Samson v. Select Portfolio Servicing, Inc.

Background

Marilou Samson brought claims against Select Portfolio Servicing, Inc., and other defendants concerning her loan-modification application and foreclosure-related conduct. Select Portfolio Servicing moved to dismiss.

Claims 1, 2, and 6

The court held that claims 1, 2, and 6 were clearly precluded, meaning barred, by the court’s previous order, identified as Docket No. 41.

Claim 3: California Civil Code sections 2924.11 and 2924.10

The court held that Samson had not adequately pleaded a violation of either provision. Section 2924.11 can, in certain circumstances, restrict a mortgage servicer from recording a notice of default or sale, or conducting a trustee’s sale, when a foreclosure-prevention alternative such as a loan modification has been approved. Samson did not allege that she had executed an approved foreclosure-prevention alternative; her complaint instead indicated that her loan-modification application was not approved.

Samson argued in her opposition that she meant to rely on section 2924.10. That section requires a mortgage servicer to provide written acknowledgment of a loan-modification application within five days after receiving it. The court found that Samson alleged the servicer failed to explain in writing why the application was denied, not that it failed to acknowledge receipt of the application.

Claim 4: California Civil Code section 2923.7

The court held that Samson had not adequately pleaded a violation of section 2923.7. That provision requires a mortgage servicer to establish a “single point of contact” for a borrower requesting a foreclosure-prevention alternative. The contact is responsible for communicating about the application process, coordinating receipt of application documents, and providing timely and accurate information about the application’s status.

Samson alleged that her contact told her to sell her home rather than apply for a loan modification, and that her application would be denied because an earlier application had been denied. She also argued that the contact lacked enough knowledge of her situation to provide assessments of the application. The court found that this conduct did not appear to violate the listed requirements and that Samson had not explained how it did. The court also rejected the allegation that assigning her multiple people violated the statute, because the statute allows a servicer to assign a team of personnel.

Claim 5: California Civil Code section 1788.17 and federal debt-collection law

The court held that Samson had not pleaded a violation of section 1788.17, which requires compliance with certain provisions of the federal Fair Debt Collection Practices Act. The relevant federal provision prohibits debt collectors from threatening action that cannot legally be taken or that they do not intend to take.

Samson alleged that Select Portfolio Servicing told her that her loan had been referred to its legal department to take legal action. She also alleged that the servicer later pursued nonjudicial foreclosure. The court found that she did not plead facts suggesting that Select Portfolio Servicing never intended to take legal action or could not legally take it.

Claim 7 and disposition

The court stated that claim 7, which was based on California’s Unfair Competition Law, depended on Samson’s other claims and therefore was also dismissed. The court granted Select Portfolio Servicing’s motion to dismiss, dismissed the case with prejudice because amendment would be futile, directed entry of judgment for the defendants, and directed the Clerk’s Office to close the case. Judge Vince Chhabria issued the order.