Cooper v. Wells Fargo Bank, N.A.

Background

Elizabeth Cooper brought a foreclosure-related lawsuit against Wells Fargo Bank, N.A. Wells Fargo moved to dismiss Cooper’s second amended complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally plausible claim. The complaint contained three causes of action under California law.

Loan-modification denial notice

Cooper alleged that Wells Fargo violated California Civil Code § 2923.6(f) by failing to disclose the basis for denying her loan-modification application. She specifically argued that the denial letter did not provide information about investor disallowance or a net present value calculation.

The court rejected this claim as insufficiently pleaded. It relied on the denial letter, which stated that Wells Fargo could not create an affordable mortgage payment based on the documentation provided and Cooper’s monthly income, and identified the program involved. The court also found no indication in the letter or the complaint that Wells Fargo denied the application because of investor disallowance or a net present value calculation. The court stated that California’s Homeowners Bill of Rights did not require a lender to perform a net present value calculation in every loan-modification application.

Single point of contact

Cooper also alleged that Wells Fargo violated California Civil Code § 2923.7, which requires a mortgage servicer to provide a borrower with a single point of contact who can communicate current information about foreclosure-prevention options and coordinate related documents and decisions.

One complaint concerned the recording of a notice of default before Cooper could gather documents requested for a Home Preservation program. The court said that allegation concerned a different law addressing the practice of pursuing foreclosure while considering loss-mitigation options.

Cooper’s second complaint concerned a notice of trustee’s sale issued in February 2020. She alleged that she had not received a denial of her appeal before the notice was issued and that the single point of contact told her the appeal was still pending. Because Wells Fargo took the position that it had denied the appeal before issuing the notice, the court said Cooper might have had enough to support a violation involving access to current status information.

The court nevertheless held that Cooper had not alleged a material violation, meaning a significant violation supporting the requested injunction. At the hearing, Cooper suggested that correct information might have allowed her to file for bankruptcy or submit a new loan-modification application. But those facts were not included in the second amended complaint, and Cooper did not allege that she could or would have taken a different action effectively. The court declined to allow another amendment because Cooper had already received several opportunities to amend.

Business-practices claim

Cooper’s third cause of action arose under California Business and Professions Code § 17200. The parties agreed that this claim depended on her first two claims. Because the court found that the first two claims did not state a claim for relief, it also found that the § 17200 claim failed.

Disposition

Judge Edward M. Chen granted Wells Fargo’s motion to dismiss. The court stated that the dismissal was with prejudice, ordered the clerk to enter final judgment, and directed that the file be closed. The order disposed of Docket No. 35.