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Hukic v. Aurora Loan Services

August 31, 2007

AVDO HUKIC, PLAINTIFF,
v.
AURORA LOAN SERVICES, INC. AND OCWEN FEDERAL BANK, FSB, DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Avdo Hukic ("Hukic") filed a fifteen-count Amended Complaint against Aurora Loan Services, Inc. ("Aurora") and Ocwen Federal Bank, FSB ("Ocwen" and together with Aurora, "Defendants"). Seven counts were dismissed pursuant to Defendants' Motions to Dismiss. The remaining counts against Defendants seek damages for breach of contract, tortious interference with prospective economic advantage,*fn1 and violations of the Fair Credit Reporting Act ("FCRA") Section 15 U.S.C. § 1681s-2(b)*fn2 . Defendants have moved for summary judgment on all of the remaining counts of Hukic's Amended Complaint. For the reasons stated below, Defendants' Motions for Summary Judgment are granted and Hukic's claims against Aurora and Ocwen are dismissed with prejudice.

STATEMENT OF FACTS

Hukic's Mortgage Loan with Life Savings Bank

Hukic entered into a mortgage loan ("the loan") with Life Savings Bank ("LSB") in September 1997. Pltf. 56.1 Resp. Aurora ¶ 1.*fn3 The note and mortgage concerned property located at 4862 West Cornelia, Chicago, Illinois. Pltf. 56.1 Ocwen ¶ 5; see also Ocwen's Ans. Am. Cplt. ¶¶ 2, 7. The amount of the mortgage loan from LSB was $119,700, with a final maturity date of October 1, 2012. Pltf. 56.1 Resp. Aurora ¶ 2. The interest rate was 10.65%. Id. Under the mortgage loan, Hukic was required to make monthly payments in the amount of $1,334.32. Pltf. 56.1 Resp. Ocwen ¶ 7. Paragraphs two and four of the Mortgage Agreement provided that the borrower, Hukic, shall pay all taxes and yearly hazard or property insurance premiums. Hukic Dep. Ex. 2 ¶¶ 2, 4; Pltf. 56.1 Resp. Aurora ¶ 12; Pltf. 56.1 Resp. Ocwen ¶ 17. The Mortgage Agreement allows the borrower to pay the taxes and insurance premiums directly to the person owed payment provided that:

Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrow shall promptly furnish to Lender receipts evidencing the payments.

Hukic Dep. Ex. 2 ¶¶ 2, 4; Pltf. 56.1 Resp. Aurora ¶ 12; Pltf. 56.1 Resp. Ocwen ¶¶ 17, 18.

The April 1998 Mortgage Payment to LSB

Hukic submitted his monthly payments to LSB using money orders. Pltf. 56.1 Ocwen ¶ 8. Hukic's monthly payments were initially $1,334.32. Aurora 56.1 Rep. ¶ 6. On April 8, 1998, Hukic submitted a $1,335 money order to LSB. Pltf. 56.1 Resp. Ocwen ¶ 9. LSB made an "input error" or a "bookkeeping error" and entered the amount as $1,335. Pltf. 56.1 Resp. Aurora ¶10; Pltf. 56.1 Resp. Ocwen ¶ 9.*fn4

Aurora Begins Servicing Hukic's Mortgage

On or about May 8, 1998, Hukic's mortgage loan was transferred from LSB to Aurora for servicing. Pltf. 56.1 Resp. Ocwen ¶ 10; Aurora 56.1 Rep. ¶ 4. LSB forwarded only $1,135 to Aurora to be applied to Hukic's loan. Pltf. 56.1 Resp. Aurora ¶ 7. Because the amount of money received by Aurora was $200 less than the mortgage payment amount, Hukic's funds were placed in a "suspense account" and were not applied to the payment due for April 1998. Pltf. 56.1 Resp. Aurora ¶ 9. Shortly after the mortgage was transferred and again on August 25, 1998, Aurora told Hukic that his April 1998 payment was deficient and that Hukic should request a refund from the issuer of the money order that he used to make his April 1998 payment. Pltf. 56.1 Resp. Ocwen ¶¶ 11, 12. Hukic did not go back to the money order issuer for a refund of the $200 nor did Hukic or his attorneys contact LSB regarding the April 1998 money order payment. Pltf. 56.1 Resp. Ocwen ¶¶ 13-15. Instead, Hukic faxed a copy of the April 1998 money order to Aurora in May, June, and July 1998. Aurora 56.1 Rep. ¶ 5. Although Hukic continued to make full and timely payments to Aurora, Hukic's loan appeared to be one-month delinquent because each of his subsequent monthly payments was applied to the amount due for the prior month. Pltf. 56.1 Resp. Aurora ¶ 10.

When Aurora began servicing the loan, LSB advised Aurora that Hukic's hazard insurance had expired. Consequently, Aurora forced a coverage insurance binder on the account. Pltf. 56.1 Resp. Aurora ¶ 11; see also Hukic Dep. Ex. 8. Aurora mailed a copy of the binder to Hukic and told him that if current evidence of insurance was not received prior to the expiration of the sixty day binder period, the binder would go to the policy and an escrow account would be established to pay the $1,716 annual premium for policy year April 1998 to April 1999. Id. Evidence of insurance was not received, and Aurora advanced the funds for hazard insurance. Id. Aurora further advised Hukic's counsel that it paid Hukic's premiums for the April 1999 to April 2000 year. Id.

In addition to paying Hukic's property insurance, Aurora paid Hukic's property taxes in the amount of $1,297.28 for the first half of 1999. Pltf. 56.1 Resp. Ocwen ¶ 20. If Hukic paid his property taxes directly, the Mortgage Agreement obligated him to provide evidence of proof of payment. Pltf. 56.1 Resp. Ocwen ¶ 19. However, Hukic refused numerous requests to provide this information. Id. In July and November 1999 Hukic's insurance agent faxed Aurora insurance information, but the record is silent on what information was provided. Aurora 56.1 Rep. ¶ 7. Hukic was apprised regarding problems with the payment of property taxes and insurance, but took no actions to correct the problems because he claimed that it was not his responsibility. Pltf. 56.1 Resp. Aurora ¶ 12. Aurora established an escrow account pursuant to the terms of the mortgage agreement for the reimbursement of the money it had advanced to pay Hukic's 1999 property taxes and Hukic's monthly payment increased as a result. Pltf. 56.1 Resp. Ocwen ¶¶ 11, 21; see also Aurora Ex. 8.*fn5 Despite the increase, Hukic continued to make monthly payments in the amount of $1,335. Pltf. 56.1 Resp. Ocwen ¶ 23.

Aurora has not serviced Hukic's loan since February 2000. Pltf. 56.1 Resp. Aurora ¶ 18. Aurora continued to report the loan as delinquent through the time that the loan servicing was transferred from Aurora to Ocwen on or about March 9, 2000. Pltf. 56.1 Resp. Aurora ¶ 17. Hukic contacted Aurora telephonically on fifteen occasions within the first five months of Aurora's servicing of the loan and a total of thirty-six times during Aurora's tenure servicing of the loan. Pltf. 56.1 Resp. Aurora ¶ 15.

Ocwen Begins Servicing Hukic's Mortgage

Hukic's mortgage was transferred from Aurora to Ocwen for servicing on March 3, 2000. Aurora 56.1 Rep. ¶ 9; Ocwen 56.1 Rep. ¶ 5. As of March 13, 2000, Ocwen's records reflect that Hukic owed $7,261.16 in principal and interest, escrow advances and late charges. Pltf. 56.1 Resp. Ocwen ¶ 27; Ocwen Ex. 15. In addition to the amount owed as a result of the April 1998 mortgage payment, Ocwen asserts that Hukic's account was in default when the mortgage was transferred to it for servicing because Hukic failed to make his January 1, 2000 mortgage payment. Pltf. 56.1 Resp. Ocwen ¶ 25; see also Ocwen Ex. B. Ocwen's comment log notes three entries on March 20, 2000 associated with a January 1, 2000 payment, but there is no explanation regarding the meaning of the log's codes or entries. Id.

Although Hukic was paying his property taxes directly, he failed to provide Ocwen with a copy of his tax bill and proof of payment even though his Mortgage Agreement required him to do so. Pltf. 56.1 Resp. Ocwen ¶ 34. On or about September 8, 2000, Ocwen advanced $1,116.38 to pay Hukic's property taxes and made adjustments to Hukic's escrow account to reflect the funds it had remitted on his behalf. Pltf. 56.1 Resp. Ocwen ¶ 35. Once Ocwen learned of his payments, Ocwen requested that Hukic obtain a refund of the property taxes he paid to Cook County and that Hukic remit the full amount of the refund to Ocwen to reimburse Ocwen for the deficiency in the escrow account. Pltf. 56.1 Resp. Ocwen ¶ 36. Hukic did not request a refund of the property taxes for himself and did not remit funds to Ocwen to cure the deficiency in his escrow account. Pltf. 56.1 Resp. Ocwen ¶ 37.

On February 7, 2001 and October 15, 2001, Ocwen advanced funds in the amount of $1,319.12 and $1,636.49, respectively, to pay Hukic's property taxes and made adjustments to Hukic's escrow account to reflect the funds it had remitted on his behalf. Pltf. 56.1 Resp. Ocwen ¶¶ 38, 39. Hukic continued to pay $1,335 for his monthly mortgage payment representing principal and interest.

Ocwen's Notifies Hukic that he is in Default

Ocwen mailed Hukic a notice of default on March 13, 2000, eight days after Ocwen began servicing Hukic's loan. The notice advised Hukic that he was required to remit a payment of $7,261.16 by April 12, 2000 to cure the delinquency on his account and that failure to cure the default could result in the initiation of foreclosure proceedings. Pltf. 56.1 Resp. Ocwen ¶¶ 26, 27, 28. The notice provided a method to dispute the debt. It stated: "Unless you dispute the validity of the debt, or any portion thereof, within thirty days after receipt of this letter, the debt will be assumed to be valid by Ocwen Federal. If you notify Ocwen Federal in writing within thirty days that the debt or a portion of the debt is disputed, Ocwen Federal will send you verification of the debt.

Verification of the debt or a portion thereof may be requested in writing from the below named Loan Resolution Consultant within thirty days."

Pltf. 56.1 Resp. Ocwen ¶ 29.

On March 21, 2000, April 7, 2000, August 30, 2000, September 11, 2000, October 11, 2000, November 9, 2000, December 12, 2000, February 13, 2000, March 14, 2001, April 13, 2001, and May 15, 2001, Ocwen mailed and Hukic received and read similar notices of default. Pltf. 56.1 Resp. Ocwen ¶¶ 30, 31. Hukic did not dispute the validity of the debt or deficiency. Pltf. 56.1 Resp. Ocwen ¶ 33. On December 6, 2000, Ocwen wrote Hukic and advised him that his mortgage had been transferred to Ocwen's Early Intervention Department for review and possible foreclosure. Pltf.

56.1 Resp. Ocwen ¶ 32. The letter stated, "We hope that you will take advantage of this invitation to settle your account and avoid further damage to your credit rating." Id.

On January 11, 2001, Hukic's counsel, Stephen Komie ("Komie"), sent a letter to Aurora stating that his firm had been retained to represent Hukic in connection with Aurora's "libelous and slanderous behavior" toward Hukic. Pltf. 56.1 Resp. Aurora ¶ 19; Komie letter. The letter advised that Hukic made timely payments to Aurora and was paying his property taxes directly. Komie stated that Hukic had been unable to refinance his home due to Aurora's negative reports. Id. Komie sent another letter on July 18, 2001 and on October 12, 2001, Aurora's counsel responded. Pltf. 56.1 Resp. Ocwen ¶ 45; Pltf. 56.1 Aurora ¶ 11 see also Hukic Dep. Ex. Aurora wrote ...


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