Jackson v PHH Mortgage, S.D. Tex., Snr Judge Hoyt

Jackson v. PHH Mortgage Corporation (4:20-cv-02498)

District Court, S.D. Texas

JULY 15, 2020 | REPUBLISHED BY LIT: APR 19, 2021

PLAINTIFFS’ ORIGINAL VERIFIED PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY INJUNCTION

TO THE HONORABLE JUDGE OF SAID COURT:

NOW COME JAMIE T. JACKSON and MARY M. JACKSON, husband and wife, hereinafter called Plaintiffs, complaining of and about PHH Mortgage Corporation; U.S. Bank National Association, as Trustee, Successor in Interest to Bank of America, National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee, for Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2007-RP4; and Power Default Services, Inc., and their successors and/or assign, as Defendants, and for their claims and causes of action set forth herein below, respectfully show unto the Court the following:

I.

DISCOVERY CONTROL PLAN LEVEL

Plaintiffs intend that discovery be conducted under Discovery Level

II.

PARTIES AND SERVICE

Plaintiff, Jamie Jackson (“Mr. Jackson”), is an individual whose present address is 21807 Blossom Grove Lane, Spring, Texas 77379-5111. The last three digits of his driver’s license number  are XXX, and the last three digits of  his social  security  number are XXX.

Plaintiff, Mary Jackson (“Mrs. Jackson”), is an individual whose present address is 21807 Blossom Grove Lane, Spring, Texas 77379-5111. The last three digits of her driver’s license number are XXX, and the last three digits of her social  security  number are XXX.

Defendant PHH Mortgage Corporation (“PHH”), is a foreign limited liability company doing business in the State of Texas and purports to be the current loan servicer of Plaintiffs’ home mortgage loan made the subject of this suit, and may be served with process by serving its registered agent, Corporation Service Company (CSC), 211 East 7th Street, Suite 620, Austin, Texas Service of process upon said Defendant as described above can be effectuated by personal delivery to its registered agent identified herein.

Defendant U.S. Bank National Association, as Trustee, Successor in Interest to Bank of America, National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee, for Residential Asset Mortgage Products, , Mortgage Asset­ Backed Pass-Through Certificates, Series 2007-RP4 (“U.S. Bank”), is a national banking association doing business in the State of Texas as a mortgage lender and purports to be the current mortgagee of Plaintiffs home mortgage loan made the subject of this suit, and may be served with process by serving its registered agent, CT Corporation Systems, Inc., 1999 Bryan Street, Suite 900, Dallas, Texas 75201. Service of process upon said Defendant as described above can be effectuated by personal delivery to its registered agent identified herein.

Defendant Power Default Services, (“Power Default”), is a foreign corporation doing business in the State of Texas as a foreclosure trustee company, and has posted Plaintiffs homestead property made the subject of this suit for foreclosure sale, and may be served with process by serving its registered agent, Corporation Service Company (CSC), 211 East 7th Street, Suite 620, Austin, Texas 78701. Service of process upon said Defendant as described above can be effectuated by personal delivery to its registered agent identified herein.

III.

JURISDICTION AND VENUE

The subject matter in controversy is within the jurisdictional limits of this court.

Plaintiffs seek:

monetary relief of less than $100,000, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney’s fees; and,

injunctive relief in the form of a temporary restraining order and temporary injunction.

This court has personal jurisdiction herein because each of the defendants are Texas residents and/or routinely engage in or transact business with sufficient minimum contacts in the State of Texas.

Venue is proper in Harris County, Texas in this cause pursuant to CIV. PRAC. & REM. CODE § 15.011 et seq., and because this action involves real property situated entirely in Harris County, Texas, and because all of the acts, events and/or occurrences that form the basis of this lawsuit occurred, or were obligated to occur in Harris County, Texas.

IV.

FACTUAL ALLEGATIONS

2006

On July 26, 2006, Plaintiffs purchased the real property and improvements commonly known as 21807 Blossom Grove Lane, Spring, Texas 77379-5111, and legally described, to wit:

LOT NINE (9), IN BLOCK THREE (3), SPRING TERRACE, SEC. TWO, AN ADDITION IN HARRIS COUNTY, TEXAS ACCORDING TO THE MAP OR PLAT THEREOF RECORDED UNDER FILM CODE 570228 OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS (“Property”);

which is the Plaintiffs’ homestead. At all relevant and material times hereto, Plaintiffs were and are the fee simple owners of the subiect Property. (emphasis added). A true and correct copy of the General Warranty Deed With Vendor’s Lien recorded as Instrument No. 2531560 of the official real property records of the Harris County Clerk’s office is attached hereto marked Exhibit “A” and incorporated herein by reference for all purposes.

On that same date, July 26, 2006, Mr. Jackson also applied for and obtained a mortgage loan and executed a Promissory Note (“Note”) in the original principal amount of $134,569.00, payable to Option One Mortgage Corporation (“Original Lender”), and which note was secured by a Deed of Trust (“Deed of Trust”) of even date to Thomas F. Vetters, Trustee. A true and correct copy of the Deed of Trust recorded as Instrument No. 2531561 of the official real property records of the Harris County Clerk’s office is attached hereto marked Exhibit “B” and incorporated herein by reference for all purposes. The Note and Deed of Trust are hereinafter collectively referred to as the “Plaintiffs’ Loan”.

Initially, Plaintiffs began making their monthly payments under Plaintiffs’ Loan to the original lender, Option One.

For the first few years, things went very smoothly for the Plaintiffs, but then a series of personal and financial hardships befell the Plaintiffs over the course of the next several years, and along with the 2008 global financial crisis and the fact that Jackson is self­ employed, and the constant unwillingness of any of the defendants or their predecessors-in­ interest to provide any mortgage relief or loss mitigation assistance, led to the present situation with the mortgage loan.

2008

First, in 2008, one of Plaintiffs’ daughters was the victim of a brutal sexual assault, which forced Plaintiffs to miss work in order to care for her physical and emotional needs, which lead to an initial default under the mortgage loan.

Shortly after the sexual assault, the 2008 global financial crisis came along and that caused additional financial stress on the Plaintiffs and their family.

Thereafter, the loan was service transferred from the original lender to Litton Loan Servicing, LP (“Litton”). Starting in late 2008, Plaintiffs reached out to Litton and sought help with their mortgage loan in the form of mortgage relief or loss mitigation Plaintiffs made numerous inquiries and completed and submitted numerous loss mitigation applications, but Litton failed to ever provide any assistance or relief of any kind.

2010

In 2010, Mr. Jackson suffered a heart attack which caused even more financial and personal stress to him and the family as he was disabled and unable to work for a period of over two years.

Once again Plaintiffs reached out to Litton and requested mortgage relief assistance and a loan modification, and submitted several applications and supporting documents, only to be repeatedly told that the documents were missing or insufficient, and that new documents were needed, and were then caught in this ridiculous cycle for months on end and not once did Litton ever offer any actual help or assistance of any kind.

Subsequently, in early 2013, after Mr. Jackson was finally able to return to work, yet additional tragedies struck the Mrs. Jackson became seriously ill and was ultimately declared medically disabled after enduring several months of pain and suffering due to her illness. In addition, another one of their children was also stricken with a serious illness and had to be hospitalized. All of these additional expenses and financial burdens forced Plaintiffs into financial dire straits.

2013

During that same time period, early 2013, the servicing of Plaintiffs’ Loan was transferred to Ocwen Loan Servicing, LLC (“Ocwen”), which upon information and belief is owned by the exact same parent company as Defendant PHH.

Plaintiffs then contacted Ocwen and once again started the process to request mortgage relief assistance and a loan modification to resolve the mortgage Plaintiffs then submitted numerous additional applications for mortgage relief assistance and a loan modification, and once again their requests fell on dear ears as Ocwen refused to provide them with any assistance of any kind, and instead posted their home for foreclosure.

As a result of their home being posted for foreclosure, Jackson filed a Chapter 7 bankruptcy under Case No. 16-33292, and was awarded a discharge under the case by Order dated October 13, 2013. A true and correct copy of Mr. Jackson’s 2013 Chapter 7 bankruptcy case docket report is attached hereto marked Exhibit “C” and incorporated herein by reference for all purposes.

Thereafter, Plaintiffs once again contacted Ocwen and once again sought help and assistance concerning the Plaintiffs’ Loan in the form of loss mitigation and loan modification, and once again no help of any kind was offered.

At that point, Ocwen continued to add unexplained fee after fee and charge after charge to the loan balance such that it was becoming exceedingly difficult for the Plaintiffs’ to be able to resume making affordable monthly payments.

Plaintiffs were also very disenfranchised by receiving written letters from Ocwen offering to help, and then doing everything asked of them to seek the help and providing every document requested, only to be told that the documents are missing, or the documents are insufficient, or are stale dated and need to be updated.

This process also took a serious toll on the health and welfare of the Jackson family, who were attempting in earnest to bring about a resolution.

2016

Predictably, in July 2016, after having been denied any loss mitigation or loan modification options, Ocwen once again re-posted the Plaintiffs’ homestead property for foreclosure sale, and once again Mr. Jackson took action to protect his and his family’s home by filing a Chapter 13 bankruptcy under Case No. 16-33292.

A true and correct copy of Mr. Jackson’s 2016 Chapter 13 Bankruptcy Case Docket Report is attached hereto marked Exhibit “D” an1d incorporated herein by reference for all purposes.

Jackson then obtained confirmation of his Chapter 13 plan on November 22, 2016, and thereafter began making plan payments to the trustee. According to the records of the Chapter 13 bankruptcy trustee, Mr. Jackson paid a total of $17,485.00 in chapter 13 payments under his plan, and that at least $12,994.81 was paid to Ocwen toward the principal balance owed under Plaintiffs’ Loan.

A true and correct copy of the Chapter 13 Standing Trustee’s Final Report and Account to evidence the same is attached hereto marked Exhibit “E”  and incorporated herein by reference for all purposes.

2017

Unfortunately, Mr. Jackson’s bankruptcy case was then dismissed on November 9, 2017, for failure to modify his plan.

2018

In May 2018, Defendant U.S. Bank attempted to complete yet another foreclosure sale of the Plaintiffs’ homestead property and actually purported to sell the property at auction on May 1, 2018; however, in order to protect her and her family’s rights and interests in their home, Jackson filed a prose Chapter 13 bankruptcy under Case No. 18-32164 on April 27, 2018, and provided notice of the filing to Defendant U.S. Bank, through Ocwen, and was unaware that Defendant U.S. Bank and Ocwen had actually completed a foreclosure sale on May 1, 2018.

Subsequently, Plaintiffs we forced to pay an attorney to demand that Defendant U.S. Bank and its servicer, Ocwen, rescind its/their illegal foreclosure sale and restore Plaintiffs with fee simple title to their property. On June 14, 2018, the Substitute Trustee who conducted the foreclosure sale, executed and recorded a Rescission of Foreclosure Sale Deed wherein Plaintiffs were restored with title and ownership of their homestead property. A true and correct copy of the Rescission of Foreclosure Sale Deed is attached hereto marked Exhibit F” and incorporated herein by reference for all purposes.

Thereafter, the servicing of Plaintiffs’ Loan was transferred to Defendant PHH.

2019

In early 2019, Plaintiffs made yet another good faith effort to reach out to Defendant PHH and seek mortgage relief assistance of any kind, including applying for a loan modification.

On or about June 2019, Plaintiffs had submitted their FIRST COMPLETE loan modification application to Defendant PHH, which acknowledged to Plaintiffs that their application was complete.

On or about September 2019, Defendant PHH informed Plaintiff that their loan modification had been denied but failed to provide any details as to why, nor were Plaintiffs notified of any right to appeal the denial.

Plaintiffs made numerous phone calls to Defendant PHH and were put on hold for long periods of time and then transferred from one employee to the next and no one could provide any explanation, assistance or help concerning the loan modification. It seemed to Plaintiffs that no one seemed cared about resolving the Plaintiffs’ Loan delinquency but them.

After all, they had paid $12,994.81 in principal payments under Mr. Jackson’s Chapter 13 bankruptcy plan and had not received any documentation from either Ocwen or Defendant PHH which gave them any credit for those payments, so they did not understand the unexplained reason for the denial of their loan modification, and had no idea that they could actually appeal the denial, when it was clear that they had been trying so hard.

2020

On or about April 23, 2020, Defendants PHH and/or S. Bank, through Defendant Power Default, provided Plaintiff with written notice of the acceleration of Plaintiffs’ Loan and that their homestead property had been posted for foreclosure sale on June 2, 2020. A true and correct copy of the Notice of [Substitute] Trustee’s Sale is attached hereto marked Exhibit “G” and incorporated herein by reference for all purposes.

At no point since Plaintiffs paid over $12,994.81 in principal loan payments under Jackson’s Chapter 13 bankruptcy plan as described herein have any of the Defendants or their predecessor(s)-in-interest provided Plaintiffs with any written notice of default and opportunity to cure notice, nor informed Plaintiffs of the exact amount required to cure the default, nor the 20-day time period in which to cure the default as expressly required under paragraph 21 of the Deed of Trust and/or TEX. PROP. CODE §51.002 et seq., nor have Plaintiffs been provided with any written notice which accounts for any credit for the payments made under the Chapter 13 plan as described herein.

V.

FIRST CAUSE OF  ACTION  – APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY INJUNCTION

Plaintiffs hereby incorporate by reference and reallege all material allegations of fact set forth in Section IV above as if fully set forth herein.

Pursuant to Rule 680 of the Texas Rules of Civil Procedure, Plaintiffs hereby seek immediate relief in the form of a Temporary Restraining Order wherein this Court orders, retrains and prohibits the Defendants, and/or any of its/their agents, employees, attorneys, trustees, substitute trustees, successors and/or assigns, from foreclosing upon Plaintiffs’ homestead property for a period of at least fourteen (14) days until a temporary injunction hearing is held by this Court concerning whether Plaintiffs have a probable right of recovery for their various claims and causes of action pleaded herein.

There presently exists an imminent threat of irreparable harm to Plaintiffs in the form of the Defendants’ and/or its/their agents, employees, attorneys, trustees, substitute trustees, successors and/or assigns stated intent to complete a foreclosure sale and divest Plaintiffs of their fee simple title and ownership interest in and to their homestead property unless this Court immediately restrains such acts or conduct as requested herein.

Moreover, after issuance of a temporary restraining order, and upon notice and a hearing as required by law, Plaintiffs further seek entry of a Temporary Injunction to maintain the status quo and prohibit the Defendants, and/or any of its/their agents, employees, attorneys, trustees, substitute trustees, successor and/or assigns from foreclosing or attempting to foreclose on Plaintiffs’ homestead property until the merits of Plaintiffs’ various claims and causes of action as pleaded herein can be fairly and fully adjudicated.

VI.

SECOND CAUSE OF ACTION – BREACH OF CONTRACT AND FAILURE OF CONDITION PRECEDENT

Plaintiffs hereby incorporate by reference and reallege all material allegations of fact set forth in Section IV and V above as if fully set forth herein.

The acts, conduct or omissions of the Defendants PHH, S. Bank and/or Power Default as described herein, supra, also constitute a material breach of the Deed of Trust contract, which material breach also constitutes a failure of condition precedent as to its/their attempted acceleration of Plaintiffs’ Loan and posting of Plaintiffs’ homestead property for foreclosure sale, and which material breach is the proximate cause of the actual damages sustained and incurred by Plaintiffs in excess of the minimum jurisdictional limits of this Court.

Specifically, since Plaintiffs made several payments in Mr. Jackson’s Chapter 13 bankruptcy case, the Defendants were required to provide Plaintiffs with a Notice of Default and Opportunity to Cure notice as expressly required under paragraph 21 of the Deed of Trust (see Exhibit “B”) and TEX. CODE §51.002(d), and to Plaintiffs with at least 20 days to cure the default before accelerating the Plaintiffs’ Loan and posting their property for foreclosure sale, and such failure to provide said notice constitutes a material breach of the Deed of Trust contract and a failure of condition precedent that must occur before the power of sale provision in the Deed of Trust can be exercised, and is a producing cause of the actual damages sustained and incurred by Plaintiffs in excess of the minimum jurisdictional limits of this court.

VII.

THIRD CAUSE OF ACTION – VIOLATIONS OF RESPA AND REGULATION X

 Plaintiffs hereby incorporate by reference and reallege all material allegations of fact set forth in Sections IV, V and VI above as if fully set forth herein.

Pursuant the Real Estate Settlement Procedures  Act  (RESPA),  12  S.C. 2605(±), Plaintiffs have a private right of action providing for remedies for the claimed breaches of RESPA, including actual damages, costs, statutory damages and attorney’s fees.

Plaintiffs’ mortgage loan is a “federally related mortgage loan” as that term is defined by 12 C.F.R. §1026.4l(e)(4), and Defendants PHH and U.S. Bank are subject to these regulations and do not qualify for the exception for a “small servicer” or “qualified lender” as defined in 12 F.R. §617.700.

Specifically, the acts, conduct and/or omissions of Defendants PHH and/or U.S. Bank as alleged herein, supra, which at all material times hereto was/were acting in its/their alleged capacities as “mortgage servicer” and “mortgagee” of Plaintiffs’ Loan constitute violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §2605(±) and (g), because Defendants PHH and U.S. Bank failed to adequately respond to Plaintiffs’ COMPLETE loan modification, or to provide Plaintiffs with any notice of their right to appeal the denial, and instead proceeded to dual track the Plaintiffs and post their homestead property for foreclosure sale, all of which acts, conduct or omissions constitute violations of Regulation X, 12 F.R. 1024.41 et seq., and those statutory violations are a producing cause of the actual damages sustained and incurred by Plaintiffs in excess of the minimum jurisdictional limits of this Court.

VIII.

FOURTH CAUSE OF ACTION – VIOLATIONS OF THE TEXAS DEBT COLLECTION ACT (TDCA)

Plaintiffs hereby incorporate by reference and reallege all material allegations of fact set forth in Sections IV, V, VI and VII above as if fully set forth herein.

The acts, conduct and/or om1ss10ns of Defendants PHH as described herein, supra, which at all material times was acting in its capacity as “mortgage servicer” of Plaintiffs’ Loan on behalf of Defendant U.S. Bank, and which acquired the servicing at a time when the subject loan was in default, of failing to provide Plaintiffs with any written notice of default and opportunity to cure notice after Plaintiffs’ had paid sizeable amounts toward the loan balance while in bankruptcy, which clearly changed the actual amount due and owing to cure the default, and of failing to provide Plaintiffs with any credit for those sizeable payments, and instead proceeding to accelerate the Plaintiffs’ Loan and file post their homestead property for foreclosure sale each constitute violations of the Texas Debt Collection Act, FIN. CODE § 392.001 et seq. (“TDCA”), because all of those acts, conduct or omissions constitute the intentional and/or knowing misrepresentation of the character, amount or extent of the debt to be collected, and which false representations of material fact Plaintiffs relied upon to their detriment, and are a producing cause of the actual damages sustained  and incurred by Plaintiffs in excess of the minimum jurisdictional limits of this Court.

Defendant PHH’s acts, conduct or om1ss10ns as described herein constitute violations of the following prov1s10ns of the TDCA: 392.30l(a)(8)-misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting the consumer’s debt status in a judicial or governmental proceeding; and§ 392.30l(a)(I4)-representing falsely the status or nature of the services rendered by the debt collector or the debt collector’s business; and § 392.304(a)(l9) – using any other false representation or deceptive means to collect a debt or obtain information concerning a consumer, all of which violations are a producing cause of the actual damages sustained and incurred by Plaintiffs in excess of the minimum jurisdictional limits of this Court. (emphasis added).

As each of the acts, conduct and/or omissions of Defendant PHH that constitute violations of TDCA and were committed intentionally, knowingly and/or with malice, or a conscious indifference as to the rights of Plaintiffs, Plaintiffs are entitled to and hereby seek an award of exemplary damages in excess of the minimum jurisdictional limits of this Court.

IX.

ATTORNEY’S FEES

Request is made for all costs and reasonable and necessary attorney’s fees incurred by or on behalf of Plaintiffs herein, including all fees necessary in the event of an appeal of this cause to the Court of Appeals and the Supreme Court of Texas, as the Court deems equitable and just, as provided by: (a) RESPA, 12 U.S.C. 2605(±), (b) the Texas Debt Collection Act, TEX. FIN. CODE§ 392.001 et seq.; and (c) common law.

X.

JURY DEMAND

Plaintiffs hereby requests that all issues of fact be tried before a jury.

XI.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs, JAMIE T. JACKSON and MARY M. JACKSON, respectfully pray that all of the Defendants be cited to appear and answer herein, and that Plaintiffs be granted immediate relief in the form of a temporary restraining order and temporary injunction preventing the Defendants, and/or any of its/their respective agents, employees, attorneys, trustees, substitute trustees, successors and/or assigns from foreclosing upon Plaintiffs’ homestead property described herein until the merits of their various claims and causes of action pleaded herein may be fairly adjudicated; and that upon the final trial of this cause, judgment be entered in favor of Plaintiffs, and against Defendants PHH, U.S. Bank and/or Power Default, jointly and/or severally, for breach of contract and failure of condition precedent, and that judgment be entered in favor of Plaintiffs and against Defendant PHH for violations ofRESPA and Regulation X, and for violations of the Texas Debt Collection Act; and for an award of all economic and actual damages requested herein in an amount in excess of the minimum jurisdictional limits of the Court, including exemplary damages as prayed for herein, together with pre-judgment and post-judgment interest at the maximum rate allowed by law, and for an award of all attorney’s fees and costs of court incurred, and for such other and further relief, whether at law or in equity, to which Plaintiffs may be justly entitled.

Respectfully submitted,

GANNON HELSTOWSKI LAW FIRM

Isl John G. Helstowski                                                                         

John G. Helstowski
Texas State Bar No. 24078653 13601
Preston Road, Suite E920
Dallas, Texas 75240
Telephone: (817) 382-3125
Facsimile: (817) 382-1799
Email: jgh @  jghfirm.com
Attorney for Plaintiffs Jamie T. Jackson and Mary M. Jackson