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David v. Bayview Loan Servicing, LLC

United States District Court, N.D. Illinois, Eastern Division

March 3, 2017

GEORGE DAVID, Plaintiff,


          Robert M. Dow, Jr., United States District Judge

         This matter is before the Court on Defendant's motion [25] to dismiss Plaintiff's Second Amended Complaint [24] for lack of jurisdiction and for failure to state a claim. For the reasons stated below, Defendant's motion [25] is granted. Plaintiff's Second Amended Complaint fails to establish that the Court has jurisdiction over this suit. Plaintiff shall be given until April 7, 2017 to file a Third Amended Complaint. To survive dismissal, the Third Amended Complaint must either: 1) allege a viable federal claim under the Real Estate Settlement Procedures Act (“RESPA”), which would give the Court federal question jurisdiction over Plaintiff's lawsuit and allow the Court to exercise supplemental jurisdiction over Plaintiff's claim under the Illinois Consumer Fraud Act (“ICFA”); or 2) demonstrate that the amount in controversy in this suit is at least $75, 000 and that there is complete diversity among the parties. Defendant shall have until March 24, 2017 to file a statement with the Court identifying all the citizenship information necessary to determine whether complete diversity exists, as explained below.

         I. Background[1]

         In his Second Amended Complaint, Plaintiff alleges that Defendant violated the Fifth Amendment to the United States Constitution and the ICFA by depriving him of his home without due process. Plaintiff alleges that he is a citizen of Illinois, that Defendant is “a company incorporated in the state of Delaware, ” [24] at 1, that the amount in controversy exceeds $75, 000, and therefore that the Court has diversity jurisdiction over his claims.

         In 1987, Plaintiff's family purchased a four-unit apartment building located at 6522 N. Richmond Street in Chicago (the “Property”). Plaintiff lives (or lived) in the Property with his elderly mother, his brothers, their spouses, and their thirteen minor children. There was a mortgage on the Property, held by lender Taylor Bean & Whitaker.

         In May 2007, following months of illness, Plaintiff was admitted to the hospital and underwent multiple surgeries on his brain and back. Due to his illness, Plaintiff lost his family business and defaulted on his mortgage.

         Plaintiff sought to modify the mortgage through the federal Home Affordable Modification Program (“HAMP”). In March 2009, Plaintiff filed an application for modification with Taylor Bean & Whitaker. The application contained an “actual budget” and an “affordable proposed budget.” [24] at 5. In 2010, Taylor Bean & Whitaker went out of business and Defendant took over the mortgage. Plaintiff submitted two applications for modification to Defendant in 2010 and 2011 but did not receive any response from Defendant.

         On October 12, 2012, the Cook County Circuit Court entered a judgment of foreclosure against Plaintiff and ordered the Property sold.

         On November 8, 2012, Plaintiff filed another HAMP application for modification with Defendant. This application showed a total household income of $6382.00 and was supported by pay stubs, tax returns, and government issued benefits letters. Plaintiff alleges that throughout this process, he “was told by [Defendant's] representatives not to worry, ‘[Defendant] has an in-house program that qualifies homeowners based on their income.'” [24] at 6. Plaintiff “relied on [this] information” and “spent a large sum of his family's savings remodeling portion[s] of the property.” Id.

         On September 20, 2013, Plaintiff received a letter from Defendant informing him that he did not qualify for a loan modification because his “$2488.18 household income is outside the range of required income.” Id. Plaintiff complained to the Illinois and Florida Attorneys General. On October 17, 2013, Defendant requested that Plaintiff fill out a new application with supporting documents. Defendant insisted that the application must be completed by the next day. This deadline was impossible for Plaintiff to meet because the application involved several families. Id. at 6-7. Plaintiff submitted a new HAMP application and supporting documents to Defendant on October, 2013, showing a verified monthly income of $6766.00. Id.

         On October 25, 2013, Plaintiff filed an emergency motion in the Cook County Circuit Court seeking to stay the sale of the Property. Defendant voluntarily stopped the sale. The judge did not, as Plaintiff had expected, question Defendant about why it had rejected Plaintiff's HAMP applications. Id. at 7.

         On January 17, 2014, Plaintiff received an email from an employee of Defendant, Andre South, asking to verify his mother's address. South wrote to Plaintiff: “George the file looks good. We can get your income cleared if we resolve this one missing document[.]” [24] at 7.

         Plaintiff obtained a state identification card for his mother and verified her address with Defendant. Id. at 7-8.

         On February 7, 2014, Plaintiff received a letter from Defendant denying his HAMP application on the basis that his total gross income, which Defendant verified as $2, 497.90, was not high enough to make Plaintiff eligible for HAMP. Id. at 8. On February 10, 2016, the Cook County Circuit Court approved the sale of the Property and the Property was sold. See [24] at 8. Plaintiff is pursuing an appeal of the order approving sale in the Illinois ...

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