure default was
$4,282.91. The notice also advised McCray of her various
options.
5
Thereafter, several members of the White Firm were
substituted as trustees on the deed of trust to facilitate
foreclosure, and in February 2013, the Substitute Trustees filed
an order to docket a foreclosure action in the Circuit Court for
Baltimore City, which McCray has resisted. That proceeding is
still pending.
Shortly after the Substitute Trustees commenced the
foreclosure proceeding in state court, McCray commenced this
action for damages, challenging the amount of her debt and the
manner in which the defendants administered the loan. More
particularly, she alleged that the defendants “continu[ed] to
collect on an alleged debt without proper validation”; that the
defendants did not respond to written requests for information
and follow-up requests in a timely manner; that the defendants
refused to provide her with all the information that she
requested; that she was never given notice of the assignment of
her deed of trust to Wells Fargo for purposes of servicing the
loan; and that she never received notice of the alleged sale of
the loan to Freddie Mac, all with the consequence that the
defendants “attempted to collect an alleged debt under false,
deceptive, and misleading means and stated an inaccurate
character, amount and status of said debt.”
Wells Fargo and Freddie Mac filed a motion to dismiss
McCray’s complaint or, in the alternative, a motion for summary
6
judgment, and the White Firm and the Substitute Trustees filed a
motion to dismiss the complaint for failure to state a claim.
The district court granted the motions to dismiss McCray’s FDCPA
and TILA claims and, with respect to her RESPA claim, granted
summary judgment.
In dismissing McCray’s FDCPA claim against the White Firm
and the Substitute Trustees, the district court concluded that
McCray had failed to allege sufficiently that they were “debt
collectors” under the FDCPA. The court distinguished these
defendants’ role in initiating foreclosure proceedings from a
role focused on collecting the debt, explaining:
Even when a communication includes, “This is an
attempt to collect a debt,” it is not an attempt to
collect a debt unless there is an express demand for
payment and other “specific information about the
debt, including the amount of the debt, the creditor
to whom the debt is owed, the procedure for validating
the debt, and to whom the debt should be paid.”
[Blagogee v. Equity Trustees, LLC, No. 1:10-CV-13
(GBL-IDD); 2010 WL 2933963,] at *5-6 [(E.D. Va. July
26, 2010)].
Applying Blagogee to the alleged facts, the court concluded that
McCray had failed to “allege any facts indicating that [the
White Firm and the Substitute Trustees] were engaged in any
attempt to collect her debt.”
In dismissing McCray’s FDCPA claim against Wells Fargo and
Freddie Mac, the district court concluded that those defendants
7
were not subject to liability under the FDCPA because they were
“creditors, not debt collectors.”
In dismissing McCray’s TILA claim against Freddie Mac for
failing to provide notice that it had purchased her loan, in
violation of 15 U.S.C. § 1641(g), the court noted that the cause
of action was not created by Congress until 2009, and the
complaint, which described a 2005 loan and its sale to Freddie
Mac on an unspecified date, failed to allege that the sale to
Freddie Mac occurred after 2009. In addition, the court noted
that, while McCray was notified in October 2011 that Freddie Mac
was the owner of her loan, she failed to bring her TILA claim
until May 23, 2013, beyond TILA’s one-year statute of
limitations.
In dismissing her TILA claim against Wells Fargo for
failing to provide notice that the deed of trust had been
assigned to it, the court explained that because Wells Fargo
received only a “beneficial interest” as necessary to service
the loan and not legal title, the assignment did “not implicate”
the notification requirement in § 1641(g).
After discovery on the remaining RESPA claim against Wells
Fargo, the district court granted Wells Fargo’s motion for
summary judgment.
8
From the district court’s final judgment dated March 27,
2015, McCray filed this appeal, presenting three distinct
issues, which we now address.
II
McCray contends first that the district court erred in
concluding that her complaint failed to allege sufficient facts
to establish that the White Firm and the Substitute Trustees
were “debt collectors” subject to the FDCPA’s regulation. She
maintains that the complaint sufficiently alleged these
defendants’ debt collection role when it alleged that the firm
is a “debt collection law firm” that employed the Substitute
Trustees, and that the firm sent her a “Notice of Intent to
Foreclose” with the statement, “This is an attempt to collect a
debt,” before initiating a foreclosure proceeding in the name of
the Substitute Trustees and on behalf of Wells Fargo and Freddie
Mac. She argues that these facts were sufficient to demonstrate
that the White Firm and the Substitute Trustees “regularly
collect[ed] or attempt[ed] to collect debts, [and] use[d] the
mail to send her a letter to attempt to collect a debt,” owed or
due another, which qualified those defendants as “debt
collectors” under the FDCPA, 15 U.S.C. § 1692a(6).
The White Firm and the Substitute Trustees contend that the
district court properly concluded that McCray’s complaint failed
9
to allege their status as debt collectors because “McCray failed
to plead any facts indicating that [they] had made any demands
for payment, or that they in any way communicated deadlines and
penalties for McCray’s failure to make any payment.” (Emphasis
added). They argue, “All of the pled actions . . . occurred in
connection with the enforcement of security interests in real
property,” rendering them “fundamentally distinct from a debt
collection activity covered under the FDCPA.” They explain that
a foreclosure action in Maryland is not designed “to obtain
payment on an underlying debt,” but rather serves the more
limited role of “terminat[ing] the ownership interests of the
mortgagor in the property and . . . foreclos[ing] [her] right of
redemption by the trustee[s’] sale, so that the property can
then be transferred free and clear of the mortgagor’s interest
by the secured party.” They contend, therefore, that “up to the
point when the actual collection of money is sought, there has
been no debt collection activity undertaken.” They also contend
that their activity was only “incidental to a bona fide
fiduciary obligation” and therefore excluded from regulation by
an exception contained in the FDCPA’s definition of “debt
collector.”
The question thus presented is whether the White Firm and
the Substitute Trustees, who regularly pursue foreclosure on
behalf of creditors, were acting as “debt collectors,” as that
10
term is defined by § 1692a(6), when they pursued foreclosure
against McCray after she defaulted on her loan.
The FDCPA defines the term “debt collector” to include
generally “any person [1] who uses any instrumentality of
interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or [2] who
regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6) (emphasis added). The
definition excludes “any person collecting or attempting to
collect any debt owed or due or asserted to be owed or due
another to the extent such activity . . . is incidental to a
bona fide fiduciary obligation.” Id. § 1692a(6)(F)(i).
The FDCPA’s definition of debt collector, however, does not
include any requirement that a debt collector be engaged in an
activity by which it makes a “demand for payment,” as the White
Firm and the Substitute Trustees claim. They argue that the
notice letters and papers they used to initiate foreclosure
proceedings were somehow to be distinguished from letters
amounting to actual debt collection efforts, maintaining that
foreclosure papers are not an attempt to collect a debt unless,
as the district court explained, they contain an “express demand
for payment or specific information about her debt.” (Internal
quotation marks and citation omitted).
11
As we have previously explained, however, “nothing in [the]
language [of the FDCPA] requires that a debt collector’s
misrepresentation [or other violative actions] be made as part
of an express demand for payment or even as part of an action
designed to induce the debtor to pay.” Powell v. Palisades
Acquisition XVI, LLC, 782 F.3d 119, 123 (4th Cir. 2014) (second
emphasis added). To the contrary, we concluded that, “to be
actionable under . . . the FDCPA, a debt collector needs only to
have used a prohibited practice ‘in connection with the
collection of any debt’ or in an ‘attempt to collect any debt.’”
Id. at 124; see also Sayyed v. Wolpoff & Abramson,
485 F.3d 226,
229-34 (4th Cir. 2007); Wilson v. Draper & Goldberg, P.L.L.C.,
443 F.3d 373, 375-77 (4th Cir. 2006).
In Powell, we held that a law firm’s filing of an
“assignment of judgment” in a debt collection action qualified
as a debt collection activity that triggered the protections of
the FDCPA. 782 F.3d at 120-21. Similarly, in Sayyed, we held
that a motion for summary judgment filed in a debt collection
action was “subject to the provisions of [the]
FDCPA.” 485 F.3d
at 234. And in Wilson, we held that a law firm that provided
notice that it was preparing foreclosure papers and that
thereafter initiated foreclosure proceedings could be a debt
collector as defined by the
FDCPA. 443 F.3d at 374-76. Indeed,
Wilson directly controls this case.
12
In Wilson, a lender had retained a law firm and one of its
attorneys “to foreclose on [the plaintiff’s] property due to her
alleged failure to make mortgage payments.” 443 F.3d at 374.
The law firm and attorney wrote to the plaintiff “to announce
that she was in default on her loan and that they were preparing
foreclosure papers.”
Id. They also sent her a “validation of
debt notice” pursuant to the FDCPA, which gave specific
information concerning the amount of debt, the identity of the
creditor, and the procedures for validating the debt.
Id. at
374-75. We concluded that the law firm and the attorney were
debt collectors under the FDCPA, holding that “Defendants’
foreclosure action was an attempt to collect a ‘debt.’”
Id. at
378.
Particularly relevant to the defendants’ arguments here, in
Wilson we explicitly rejected the argument “that foreclosure by
a trustee under a deed of trust is not the enforcement of an
obligation to pay money or a ‘debt,’ but is [merely] a
termination of the debtor’s equity of redemption relating to the
debtor’s property.” 443 F.3d at 376. We explained that the
plaintiff’s “‘debt’ remained a ‘debt’ even after foreclosure
proceedings commenced” and that “Defendants’ actions surrounding
the foreclosure proceeding were attempts to collect that debt.”
Id. We also noted the consequence if that were not so:
13
Defendants’ argument, if accepted, would create an
enormous loophole in the Act immunizing any debt from
coverage if that debt happened to be secured by a real
property interest and foreclosure proceedings were
used to collect the debt. We see no reason to make an
exception to the Act when the debt collector uses
foreclosure instead of other methods.
Id.
It is clear from the complaint in this case that the whole
reason that the White Firm and its members were retained by
Wells Fargo was to attempt, through the process of foreclosure,
to collect on the $66,500 loan in default. McCray’s complaint
alleged that the White Firm is a “debt collection law firm” that
mailed her a notice of intent to foreclose, which explicitly
stated that it was attempting to collect on her debt, and that
then filed a foreclosure action against her property. While her
complaint referred to and described in part the notice of intent
to foreclose, the defendants included a full copy of an October
2, 2012 notice as an attachment to their motion to dismiss.
That notice provided:
You have missed one or more payments on your mortgage
loan or you are otherwise in default. If you do not
bring the loan current, otherwise cure the default, or
reach an agreement with your mortgage company to avoid
foreclosure (such as a loan modification, repayment
plan, or other alternative to foreclosure), a
foreclosure action may be filed in court as early as
45 days from the date of this notice.
(Emphasis added). The notice also included specific loan
information, such as the name of the lender, the date of
14
default, and the total amount required to cure the default.
Finally, the notice included a letter detailing loan mitigation
programs, which ended with the statement, “This communication is
an attempt to collect a debt.”
These facts, construed in the light most favorable to
McCray on a motion to dismiss under Rule 12(b)(6), indeed show
that the White Firm and its members were seeking repayment of a
debt -- i.e., attempting to collect on a debt. See 15 U.S.C.
§ 1692a(6). They stated in their notice to McCray that they
were pursuing foreclosure because McCray had “missed one or more
payments.” They noted that if McCray did not “bring the loan
current . . . such as [by] repayment . . . , a foreclosure
action may be filed in court.” In addition, they provided
McCray with the nature of default and the amount necessary to
cure the default, concluding that the communication was “an
attempt to collect a debt.” Thus, all of the defendants’
activities were taken in connection with the collection of a
debt or in an attempt to collect a debt.
As to the White Firm and Substitute Trustees’ argument that
their actions in foreclosing on the property were “incidental to
[their] fiduciary obligation” and therefore fell within the
definitional exception contained in § 1692a(6)(F)(i), we also
rejected that argument in Wilson, concluding that foreclosure
15
was “central” to the trustee’s fiduciary obligation under the
deed of trust. Id. at 377.
The White Firm and the Substitute Trustees argue in the
alternative that even if they acted as debt collectors, any
violations of the FDCPA that they might have committed were not
material. But the district court did not reach this argument,
and we decline to address it on appeal.
In sum, we hold that McCray’s complaint adequately alleges
that the White Firm and the Substitute Trustees were debt
collectors and that their actions in pursuing foreclosure
constituted a step in collecting debt and thus debt collection
activity that is regulated by the FDCPA.
III
McCray also contends that the district court erred in
dismissing her claim against Freddie Mac, asserting that Freddie
Mac violated TILA, 15 U.S.C. § 1641(g), by failing to give her
notice of its purchase of her loan. Section 1641(g) provides
that “not later than 30 days after the date on which a mortgage
loan is sold or otherwise transferred or assigned to a third
party, the creditor that is the new owner or assignee of the
debt shall notify the borrower in writing of such transfer.”
Id. § 1641(g)(1). Congress added this provision to TILA in
16
2009. See Helping Families Save Their Homes Act of 2009, Pub.
L. No. 111-22, § 404(g), 123 Stat. 1632, 1658 (2009).
The district court dismissed this claim against Freddie Mac
on the ground that McCray failed to “allege any sale, transfer,
or assignment of her loan to Freddie Mac after Congress amended
TILA to require notice.” The court concluded alternatively that
because Wells Fargo informed McCray by a letter dated October
25, 2011, that Freddie Mac was the “investor” on the loan,
McCray had notice of her claim as of that time and was therefore
barred by the statute’s one-year limitations period, see 15
U.S.C. § 1640(e), since she did not file the claim until May
2013.
McCray provides no challenge to the district court’s
conclusion that she failed to state her claim because she failed
to allege the sale of her loan after 2009. ∗ And with respect to
the district court’s alternative ruling on limitations, she
argues that the October 25, 2011 letter was not part of her
complaint but was attached to the defendants’ motion to dismiss.
Because the court ruled on the motion to dismiss without
converting the motion to one for summary judgment, she maintains
∗Indeed, in a letter dated January 10, 2012, from Wells
Fargo to McCray, which was part of the summary judgment record,
Wells Fargo informed McCray that her loan was “sold on the
secondary market to Federal Home Loan Mortgage Corporation,
known as Freddie Mac, on November 14, 2005.”
17
that it erred, failing to give her a reasonable opportunity to
present her response. In her affidavit in support of her
response, McCray did, however, state that she received a letter
from Wells Fargo in December 2011, which again repeated the fact
that “[t]he investor/noteholder for this loan is [Freddie Mac].”
Inasmuch as McCray has failed to challenge the district
court’s ruling that she failed to allege a transaction after the
notice requirement was added in 2009, we affirm the district
court’s decision. See United States ex rel. Ubl v. IIF Data
Solutions, 650 F.3d 445, 456 (4th Cir. 2011) (“[T]he failure of
a party in its opening brief to challenge an alternate ground
for a district court’s ruling given by the district court waives
that challenge” (quoting Rodriguez v. Hayes,
591 F.3d 1105, 1118
n.6 (9th Cir. 2010))); Sapuppo v. Allstate Floridian Ins. Co.,
739 F.3d 678, 680 (11th Cir. 2014) (“When an appellant fails to
challenge properly on appeal one of the grounds on which the
district court based its judgment, he is deemed to have
abandoned any challenge of that ground, and it follows that the
judgment is due to be affirmed”). And similarly, because McCray
seems to concede that at least as of December 2011, she had
notice that Freddie Mac was the owner of her loan, we affirm the
district court’s alternative conclusion that the claim was
barred by TILA’s one-year statute of limitations.
18
IV
Finally, McCray contends that the district court erred in
dismissing her claim against Wells Fargo for failing to give her
notice of the assignment of the deed of trust to it, in
violation of 15 U.S.C. § 1641(g). While the complaint alleges
that Wells Fargo was assigned an interest in the deed of trust,
the court dismissed McCray’s claim because Wells Fargo received
only a “beneficial interest, not legal title,” in order to
service the loan. The court concluded that such a limited
assignment does not implicate § 1641(g).
On appeal, McCray concedes that “the statute is usually
interpreted to mean that notice is required only when legal
title to the debt obligation is transferred.” See 12 C.F.R.
§ 1026.39(a)(1); see also 15 U.S.C. § 1641(g) (providing that,
within 30 days after “the date on which a mortgage loan is sold
or otherwise transferred,” the creditor “that is the new owner
or assignee of the debt” must make certain notifications to the
borrower). She also does not challenge the district court’s
conclusion that Wells Fargo received a beneficial interest in
the deed of trust in order to service the loan. Rather, she
argues that, in addition to receiving a beneficial interest, the
court could conclude that Wells Fargo also received an ownership
interest based on a line in the deed of trust that reads, “The
Note or a partial interest in the Note (together with this
19
Security Instrument) can be sold.” (Emphasis added). That
statement, however, does not support her claim that the note was
in fact sold to Wells Fargo. Instead, it indicates only that
the note could be sold. Moreover, the inference that she seeks
would be inconsistent with her assertion that Freddie Mac was in
fact the owner and failed to give her timely notice of its
ownership.
In short, we conclude that the district court did not err
in dismissing this claim.
* * *
For the foregoing reasons, we conclude that McCray’s
complaint adequately alleges that the White Firm and the
Substitute Trustees were acting as “debt collectors” as that
term is defined in the FDCPA. Our conclusion, however, is not
to be construed to indicate, one way or the other, whether they,
as debt collectors, violated the FDCPA. We also conclude that
the district court did not err in dismissing McCray’s TILA
claims. Accordingly, the judgment of the district court is
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED.
20
JOHNSTON, District Judge, concurring in part and dissenting in
part:
I write separately to dissent only from Part IV of the
majority’s well-reasoned opinion. In my view, McCray’s pro se
complaint, liberally construed, sufficiently states a TILA claim
against Wells Fargo.
McCray sued Wells Fargo under a statutory provision that
requires the new owner or assignee of a mortgage loan to notify
the borrower, in writing and within 30 days of the transfer of
the mortgage loan, of the pertinent details surrounding the
transfer and the new owner. McCray alleges that she was not
given such notice, a circumstance that understandably made the
task of identifying the actual owner of the mortgage loan
difficult. That task was further complicated by the fact that
in this case, it appears that McCray’s debt obligation (as the
majority points out, the document whose transfer triggers the §
1641(g) notice provision), was uncoupled and transferred
separately from her deed of trust (a document which McCray does
not dispute confers only a beneficial interest insufficient on
its own to trigger § 1641(g)). In general, the record does not
disclose details about the various transfers of McCray’s loan
documents over the years. What is clear, however, is that Wells
Fargo received an interest in the deed of trust in 2012 and
noted that interest in the public record. McCray duly alleged
21
Wells Fargo’s interest in the operative complaint. With respect
to Freddie Mac, on the other hand, McCray had nothing to go on
but the representations of the defendants in this case.
Notably, her pleading asserts that while the “defendants claim[
] Freddie Mac is the owner of Plaintiff’s Promissory Note,”
there was nothing in the public record indicating that Freddie
Mac had ever received such an interest.
Thus, while McCray’s TILA claims are based on the
understanding that Wells Fargo owned her deed of trust and
Freddie Mac owned her promissory note, her fundamental assertion
was that she did not know who owned her note because she had not
been provided the requisite notice. She then attempted to cast
a wide net by naming both of the entities who appeared to have
some interest in her mortgage loan and alleging that neither
provided her with any notice of any assignment of either her
deed of trust or her promissory note. Given this state of
affairs, I find the majority’s conclusion that McCray asserted
Freddie Mac to be the actual owner of her loan to be an unduly
strict reading of McCray’s pro se complaint.
From McCray’s perspective, she knew that her deed of trust
had been transferred to Wells Fargo and that the deed could be
sold “together” with her note, based on the language of her deed
of trust. She had no information about any transfer involving
her debt obligation. Given that McCray was unaware of who
22
actually owned her note—again because she alleges that she was
not provided statutorily-required notice of the note’s transfer—
I would draw the inference that the majority opinion does not.
That is that liberally construed, McCray’s complaint raises the
inference that the deed and the loan were transferred together
and that Wells Fargo received an interest in both. Her
allegations against Freddie Mac are not inconsistent with that
inference because they are equivocal at best and based on
incomplete information. If Wells Fargo did not in fact receive
an ownership interest, and if Freddie Mac did in fact receive
such an interest prior to 2009, discovery will surely reveal
those facts. At the pleading stage, however, I would find that
McCray has done enough to state a plausible § 1641(g) claim and
put the burden on Wells Fargo to produce the relevant
documentation.
Finally, I would note the irony of dismissing a claim
alleging violation of a notice-giving provision on the basis of
its failure to identify, at the pleading stage, the party who
failed to provide such notice. The discovery process is well-
suited to accomplish this task, and under an appropriately
liberal construction, McCray has done enough to open discovery’s
doors.
Accordingly, I respectfully dissent from the portion of the
majority opinion that upholds the district court’s dismissal of
23
McCray’s TILA claim against Wells Fargo. In all other respects,
I am pleased to concur in the majority opinion.
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