ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

(Re: Docket No. 29)

PAUL S. GREWAL, Magistrate Judge.

Husband and wife Bruce Giac Truong and Lehang Pham (collectively "Plaintiffs") seek, among other things, an order preventing Defendant Aurora Loan Services, LLC ("Aurora") from foreclosing on real property located at 4028 Carracci Lane, San Jose, California 95135 (the "Property"). Aurora moves to dismiss Plaintiffs' First Amended Complaint ("FAC").1 Plaintiffs oppose the motion.2 On May 22, 2012, the parties appeared for a hearing. Having considered the arguments and evidence presented, the court GRANTS Aurora's motion to dismiss.

I. BACKGROUND

On May 1, 2007, Plaintiffs signed an Adjustable Rate Note ("Note") in the amount of $930,000 in favor of Residential Mortgage Capital ("RMC").3 On May 14, 2007, Plaintiffs recorded a Deed of Trust on the Property which conveyed a security interest in the Property to RMC.4 On July 1, 2007, RMC endorsed and transferred the Note and Deed of Trust to Lehman Brothers Bank, FSB ("Lehman").5 Lehman in turn endorsed and transferred its interest to a New York Mortgage Backed Security Trust named "Lehman XS Trust Mortgage Pass-Through Certificates, Series 2007-15N ("the Lehman XS Trust").6 Also on July 1, 2007, RMC sold the servicing rights to Aurora.7 On January 22, 2008, RMC ceased business operations.8 On January 29, 2008, the Lehman XS Trust filed a termination notice with the SEC,9 and on March 28, 2008, was dissolved.10

On February 20, 2009, Quality Loan Service Corporation ("Quality Loan Service") initiated foreclosure proceedings against the Plaintiffs by recording a notice of default and election to sell the Property under the deed of trust.11 Quality Loan Service then sent Plaintiffs a notice of trustee's sale, which announced Quality Loan Service's intention to foreclose on the Property on November 30, 2009.12 Quality Loan Service claimed to act on behalf of the original beneficiary under the Deed of Trust, Mortgage Electronic Registration Systems ("MERS"), as well as for the present beneficiary under the Deed of Trust.13 On February 18, 2010, Aurora recorded a Corporate Assignment of Deed of Trust in which MERS, as nominee for RMC, purported to convey the beneficial interest in the Deed of Trust to Aurora.14 On March 24, 2010, Aurora again recorded a Corporate Assignment of Deed of Trust, this time backdated to October 23, 2009.15

Plaintiffs filed this action on December 15, 2011,16 and on March 7, 2012, Plaintiffs amended their complaint.17 Plaintiffs' FAC alleges causes of action for the following: (1) Cancellation of Deed; (2) Slander of Title; (3) Wrongful Foreclosure; (4) violation of Cal. Civ. Code § 2923.5; (5) violation of Cal. Bus. Code § 17200; (6) violation of 12 U.S.C. § 2605 ("RESPA"); and (7) injunctive relief.18

II. LEGAL STANDARDS

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief."19 If a plaintiff fails to proffer "enough facts to state a claim to relief that is plausible on its face," the complaint may be dismissed for failure to state a claim upon which relief may be granted.20 A claim is facially plausible "when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."21 Accordingly, under Fed. R. Civ. P. 12(b)(6), which tests the legal sufficiency of the claims alleged in the complaint, "[d]ismissal can based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory."22

On a motion to dismiss, the court must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party.23 The court's review is limited to the face of the complaint, materials incorporated into the complaint by reference, and matters of which the court may take judicial notice.24 However, the Court need not accept as true allegations that are conclusory, unwarranted deductions of fact, or unreasonable inferences.25 Pro se complaints are held to "less stringent standards than formal pleadings drafted by lawyers."26 The court "has an obligation to construe the pleadings liberally and to afford the [plaintiff] the benefit of any doubt."27 "However, even pro se pleadings must allege facts sufficient to allow a reviewing court to determine whether a claim has been stated."28 "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . that the complaint could not be saved by amendment."29

III. DISCUSSION

The court begins with Plaintiffs' RESPA claim because under hey buddy it provides the basis for this court's jurisdiction over Plaintiffs' remaining state law claims.

Plaintiffs RESPA claim arises out of what it alleges were false responses to its Qualified Written Requests ("QWR").30 Plaintiffs first allege that they sent a QWR to Aurora, and on November 16, 2009, Aurora responded to Plaintiffs' QWR.31 According to Plaintiffs, Aurora misrepresented the true ownership of the Note and Deed of Trust when it responded that the loan was owned by U.S. Bank.32 Plaintiffs allege this was false because on March 28, 2008, the Lehman XS Trust dissolved, and consequently its ownership of the Deed of Trust had already passed through to the certificateholders of the Trust by the date of Aurora's response.33

Plaintiffs also allege that they sent Aurora a second QWR, and that Aurora responded on November 12, 2012.34 Plaintiffs allege that Aurora again misrepresented the true ownership of the Note and Deed of Trust because Aurora represented that the loan was owned by U.S. Bank National Association as trustee for Lehman XS Trust Mortgage Pass-Through Certificates, Series 2007-15N.35 Plaintiffs allege this was false, again because on March 28, 2008, the Lehman XS Trust had already dissolved, and consequently its ownership of the Deed of Trust had already passed through to the certificateholders of the Trust by the date of Aurora's response.36

Plaintiffs allege that they have suffered harm because of Aurora's failure to adequately respond to Plaintiffs' QWR. Specifically, Plaintiffs allege they are unsure which entity holds the Note, and whether Plaintiffs' payments have properly been applied.37 Plaintiffs also allege that they have "suffered actual damages, including but not limited to devastation of their reputation and credit rating, monetary damages, and the impending foreclosure of their home."38

In response, Aurora argues that Plaintiffs' RESPA claim is conclusory because it fails to detail precisely how Plaintiffs' correspondence was a proper QWR.39 Aurora also argues that this cause of action should be dismissed because Plaintiffs have failed to allege any cognizable damages as a result of Aurora's alleged RESPA violation.40

For correspondence to qualify as a QWR, it must contain a statement that explains "the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provide[] sufficient detail to the servicer regarding other information sought by the borrower."41 In addition, the correspondence must seek "information relating to the servicing of [the] loan."42 District courts interpreting RESPA have concluded that "[a] letter cannot be `qualified' under the statute if it does not relate to the servicing of the account, i.e. the allegation of an inaccurate account."43

Plaintiffs' RESPA allegations fall short of those standards. First, Plaintiffs have not alleged that their QWR specified why they believed their account was in error. Plaintiffs also do not allege that their QWR challenged how their loan was serviced, nor have they alleged any particular problems with the servicing of their loan.44 The alleged inaccuracies Aurora complains of relate to the ownership of the loan, not an allegation of inaccurate accounting in its servicing.

Even assuming Plaintiffs' QWR was properly made, Plaintiffs have not plausibly alleged damages as a result of Aurora's failure to respond accurately to the QWR. Instead, Plaintiffs generally allege that Aurora's QWR response caused Plaintiffs to be "unsure," their reputations and credit rating were "devestat[ed]," they suffered "monetary damages," and they feared an "impending foreclosure."45 Actual damages are available to compensate individual claims under section 6 of RESPA,46 but "[a]lleging a breach of RESPA duties alone is not enough. A plaintiff must, at a minimum, allege that the breach resulted in actual damages."47 As previously mentioned, uncertainty and impending harm, as opposed to actual harm, is insufficient to state a claim for damages under RESPA, and Plaintiffs' damages allegations must at least stem from the alleged harm.48

Because Plaintiffs' RESPA claim fails, the court need not address Plaintiffs' remaining state law claims. Given the early stage of the proceedings in this litigation, the court in its discretion declines to exercise jurisdiction over the remaining state law claims, unless and until Plaintiffs are able to plead a viable claim for relief.49 The court therefore dismisses the state law claims without prejudice.

IV. CONCLUSION

Plaintiffs' RESPA claim is dismissed without prejudice for failure to state a claim and with leave to amend. Leave to amend is limited to those claims pled in the complaint and consistent with the rulings above. To the extent plaintiffs intend to assert new or different claims for relief or add new parties, they must make an appropriate application pursuant to Fed. R. Civ. P. 15. Plaintiffs' remaining state law claims are dismissed without prejudice for lack of subject matter jurisdiction. Any amended complaint shall be filed no later than June 28, 2012.

IT IS SO ORDERED.