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SUTCLIFFE

SUTCLIFFE

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Published by Foreclosure Fraud
4closureFraud.org
4closureFraud.org

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Categories:Types, Research, Law
Published by: Foreclosure Fraud on May 12, 2012
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08/14/2013

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The parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to28 U.S.C. § 636(c).UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIAVICKI AND RICHARD SUTCLIFFE,Plaintiffs,v.WELLS FARGO BANK, N.A., ET AL.,Defendants.___________________________________/ Case No. C-11-06595 JCS
ORDER GRANTING IN PART ANDDENYING IN PART DEFENDANTWELLS FARGO BANK, N.A.’S MOTIONTO DISMISS PLAINTIFFS’ CLASSACTION COMPLAINT [Docket No. 30]I.INTRODUCTION
Plaintiffs bring a purported class action on behalf of themselves and others who are similarlysituated alleging that Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) offers “illusory trial loanmodification programs” to borrowers facing foreclosure without any intention of offering theseindividuals permanent loan modifications. Presently before the Court is Defendant Wells FargoBank, N.A.’s Motion to Dismiss Plaintiffs’ Class Action Complaint (“the Motion”), in which WellsFargo seeks dismissal of all of Plaintiffs’ claims under Rule 12(b)(6), 12(b)(1) and 9(b) of theFederal Rules of Civil Procedure. A hearing on the Motion was held on Friday, April 27, 2012 at9:30 a.m. For the reasons stated below, the Motion is GRANTED in part and DENIED in part.
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II.BACKGROUNDA.The Complaint
Plaintiffs Vicki and Richard Sutcliffe are a married couple residing in Kansas City, Missouri.Complaint ¶ 9. They are borrowers under a note evidencing a loan (“the Sutcliffe Loan”) relating toa home in Kansas City.
 Id 
. Defendant Wells Fargo Bank, N.A., is a national banking associationwith its principal place of business in San Francisco, California.
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. ¶ 10.
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Plaintiffs do not object to Wells Fargo’s request for judicial notice, which is GRANTED.2The Sutcliffe Loan was taken out in July 2006.
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. ¶ 25. The amount financed to purchasethe property was $140,000.00.
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. ¶ 25. The Sutcliffe’s monthly payment was approximately$1,180.00 per month.
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.In 2009, Richard Sutcliffe’s pay and hours were reduced, while Vicki Sutcliffe’s medicalexpenses increased because her employer no longer paid all of her health insurance coverage.
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. ¶26. As a result, the Sutcliffes could not afford the monthly payments on their loan and requested aloan modification from Wells Fargo.
 Id 
. In December 2009, Wells Fargo sent the Sutcliffes adocument entitled “Home Affordable Modification Program Trial Period” (the “TPP”).
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. ¶ 27.The TPP set forth the terms pursuant to which the Sutcliffes would qualify for a LoanModification Agreement that would permanently modify the terms of their loan.
 Id 
. The first twoparagraphs of the TPP state as follows:If I am in compliance with this Loan Trial Period and my representations in Section 1continue to be true in all material respects, then the Lender will provide me with a LoanModification Agreement, as set forth in Section 3, that would amend and supplement (1) theMortgage on the Property, and (2) the Note secured by the Mortgage. . . .If I have not already done so, I am providing confirmation of the reasons I cannot afford mymortgage payment and documents to permit verification of all of my income . . . to determinewhether I qualify for the offer described in this Plan. I understand that after I sign and returntwo copies of this Plan to the Lender, the Lender will send me a signed copy of this Plan if Iqualify for the Offer or will send me written notice that I do not qualify for the Offer. ThisPlan will not take effect unless and until both I and the Lender sign it and Lender providesme with a copy of this Plan with the Lender’s signature.Defendant Wells Fargo Bank, N.A.’s Request for Judicial Notice (“RJN”), Ex. 1.
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 Section 1 of the TPP, entitled “My Representations,” required the Sutcliffes to certify thefollowing representations:A.I am unable to afford my mortgage payments for the reasons indicated in myHardship Affidavit and as a result, (i) I am either in default or believe I will be indefault under the Loan Documents in the near future, and (ii) I do not have sufficientincome or access to sufficient liquid assets to make the monthly mortgage paymentsnow or in the near future;B.I live in the Property as my principal residence, and the Property has not beencondemned;
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3C.There has be no change in the ownership of the Property since I signed the LoanDocuments;D.I am providing or already have provided documentation for all income that I receive(except that I understand that I am not required to disclose any child support oralimony that I receive, unless I wish to have such income considered to qualify forthe Offer);E.Under penalty of perjury, all documents and information I have provided to Lenderpursuant to this Plan, including the documents and information regarding myeligibility for the program, are true and correct; andF.If Lender requires me to obtain credit counseling, I will do so.G.If I have been discharged in a Chapter 7 bankruptcy proceeding subsequent to theexecution of the Loan Documents. Based on this representation, Lender agrees that Iwill not have personal liability on the debt pursuant to this Plan. I understand andagree that the Lender will not be obligated or bound to make any modification of theLoan Documents or to execute the Modification Agreement if the Lender has notreceived an acceptable title endorsement and/or subordination agreements from otherlien holders, as necessary, to ensure that the modified mortgage Loan retains its firstlien position and is fully enforceable.RJN, Ex. 1, Section 1; Complaint ¶ 30.Section 2 of the TPP set forth the trial payment schedule and amounts, requiring theSutcliffes to make three payments, on January 1, 2010, February 1, 2010 and March 1, 2010, of $787.71 each. RJN, Ex. 1, Section 2.; Complaint ¶ 28. It also contained the following provision:If prior to the Modification Effective Date, (i) the Lender does not provide me a fullyexecuted copy of this Plan and the Modification Agreement; (ii) I have not made the TrialPeriod payments required under Section 2 of this Plan; or (iii) the Lender determines that myrepresentations in Section 1 are no longer true and correct, the Loan Documents will not bemodified and this Plan will terminate. In this event, the Lender will have all the rights andremedies provided by the Loan Documents, and any payment I make under this Plan shall beapplied to amounts I owe under the Loan Documents and shall not be refunded to me.RJN, Ex. 1, Section 2F. The TPP states in the next section:I understand that the Plan is not a modification of the Loan Documents and that the LoanDocuments will not be modified unless and until (i) I meet all of the conditions required formodification, (ii) I receive a fully executed copy of a Modification Agreement, and (iii) theModification Effective Date has passed. I further understand and agree that the Lender willnot be obligated or bound to make any modification of the Loan Documents if I fail to meetany one of the requirements under this Plan. . . .RJN, Ex. 1, Section 2G.On December 12, 2009, the Sutcliffes signed the Trial Pan and returned it to Wells Fargo.Complaint ¶ 31. They also submitted the required Hardship Affidavit.
 Id 
.
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