Greeson v. Quicken Loans Inc.
- Vince Chhabria
- 3:22-cv-04877
- U.S. District Court · Northern District of California
- 2
In Greeson v. Quicken Loans Inc., Judge Chhabria denied the plaintiffs’ request for a temporary restraining order.
The plaintiffs seeking emergency relief and the defendants opposing the temporary restraining order were directly affected. The order concerned alleged periodic-statement obligations related to the plaintiffs’ loan and a threatened foreclosure.
What happened
In Greeson v. Quicken Loans Inc., the plaintiffs asked the court to temporarily stop the defendants from proceeding with foreclosure. Their claims were based on an alleged failure to provide required periodic loan statements after bankruptcy.
The court said the plaintiffs had not shown a likely chance of winning their claims. It was unclear whether the defendants had to send statements after a 2016 rule change, but the court said the requested order did not address the harm the plaintiffs described. The defendants had sent loan information as early as 2018 and offered a loan modification, while the plaintiffs were facing foreclosure because they had not made payments since 2008.
Judge Vince Chhabria denied the application for a temporary restraining order. The order did not finally decide whether the defendants violated the periodic-statement rule.
The detailed version
- Greeson v. Quicken Loans Inc. · No. 3:22-cv-04877
- Vince Chhabria
- Sept. 7, 2022
Background
The plaintiffs applied for a temporary restraining order, an emergency order intended to provide short-term relief while a case continues. They alleged that the defendants violated 12 C.F.R. § 1026.41 by failing to provide periodic statements concerning the loan. The defendants argued that periodic statements were not required after the plaintiffs filed for bankruptcy and their bankruptcy was discharged, citing 12 C.F.R. § 1026.41(e)(5)(i)(A).
Court’s Analysis
The court explained that the Consumer Financial Protection Bureau initially stated in 2013 that periodic statements were not required for mortgage debts discharged in bankruptcy. In 2016, however, the Bureau revised the rule to narrow the circumstances in which a servicer is exempt from the periodic-statement requirement. Under the revised rule, the borrower must also meet one of the criteria listed in § 1026.41(e)(5)(i)(B).
The court said the record did not make clear whether the defendants were required to send periodic statements after the 2016 revision. Even assuming they were required to do so, the court concluded that the requested injunction did not address the harm alleged by the plaintiffs. The defendants had sent the plaintiffs loan information as early as 2018 and offered a loan modification agreement that could have allowed them to avoid foreclosure. The plaintiffs did not challenge the legal adequacy of that agreement in their application. The court stated that the plaintiffs were facing foreclosure because they had not made payments on the home since 2008, not because the defendants failed to send required periodic statements.
The court also stated that, to the extent a cited decision treated the periodic-statement provisions as categorically inapplicable once a borrower entered bankruptcy, that blanket statement appeared to be incorrect under the 2016 rule.
Ruling
Judge Vince Chhabria denied the application for a temporary restraining order because the plaintiffs had not shown a likelihood of success on the merits. The order did not finally resolve the plaintiffs’ claims or decide whether the defendants violated the periodic-statement requirement.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.