Closing the HAMPer? Maryland court holds HAMP does not preclude state law claims. But Plaintiffs lose anyway.

Kara Boyle co-authored this post with Bob Gaumont.

A mixed opinion for attorneys wishing to bring or defend claims based on the Home Affordable Modification Program ("HAMP"). 

In her January 8, 2013 opinion, the Honorable Catherine C. Blake of the U.S. District Court for the District of Maryland (the “Court”) dismissed plaintiffs Robert Goss and Shirley Goss’s (“Plaintiffs” or the “Gosses”) complaint against Bank of America, N.A. (“Defendant” or “Bank of America”).  Despite the Court’s recent dismissal of complaints presenting substantially similar claims under HAMP by the same attorney, Judge Blake issued an opinion that may provide an important distinction and fair warning to mortgage servicers.
  
In the previous two cases, Matthews v. Wells Fargo Bank, N.A., No. MJG-12-1204, 2012 U.S. Dist. LEXIS 126646 (D. Md. Sept. 5, 2012) and Spaulding v. Wells Fargo Bank, N.A., No. GLR-11-2733, 2012 U.S. Dist. LEXIS 101776, (D. Md. July 23, 2012), the Court stated that it had “made it clear that absent a [Trial Period Plan (“TPP”)] Agreement [between Plaintiff and Defendant], a suit that seeks the general enforcement of the HAMP guidelines must be dismissed.”  Spaulding, 2012 U.S. Dist. LEXIS 101776 at *10 (granting defendant’s motion to dismiss where plaintiffs’ claims were based on defendant’s denial of their HAMP application and plaintiffs did not allege that a TPP was in place or even offered); see Matthews, U.S. Dist. LEXIS 126646 (granting defendant’s motion to dismiss and adopting, mutatis mutandis, Judge Russell’s decision in Spaulding); Ramos v. Bank of Am., N.A., No. DKC-11-3022, 2012 U.S. Dist. LEXIS 77123, 2012 WL 1999867, at *3 (D. Md. June 4, 2012); Coulibaly v. J.P. Morgan Chase Bank, N.A., No. DKC 10-3517, 2011 U.S. Dist. LEXIS 87495, 2011 WL 3476994 at *15 (D. Md. Aug. 8, 2011); Allen v. CitiMortgage, Inc., No. CCB-10-2740, 2011 U.S. Dist. LEXIS 86077, 2011 WL 3425665, at *4 (D. Md. Aug. 4, 2011); see also Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 558-59 (7th Cir. 2012).  The Court explained that in these cases, the plaintiffs’ claims were allowed to proceed on the basis of a previously established TPP agreement.  Spaulding, 2012 U.S. Dist. LEXIS 101776 at *10.

In the Goss opinion, Plaintiffs had not entered into a TPP agreement with Defendant.  Nevertheless, Judge Blake explained that despite a plaintiff’s inability to “enforce HAMP guidelines on behalf of the federal government or as a third-party beneficiary of the HAMP participation agreement between the federal government and the mortgage servicer[,] . . . the absence of a private right of action from a federal statute provides no reason to dismiss a claim under a state law just because it refers to or incorporates some element of the federal law.”  (Op. at 4-5.)  Thus, Plaintiffs were not precluded from pursuing their state law claims, and Judge Blake proceeded to evaluate their six counts against Defendant.   (That said, Plaintiffs lost anyway.)

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