French v. Selene Finance LP

Background

Somer French applied to proceed without paying filing fees. The court had previously ordered her to file an amended complaint addressing problems in her original complaint. After French filed the amended complaint, the court reviewed both it and her fee-waiver application under 28 U.S.C. § 1915(e).

French alleged that she originated a mortgage with Wells Fargo Bank in May 2010. She alleged that the mortgage was sold three times and was most recently sold to Selene Finance LP on September 12, 2022. She received correspondence stating that a foreclosure would occur on her home. French disputed the debt, received a copy of the mortgage note, and sent Selene Finance and its law firm a notice directing them to stop communications. She alleged that the foreclosure sale nevertheless proceeded on June 15, 2023.

French also alleged that Wells Fargo had failed to provide accurate disclosures about the amount financed, finance charge, annual percentage rate, and right to cancel the mortgage transaction. She sought to void the loan, reverse the foreclosure and sale, obtain the property’s title and deed, delete negative credit reports, and recover damages.

Court’s Analysis

The court first noted that Wells Fargo was not named as a defendant. It found that none of the alleged facts showed that Selene Finance was responsible for Wells Fargo’s alleged disclosure violations.

The court separately concluded that the amended complaint did not state a plausible claim under the Truth in Lending Act. French’s mortgage transaction occurred in May 2010, while she disputed the debt in 2023. The court stated that, when required disclosures are never provided, the right to cancel generally expires three years after the transaction is completed. The court also stated that French had not alleged facts showing that the right-to-cancel provisions applied to her mortgage and that her allegations about the finance charges were conclusory. Therefore, even assuming the alleged disclosure failures occurred, the court found the claim untimely and subject to dismissal.

As to the Fair Debt Collection Practices Act claim, the court explained that the provision cited by French generally limits a debt collector’s direct communications after a consumer sends a notice to stop communications, subject to exceptions. The court found that French had not alleged sufficient facts explaining how Selene Finance violated that provision merely by proceeding with the foreclosure sale after receiving her notice.

Disposition

Judge Wilhelmina M. Wright ordered that French’s amended complaint be DISMISSED WITHOUT PREJUDICE under 28 U.S.C. § 1915(e)(2)(B). The court also ordered that French’s application to proceed without paying filing fees be DENIED AS MOOT. The order did not decide whether Wells Fargo actually violated the disclosure requirements or whether Selene Finance was liable for those alleged violations.