A federal judge had
Judge Edmund Sargus Jr. in the Southern District of Ohio's Eastern division ruled in favor of the plaintiffs regarding the company's liability for claims related to the Real Estate Settlement Procedures Act and breach of contract in the case, O'Keeffe v. Cenlar.
The RESPA claim centers on a requirement that a mortgage must be 120 days delinquent before a servicer makes an initial filing or notice. Cenlar, which was subservicing the loan, said it does not comment on pending litigation and will defend itself in the case.
"The loan modification is valid and enforceable, so the loan was not in default," the judge said in an order and opinion on the matter.
Sargus also partially denied a motion for summary judgment on a notice of error claim and damages on the breach of contract claim.
"The O'Keeffes move for summary judgment only as to liability for their RESPA claims, but as to liability and damages for their breach of contract claims," the judge noted.
"Defendants do not respond to the O'Keeffes' damages arguments in their opposing brief and plaintiffs do not revisit in their reply," he continued. "Although the court has decided liability for the breach of contract claim, it will not decide the damages issue on such scant briefing."
The case centers on a dispute plaintiffs say arose after one of them asked for a correction on a name spelling in a modification agreement, which was reportedly recorded without an adjustment to billing.
Plaintiffs allege they then received a new, corrected mod that the servicer said it revised because the earlier one was not as intended. They refused to sign the new modification because they found a $90,000 difference in it unacceptable.
During the dispute, plaintiffs said they sent out both a request for information and an NOE, with the latter advising the company of their concerns.
The RFI requested "call logs, recordings, service notes and records of communications between Cenlar and plaintiffs" in addition to "all documents from January 2021 to the present" related to the issues at hand.
Sargus previously dismissed allegations related to Cenlar's "allegedly inadequate RFI response," noting that "plaintiffs' sole damages" costs related to "preparing and transmitting" a qualified written request but allowed claims related to the NOE to move forward.
Sargus had said that NOE responses are supposed to include either a correction or "a reasonable investigation" that ends with the "written notification that includes a statement that the servicer has determined that no error occurred," reasons for that determination and how borrowers can obtain supporting documentation.
So "the mere fact that Cenlar would have concluded that no enforceable loan modification existed after conducting a reasonable investigation does not absolve them of the responsibility of conducting a reasonable investigation and explaining their belief," he said.
The case is part of the broader body of law and regulatory actions that servicers and attorneys have been reviewing to update compliance
