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Berger v. Nationstar Mortg. LLC

United States District Court, D. Minnesota

July 15, 2015

Daniel Berger, on behalf of himself and all others similarly situated, Plaintiff,
Nationstar Mortgage LLC, and Bank of America, N.A., Defendant

For Plaintiff: Carl E. Christensen and Daniel M. Eaton, Christensen Law Office PLLC, Minneapolis, MN; Daniel C. Bryden and Kai H. Richter, Nichols Kaster, PLLP, Minneapolis, MN.

For Nationstar Mortgage LLC., Defendant: Ashley M. DeMinck and Ellen B. Silverman, Hinshaw & Culbertson LLP, Minneapolis, MN; Brett J. Natarelli and Richard E. Gottlieb, BuckleySandler LLP, Chicago, IL.

For Bank of America N.A., Defendant: James W. McGarry, Goodwin Procter LLP, Boston, MA; Keith E. Levenberg, Goodwin Procter LLP, Washington, DC; Mark G. Schroeder, Briggs & Morgan, PA, Minneapolis, MN.

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SUSAN RICHARD NELSON, United States District Judge.


This matter is before the Court on Defendant Bank of America's Motion to Dismiss First Amended Complaint [Doc. No. 32]. For the reasons set forth below, the Court grants Bank of America's motion.


A. Plaintiff's Mortgage Loan and Loan Modification

Plaintiff Daniel Berger (" Plaintiff or " Berger" ) brings this action, on behalf of himself and other similarly-situated homeowners who were allegedly wrongfully treated as being in default on their mortgage, against Defendants Nationstar Mortgage LLC (" Nationstar" ) and Bank of America, N.A. (" Bank of America" ). The lawsuit arises out of Defendants' alleged failure to properly transfer and enforce Plaintiff's modified mortgage loan.

Berger purchased a home in Spring Lake Park, Minnesota on May 22, 2000. (First Am. Compl. ¶ 8 [Doc. No. 22].) On June 29, 2006, Plaintiff obtained a mortgage loan (" Mortgage" ) from Mortgage Electronic Registration Systems, Inc., and the Mortgage was recorded on July 10, 2006. (See id. ¶ 9.) The Mortgage was later assigned to BAC Home Loans Servicing, LP on July 1, 2011, and the assignment (" Assignment" or " Assignment of Mortgage" ) was recorded on July 12, 2011. (See id. ¶ 10.) BAC Home Loans Servicing later merged with Bank of America, and, as a result of this merger, Bank of America became the successor to Plaintiff's Mortgage loan. (Id. ¶ 11.)

Berger applied to modify the terms of his loan through the Home Affordable Modification Program (" HAMP" ). (Id. ¶ 13.) His application was granted and Bank of America executed the loan modification (" Loan Modification" ) on June 24, 2013. (Id. ¶ 14.) The Loan Modification added all of the amounts past due to the principal balance of Plaintiff's promissory note, and Berger's modified payments were set to begin on June 1, 2013 in the amount of $1,317.54 per month. (Id.; Ex. 3, " Loan Modification" at 2 [Doc. No. 22-1].)[1]

On July 18, 2013, Bank of America assigned Plaintiff's loan to Nationstar. (Id.

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¶ 16.) The Assignment included the servicing of Plaintiff's Mortgage. (Id. ¶ 17.) Although the Assignment took place in July 2013, it was not recorded until November 15, 2013. (Id. ¶ 16.) Nationstar admits that it " was not aware of the Bank of America [Loan] Modification" when it sent Berger a " welcome" letter on July 25, 2013, informing Plaintiff that he was $78,859.60 in arrears on the loan he had recently modified. (Nationstar's Answer ¶ 17 [Doc. No. 30]; First Am. Compl. ¶ 17 [Doc. No. 22]; id., Ex. 5, " Nationstar Letter" [Doc. No. 22-1].)

Plaintiff alleges that despite his Loan Modification, Nationstar proceeded to foreclose on his home and sold the home by sheriff's sale to Bank of America on October 4, 2013. (See First Am. Compl. ¶ 18 [Doc. No. 22].) Although Nationstar admits that it sold Plaintiff's home in a non-judicial foreclosure on October 4, 2013, Nationstar denies that it was unwilling to enforce the Loan Modification. (See Nationstar Answer ¶ 18 [Doc. No. 30].) Rather, Nationstar contends that it informed Berger " during a telephone conversation on July 29, 2013, that it would honor the Bank of America Modification, and would accept payments in the Bank of America Modification amount." (See id. ¶ 42) (emphasis original).[2] Nationstar further claims that although Daniel Berger and Jamie Berger both wrote checks to Nationstar on July 29, 2013, when Nationstar attempted to deposit the checks, the Bergers' banks " refused to honor the checks due to insufficient funds in the respective accounts." (Id.) Nationstar contends that it was similarly unable to deposit another check written by Plaintiff on September 26, 2013, in the amount of $734.00, because Berger had insufficient funds in his account. (Id.)

Plaintiff contends that in February 2014, he demanded that both Defendants rescind the October 4, 2013 sheriff's sale. (First Am. Compl. ¶ 19 [Doc. No. 22].) Berger explains that the sale was eventually rescinded because of Defendants' failure to record the Assignment of Plaintiff's Mortgage to Nationstar prior to the sale. (Id. ¶ 20; Nationstar Answer, Ex. A, " Stipulation and Order Rescinding Sale" [Doc. No. 30-1].) As the Court noted above, Defendants did not record the Assignment until November 15, 2013. (First Am. Compl. ¶ 16 [Doc. No. 22].)

Berger argues that he suffered damages as a result of Nationstar's unlawful foreclosure on this home. (Id. ΒΆ 24.) The damages allegedly include unnecessary expenses in defending the wrongful foreclosure, unnecessary damage to Berger's credit rating, ...

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