Chapter 3

Claims for Erroneous Mortgage Billing Statements and Failure to Verify the Mortgage Debt

Alan M. White is an attorney with Community Legal Services, Inc., 3638 North Broad Street, Philadelphia, Pennsylvania 19140, (215) 227-2400, fax: (215) 227-2435. He has also been a fellow and consultant with the National Consumer Law Center in Boston. His practice includes representation of low-income consumers in mortgage foreclosures, bankruptcies, student loan disputes, real estate matters, and consumer fraud class actions. He has served on the Education Committee of the Eastern District of Pennsylvania Bankruptcy Conference and has been a course planner or faculty member for numerous continuing legal education programs on consumer and bankruptcy law, including National Association of Consumer Advocates, Pennsylvania Bar Institute, Philadelphia Bar Education Center, and Pennsylvania Legal Services. He has published a number of research papers and articles on consumer law issues and has testified at hearings held by the Federal Reserve Board and the U.S. Department of Housing and Urban Development on predatory mortgage lending. Mr. White received his B.S. from the Massachusetts Institute of Technology in 1979 and his J.D. from the New York University School of Law in 1983. Section 3.1 is a complaint detailing how the mortgage servicer repeatedly and increasingly misstated the payment amount due by large and inconsistent amounts on a mortgage, causing the homeowner great anxiety and stress. It alleges the mortgage servicer failed to respond to the homeowners qualified written request under the Real Estate Settlement Procedures Act1 and to verify the mortgage debt the Fair Debt Collection Practices Act.2 Section 3.2 is a proposed finding of fact and conclusions of law. In addition to the federal claims alleged in the complaint, it contains state claims for failing to provide the correct amount owed, violating the state cure statute, and a UDAP claim for the mortgage servicers misconduct.

1 2

See National Consumer Law Center, Foreclosures Ch. 5 (1st ed. 2005). See National Consumer Law Center, Fair Debt Collection 5.7 (5th ed. 2004).

3.1

Complaint Detailing How the Mortgage Servicer Misstated the Payment Amount Due
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA

__________________________________________ [PLAINTIFF] : : Plaintiff : v. : CIVIL ACTION NO. [No.] : LITTON LOAN SERVICING LP : __________________________________________:

COMPLAINT 1. This is an action by a low-income homeowner against a mortgage

servicing company seeking a proper accounting of her mortgage and statutory damages under the Fair Debt Collection Practices Act and the Real Estate Settlement Procedures Act. 2. Jurisdiction over this matter is conferred upon this Court by 12 U.S.C. 2614, 15 U.S.C. 1692 and 28 U.S.C. 1331. The court has supplemental jurisdiction over her state law claims. 3. Venue lies in this judicial district in that the events which gave rise to

this claim occurred here and the property which is the subject of the action is situated within this district. 4. Plaintiff [Plaintiff] is a natural person residing at [Plaintiffs Address] Philadelphia, Pennsylvania 19140. 5. The Defendant, Litton Loan Servicing, LP (Litton), is a corporation

with its principal offices at 4828 Loop Central Drive, Houston Texas. Litton is the

servicing agent for the holder of [Plaintiff]s mortgage. The mortgage on [Plaintiff]s home is held by Wells Fargo Bank Minnesota, NA as the trustee for an investor-owned trust that holds a large pool of mortgage loans sold by Ocwen Federal Savings Bank. 6. [Plaintiff] and her husband, [Plaintiffs Spouse], purchased their home in North Philadelphia in 1984. 7. In December 1998 [Plaintiff and Spouse] refinanced their mortgage and entered

into a loan with Pierucci, Inc., trading as Sunset Mortgage Company. The mortgage was later sold to Ocwen Federal Savings Bank, who in turn sold it to Wells Fargo Bank of Minnesota, trustee. Ocwen continued to service the mortgage. 8. [Plaintiff] eventually filed a civil suit against Ocwen, seeking to rescind the 1998

loan and seeking other relief. 9. The civil suit against Ocwen was settled by a December 2000 settlement and loan modification agreement that, among other things, called for Ocwen to reduce the loan principal to $25,984 and the interest rate to 8%, and for [Plaintiff] to make monthly payments of principal and interest of $190.66. A copy of the December 2000 loan modification agreement is attached as Exhibit A. 10. At some time on or about April 29, 2002 the servicing of the mortgage loan was

transferred from Ocwen Federal Savings Bank to Defendant Litton. 11. Shortly after the servicing transfer, Litton demanded that [Plaintiff] make

monthly payments of $394.79, which was the payment prior to the December 2000 modification. 12. On May 21, 2002, [Plaintiff], through her lawyer, reminded Litton of the terms

of the loan modification, including the $190.66 payment amount, enclosed another copy of the modification agreement, and asked Litton to correct [Plaintiff]s account records accordingly.

13.

Nevertheless, Litton failed and refused to revise its account records to reflect the

loan modification agreement. 14. On or about July 21, 2004 Litton mailed a statement to [Plaintiff] incorrectly

asserting that the mortgage payments were delinquent. 15. On or about August 10, 2004 [Plaintiff] wrote to Litton disputing the alleged

delinquency and asking Litton to correct its account records to reflect that her payments of $190.66 were paid up to date. 16. On August 18, 2004 Litton acknowledged [Plaintiff]s written request for

account information and adjustments. On or about October 8, 2004, Litton wrote to [Plaintiff] acknowledging the loan modification and asserting that Littons records had been updated to reflect the loan modification. The same letter stated that [Plaintiff]s payment was in fact $190.66, and was due for October 1, 2004, in other words, her payments were current. 17. [Plaintiff] subsequently received a letter dated September 22, 2004, asserting

that she had an escrow deficit of $5285.17, and that effective November 1, 2004 her mortgage payment would increase to 455.8 (sic). 18. At about the same time in September 2004 [Plaintiff] received her monthly

statement dated September 15, 2004 showing the amount due by October 1 as $190.66. This statement also, however, reflected an escrow deficit of $5,285.17 and other fees due of $40,927.12. No explanation was provided for the escrow deficit or the other fees. 19. In November, 2004, [Plaintiff] received a letter from Litton asserting that her

loan was past due for November and December, 2004, and that the total due was $1461. No explanation was provided for this curious arithmetic. Meanwhile [Plaintiff] continued sending the $190.66 monthly payments to Litton. 4

20.

In December 2004 [Plaintiff] received her monthly statement dated December

15 which called for a current payment amount of $666.96, and a total amount due by January 1 2005 of $2,118.43. The other fees due had increased slightly to $40,936.12. 21. [Plaintiff] received another letter from Litton dated January 5, 2005 asserting

that she owed three payments, and must send $2,127.96 today. This amount was apparently calculated on the same basis as the December statement amount, with the January 17 late fee added in advance. A copy of the January 5 letter is attached as Exhibit B. This letter also falsely stated or implied that foreclosure was imminent and could begin immediately or today if payment was not made. 22. Also dated January 5, 2005 were two additional letters sent by Litton. One,

entitled Notice of Default and Intent to Accelerate, demanded $2,127.96, and stated that after 45 days Litton could accelerate the mortgage balance and foreclose the property. This letter is attached as Exhibit C. 23. The other January 5, 2005 letter, entitled Appendix A, is similar to the notice

required by Pennsylvania law prior to foreclosure. This letter is attached as Exhibit D. 24. Exhibit D says that the monthly payments due were in the amount of $455.80

each, contradicting the statements calling for $666.96. Exhibit D also contains mathematically inconsistent amounts needed to be paid by [Plaintiff], on page three. The letter asserts that three payments of $455.80 are due, plus $19.06 in late charges and $319.18 in deferred late charges. These amounts total $1705.64. However the total amount demanded is $2,127.96. 25. [Plaintiff] received another letter dated January 27, 2005, purporting to respond to her attorneys written request for account information. Exhibit E. The January 27 letter states that the payment amount is $666.96 effective October 1, and is attributable to advances for insurance 5

and taxes. The letter includes an escrow analysis that makes reference to an annual payment of $417.39 for insurance, but does not explain the escrow deficit in excess of $5,000. 26. It is mathematically impossible for annual insurance payments of $417.39 from

2002 to 2004 to accumulate to a deficit of $5,000. [Plaintiff] pays her own real estate taxes, which are about $500 per year. Even if Litton had paid the taxes from 2002 through 2004, that would account only for $1,500 of the asserted escrow advances. 27. The January 27 letter also includes a payment history, but only from September

2004 through December 2004. The history printout included is incomprehensible, does not identify transactions as payments, advances or charges, does not begin to address the questions and concerns expressed by [Plaintiff] and her attorney, and is completely unresponsive to her qualified written requests, which asked for an explanation of the $5,000 escrow deficit. 28. On or about May 13, 2005 Litton, through its attorneys Udren Law Office, P.C.,

mailed a Reinstatement Quote to [Plaintiff]. The May 13, 2005 reinstatement is attached as Exhibit F. The total amount claimed to be due is shown as $47,103.60. This document calls for monthly payments of $362.61, an amount that does not correspond to the $190.66 payment for principal and interest, the $666.96 payment shown on the December statement, or the $455.80 referred to on Exhibit D. 29. Exhibit E includes a demand for payment for numerous inspections of the

property, despite the fact that [Plaintiff] has been in constant communication with Litton, has a working telephone, and Litton has no basis to believe there is any danger of the property being abandoned. 30. Exhibit E includes a demand for $400 for a BPO, that is, a broker price opinion.

This amount is not properly chargeable to [Plaintiff] under the contract or Pennsylvania law. 6

31.

Having no way to determine the correct amount due, [Plaintiff] sent $1400 to

Litton on May 6, 2005 (enough to cover the principal and interest payments due from November 2004 through May 2005) in an effort to show her good faith and desire to maintain her mortgage payments. 32. Litton has, for the past two years, provided [Plaintiff] with inconsistent,

incomprehensible statements and correspondence and has made it impossible for her to maintain her monthly mortgage payments. To the extent Litton has made advances for taxes and insurance Litton has failed to identify the amounts advanced in a clear and simple manner and to establish a reasonable plan for [Plaintiff] to repay those amounts. 33. [Plaintiff] has suffered severe emotional distress and anxiety as a result of

Littons conduct, and has expended money to travel to and from her attorneys office and to copy documents in her vain efforts to resolve this account dispute. COUNT I FAIR DEBT COLLECTION PRACTICES ACT 34. Litton was a debt collector within the meaning of the Fair Debt Collection

Practices Act (FDCPA), 15 U.S.C. 1692a, at the time it became the servicing agent for [Plaintiff]s loan, in that it regularly collects debts owed to another, and the debt was asserted by Litton to be contractually in default at the time it became the servicer of the debt. 35. Each of the letters described above incorrectly stated the amount and the status

of [Plaintiff]s debt. 36. Litton failed to provide verification of the alleged debt to [Plaintiff] in response

to her timely written request for such written verification. 37. Due to the repeated and continuing violations of the FDCPA, [Plaintiff] is

entitled to actual and statutory damages under 15. U.S.C. 1692k. 7

COUNT II - RESPA 38. Litton is a servicer of a federally related mortgage loan within the meaning of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605. 39. Each of [Plaintiff]s (and her attorneys) written requests for information about

her account and correction of Littons numerous errors were qualified written requests within the meaning of RESPA. 40. Litton failed to respond in a proper and timely way to [Plaintiff]s qualified

written requests for information about, and corrections to, her mortgage account, in violation of 12 U.S.C. 2605(e). COUNT III - PENNSYLVANIA ACT 6 of 1974 41. [Plaintiff]s mortgage is a residential mortgage obligation covered by

Pennsylvania Act 6 of 1974, 41 Pa. Stat. 101-605. 42. Litton has repeatedly failed to provide [Plaintiff] with an accurate notice of the

amount required to cure her mortgage default, as required by 41 P.S. 403, and has improperly demanded payment of improper amounts and has thwarted her right to cure her default, under 41 P.S. 404, and has applied some of her payments to amounts not due under her mortgage and Act 6. WHEREFORE, Plaintiff requests judgment in her favor and against Litton for three times the amount of the illegal charges. COUNT IV - PENNSYLVANIA CONSUMER PROTECTION LAW

43.

Littons conduct described above constituted unfair and deceptive acts

and practices, as defined by 73 Pa. Stat. 201-2(4). 44. [Plaintiff] has suffered an ascertainable loss of money as a result of

Littons unfair and deceptive practices. WHEREFORE, Plaintiff requests that the court enter judgment in her favor and against defendants, for a proper accounting and application of her mortgage payments and for actual, statutory, treble and/or punitive damages, and attorneys fees and costs, along with any other and further relief as the court deems just and proper.

______________________________ ALAN M. WHITE Attorney for Plaintiff

3.2

Proposed Finding of Fact and Conclusions of Law

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA

__________________________________________ [PLAINTIFF] : : Plaintiff : v. : : LITTON LOAN SERVICING LP : __________________________________________:

CIVIL ACTION NO.

[No.]

PLAINTIFFS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW Findings of Fact 45. This is an action by a low-income homeowner against a mortgage

servicing company seeking an accounting of her mortgage and statutory damages under the Fair Debt Collection Practices Act and the Real Estate Settlement Procedures Act and state law. 46. Plaintiff [Plaintiff] is a natural person residing at [Plaintiffs Address] Philadelphia, Pennsylvania 19140. 47. The Defendant, Litton Loan Servicing, LP (Litton), is a corporation

with its principal offices at 4828 Loop Central Drive, Houston Texas. Litton is the servicing agent for the holder of [Plaintiff]s mortgage. The mortgage on [Plaintiff]s home is held by Wells Fargo Bank Minnesota, NA as the trustee for an investor-owned trust that holds a large pool of mortgage loans. 48. [Plaintiff] and her husband, [Plaintiffs Spouse], purchased their home in North Philadelphia in 1984.

10

49.

In December 1998 [Plaintiff and Spouse] refinanced their mortgage and entered

into a loan with Pierucci, Inc., trading as Sunset Mortgage Company. The mortgage was later sold to Ocwen Federal Savings Bank, who in turn sold it to Wells Fargo Bank of Minnesota, trustee. Ocwen continued to service the mortgage. 50. [Plaintiff] eventually filed a civil suit against Ocwen, seeking to rescind the 1998

loan and seeking other relief. 51. The civil suit against Ocwen was settled by a December 2000 settlement and loan modification agreement (the 2000 modification) that, among other things, called for Ocwen to reduce the loan principal to $25,984 and the interest rate to 8%, and for [Plaintiff] to make monthly payments of principal and interest of $190.66. Exhibit 1. 52. On April 29, 2002 the servicing of the mortgage loan was transferred from

Ocwen Federal Savings Bank to Defendant Litton. Exhibit 2. 53. For a period of 29 months, from April 29, 2002, through at least September

2004, Litton failed and refused to adjust its records to reflect the 2000 modification, and as a result continued demanding monthly payments ranging from $343 to $666 or more from [Plaintiff], contrary to the terms of the modification. As a result [Plaintiff] received dozens of letters, account statements and telephone calls from Litton that completely misrepresented the amounts she owed. 54. Litton appears to have corrected the loan principal and interest rate by the end of

September 2004. Exhibit 8, 9. However, Litton continued demanding repayment by [Plaintiff] of legal fees incurred by Ocwen prior to the 2000 modification, contrary to the terms of the modification agreement. (Exhibit 3, entry dated 10/21/2004). 55. On May 9, 2002, Litton sent [Plaintiff] a letter demanding that [Plaintiff] make 11

monthly payments of $394.79, which was the payment prior to the 2000 modification, and asserting that she was past due for payments since September 2000. Exhibit 2. 56. On May 21, 2002, [Plaintiff], through her lawyer, faxed a letter to Litton calling

attention to the terms of the loan modification, including the $190.66 payment amount, enclosing another copy of the 2000 modification agreement, and asking Litton to correct [Plaintiff]s account records accordingly. These documents were received on the same day by Litton. Exhibit 1. 57. On October 25, 2002 Litton mailed a adjustable rate mortgage loan adjustment

notice asserting that the principal balance was $33,126.86 and the new monthly payment would be $343.74, based on an interest rate of 11.875%, considerably in excess of the amounts provided for in the 2000 modification. Exhibit 4. 58. Litton also mailed rate adjustment notice letters to [Plaintiff] on April 30, 2003, October 24, 2003, and April 26, 2004, each of which incorrectly stated that [Plaintiff]s mortgage bore an adjustable interest rate based on the original Note, instead of the fixed 8% rate called for in the 2000 modification. Exhibit 3. 59. Litton mailed a monthly billing statement on April 14, 2004, May 14, 2004, June

14, 2004, July 15, 2004, August 13, 2004, and September 15, 2004, none of which reflected the lower interest rate and payment provided for in the 2000 modification. See Exhibit 3, entries for corresponding dates. 60. On or about August 10, 2004 [Plaintiff] wrote to Litton disputing the alleged

delinquency and asking Litton to correct its account records to reflect that her payments were to be $190.66, and not $343.74 (or whatever amounts Litton was demanding based on the adjustable rate Note.) Exhibit 5. 12

61.

On August 18, 2004 Litton acknowledged [Plaintiff]s written request for

account information and adjustments. Exhibit 6. 62. On September 3, 2004 and again on September 16, 2004, Litton wrote to [Plaintiff] acknowledging the loan modification and asserting that Littons records had been updated to reflect the loan modification. The September 16 letter stated that [Plaintiff]s payment was in fact $190.66, and was due for October 1, 2004, in other words, her payments were current. Exhibits 8, 9. 63. However, [Plaintiff] then received a letter dated September 22, 2004, asserting

that she had an escrow deficit of $5285.17, and that effective November 1, 2004 her mortgage payment would increase to 455.8 (sic). Exhibit 11. 64. The September 22, 2004 letter was incorrect. As of that date, Litton had made

the following payments for taxes and insurance on [Plaintiff]s property: a. b. c. d. Total: 65. $528.66 $417.61 417.39 $2,965.28 $4,328.94 insurance premium September 5, 2002 insurance premium May 28, 2003 insurance premium May 10, 2004 real estate taxes paid on January 29, 2004 (Defendants Exhibit D15)

At about the same time in September 2004 [Plaintiff] received her monthly

statement dated September 15, 2004 showing the amount due by October 1 as $190.66. This statement also, however, reflected an escrow deficit of $5,285.17 and other fees due of $40,927.12. No explanation was provided for the escrow deficit or the other fees. Exhibit 12. 66. On December 6, 2004 Litton sent [Plaintiff] a letter saying she was past due for

two months, and owed a total of $1,451.47. Exhibit 13. This was clearly inconsistent with the 13

September notices referring to a payment of $455 to recover the tax and insurance advances. 67. Also in December 2004 [Plaintiff] received her monthly statement dated

December 15 which called for a current payment amount of $666.96, and a total amount due by January 1 2005 of $2,118.43. The other fees due had increased slightly to $40,936.12. Exhibit 14. 68. [Plaintiff] received another letter from Litton dated January 5, 2005 asserting

that she owed three payments, and must send $2,127.96 today. Exhibit 15. This amount was apparently calculated on the same basis as the December statement amount, with the January 17 late fee added in advance. Exhibit 15 also falsely stated or implied that foreclosure was imminent and could begin immediately or today if payment was not made. Pennsylvania law requires a 30-day notice prior to foreclosure, and also prohibits foreclosure for up to 90 days if a homeowner applies for emergency mortgage assistance. 41 Pa. Stat. 403, 35 Pa. Stat. 1680.403c. 69. Also dated January 5, 2005 were two additional letters sent by Litton. One,

entitled Notice of Default and Intent to Accelerate, demanded $2,127.96, and stated that after 45 days Litton could accelerate the mortgage balance and foreclose the property. Exhibit 16. 70. The other January 5, 2005 letter, entitled Appendix A, is similar to the notice

required by Pennsylvania law prior to foreclosure. Exhibit 17. 71. Exhibit 17 says that the monthly payments due were in the amount of $455.80

each, contradicting the statements calling for $666.96. Exhibit 17 also contains mathematically inconsistent amounts needed to be paid by [Plaintiff], on page three. The letter asserts that three payments of $455.80 are due, plus $19.06 in late charges and $319.18 in deferred late charges. These amounts total $1705.64. However the total amount demanded is $2,127.96. 14

72.

Although Exhibit 17 demands $319.18 in deferred late charges, other letters sent

by Litton (Exhibits 8 and 19) state or suggest that Litton was waiving the late charges. 73. [Plaintiff] received another letter dated January 27, 2005, purporting to respond to her attorneys written request for account information. Exhibit 19. The January 27 letter states that the payment amount is $666.96 effective October 1, and is attributable to advances for insurance and taxes. The letter includes an escrow analysis that makes reference to an annual payment of $417.39 for insurance, but does not explain the escrow deficit in excess of $5,000. 74. The January 27 letter also includes a payment history, but only from September

2004 through December 2004. The history printout included is incomprehensible, does not identify transactions as payments, advances or charges, does not begin to address the questions and concerns expressed by [Plaintiff] and her attorney, and is completely unresponsive to her qualified written requests, which asked for an explanation of the $5,000 escrow deficit and all other amounts demanded, as well as an account history from 2002. 75. In the five months after September 2004, when Litton had allegedly corrected

[Plaintiff]s account to reflect the loan modification agreement, [Plaintiff] received conflicting notices demanding three different monthly payment amounts, escrow advances that were not due, and a mysterious $40,936 fee balance. 76. [Plaintiff] was understandably confused and upset during this period and

frustrated in her attempts to determine in telephone conversations with Litton exactly what she owed and why. 77. On or about May 13, 2005 Litton, through its attorneys Udren Law Office, P.C.,

mailed a Reinstatement Quote to [Plaintiff]. Exhibit 22. The total amount claimed to be due is shown as $47,103.60. This document calls for monthly payments of $362.61, an amount that 15

does not correspond to the $190.66 payment for principal and interest, the $666.96 payment shown on the December statement, or the $455.80 referred to on Exhibit 17, i.e. a fourth conflicting amount for her monthly payment. 78. Exhibit 22 includes a demand for payment for numerous inspections of the

property, despite the fact that [Plaintiff] has been in constant communication with Litton, has a working telephone, and Litton has no basis to believe there is any danger of the property being abandoned. 79. Exhibit 22 includes a demand for $400 for a BPO, that is, a broker price opinion.

This amount is not properly chargeable to [Plaintiff] under the contract or Pennsylvania law, because it was not a reasonable and necessary cost of foreclosure, incurred after the mailing of a proper 30-day notice of intent to foreclose, 41 Pa. Stat. 403, 406. 80. Having no way to determine the correct amount due, [Plaintiff] sent a certified

check for $1400 to Litton on May 6, 2005 (enough to cover the seven principal and interest payments due from November 2004 through May 2005) in an effort to show her good faith and desire to maintain her mortgage payments. This payment was later refused by Litton. 81. To the present date it does not appear that Litton properly adjusted [Plaintiff]s

account, retroactively to January 2001, the effective date of the loan modification agreement. As a result, payments made and accepted from January 2001 to the present may have been applied improperly. 82. Litton has, for the past two years, provided [Plaintiff] with inconsistent,

incomprehensible statements and correspondence and has made it impossible for her to maintain her monthly mortgage payments. 83. To the extent Litton has made advances for taxes and insurance, Litton has failed 16

to identify these amounts advanced in a clear and simple notice and payment demand, and has failed to establish a reasonable plan for [Plaintiff] to repay those amounts. 84. [Plaintiff] has suffered severe confusion, frustration, emotional distress, loss of

sleep, anxiety and fear of losing her home as a result of Littons conduct, continuously during the nearly four years from May 2002 to the present. Conclusions of Law 85. Jurisdiction over this matter is conferred upon this Court by 12 U.S.C. 2614, 15 U.S.C. 1692 and 28 U.S.C. 1331. The court has supplemental jurisdiction over the state law claims. COUNT I FAIR DEBT COLLECTION PRACTICES ACT 86. Litton was a debt collector within the meaning of the Fair Debt Collection

Practices Act (FDCPA), 15 U.S.C. 1692a, at the time it became the servicing agent for [Plaintiff]s loan, in that it regularly collected debts owed to another. 87. The FDCPA coverage exception for servicers of debts that are not past due does

not apply to Litton. 15 USC 1692a(6)(F)(iii). Litton asserted in its initial communication with [Plaintiff] that her payments were seriously past due. Exhibit 2. Whether Litton was correct or not, the assertion of a default is sufficient to bring Litton under the FDCPA. Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir. 2003). 88. Each of the letters described above incorrectly stated the amount and the status

of [Plaintiff]s debt. 89. In particular, the four rate adjustment letters dated October 25, 2002, April 30,

2003, October 24, 2003, and April 26, 2004, the six monthly statements mailed in 2004 (including Exhibits 12 and 14), and the ten letters and notices (Exhibits 11-13, 15-17, 19-22) for 17

a total of twenty written communications to [Plaintiff], each constituted a separate violation of 15 U.S.C. 1692e. 90. Litton failed to provide verification of the alleged debt to [Plaintiff] in response

to her timely written request for such written verification, in violation of 15 U.S.C. 1692g(b). 91. Although the statute of limitations under the Federal statute is one year,

encompassing the written communication and other conduct from June 2004 to the present, Pennsylvanias Fair Credit Extension Uniformity Act, 73 Pa. Stat. 2270.1 to 2270.6, imposes the same requirements on debt collectors as the federal law. 73 Pa. Stat. 2270.4(A). A violation of the Pennsylvania debt collection provisions is per se a violation of the Pennsylvania Consumer Protection Law, 73 Pa. Stat. 201-9.2, 2270.6(A). The statute of limitations for private actions under the Consumer Protection law is six years. Gabriel v. OHara, 368 Pa. Super. 383, 534 A.2d 488 (1987). 92. Because of the difficulty of quantifying the misapplication of [Plaintiff]s

payments by Litton throughout the three year period at issue, it is appropriate to award the $100 minimum damages under the Pennsylvania Consumer Protection Law for each of the incorrect and misleading communications, for a total of $2,000. See In re Koresko, 91 B.R. 689 (Bankr. E.D. Pa. 1988). 93. Due to the repeated and continuing violations of the FDCPA, [Plaintiff] is

entitled to actual and statutory damages under 15. U.S.C. 1692k, as follows: A) $1,000 statutory damages under the FDCPA, B) actual damages of $ distress suffered from 2002 to the present, for anxiety and emotional

18

C) minimum statutory damages under the Pennsylvania Fair Credit Extension Uniformity Act and the Consumer Protection Law of $100 for each violation, for a total of $2,000, and D) reasonable attorneys fees and costs. COUNT II - RESPA 94. Litton is a servicer of a federally related mortgage loan within the meaning of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605. 95. The May 21, 2002 letter to Litton was a qualified written request to Litton,

within the meaning of 12 U.S.C. 2605(e)(1)(B) and was received on that date by Litton. 96. Litton failed to make appropriate corrections to the account within 60 days, and

failed to notify [Plaintiff] of any corrections, as required by 12 U.S.C. 2605(e)(2). 97. Each of [Plaintiff]s (and her attorneys) subsequent written requests for

information about her account and correction of Littons numerous errors were qualified written requests within the meaning of RESPA, including, among others, the January 13, 2005 letter to Litton, Exhibit 18. 98. Litton failed to respond in a proper and timely way to [Plaintiff]s qualified

written requests for information about, and corrections to, her mortgage account, in violation of 12 U.S.C. 2605(e). 99. As a result of a pattern or practice of noncompliance with the servicing

provisions of RESPA, Litton is liable to [Plaintiff] for actual damages in the amount of $ and statutory damages of $1,000. 12 U.S.C. 2605(f)(1). COUNT III - PENNSYLVANIA ACT 6 of 1974 100. [Plaintiff]s mortgage is a residential mortgage obligation covered by 19

Pennsylvania Act 6 of 1974, 41 Pa. Stat. 101-605. 101. Litton has repeatedly failed to provide [Plaintiff] with an accurate notice of the

amount required to cure her mortgage default, as required by 41 P.S. 403, has improperly demanded payment of amounts not due, and has thwarted her right to cure her default, under 41 P.S. 404. 102. The excess charges to [Plaintiff]s account include $319.18 in late charges

caused by Littons failure to implement the loan modification, Exhibit 17 page 3, the $400 BPO fee and $70 in inspection fees, Exhibit 22. 103. Litton is therefore liable to [Plaintiff] for three times the excess charges, 41 P.S.

502, or $2,367.54, together with reasonable attorneys fees and costs. COUNT IV - PENNSYLVANIA CONSUMER PROTECTION LAW 104. Littons conduct described above constituted unfair and deceptive acts and

practices, as defined by 73 Pa. Stat. 201-2(4). 105. [Plaintiff] has suffered an ascertainable loss of money as a result of Littons

unfair and deceptive practices. 106. [Plaintiff] is entitled to recover three times her actual damages, or $

, together with reasonable attorneys fees and costs, 73 Pa. Stat. 201-9.2. 107. The Pennsylvania Consumer Protection Law also authorizes an award to an aggrieved consumer of other appropriate relief, which in this case includes a full and complete accounting of her mortgage account by Litton, together with all adjustments necessary to reflect the terms of the 2000 modification agreement, effective January 2001, to remove all late charges, and any other fee or charge of any kind, apart from the agreed reduced principal, interest from January 2001, and actual payments of real estate taxes and insurance made by Litton since 20

January 2001. 108. The relief to be awarded the plaintiff can be summarized as follows: a. b. $1,000 statutory damages under the FDCPA, $2,000 for the twenty violations of the Pennsylvania debt collection statute, c. d. e. f. $1,000 statutory damages for violating RESPA, $2,367.54 in treble damages under Pennsylvania Act 6 of 1974, $ actual damages for emotional distress,

an injunction directing Litton to analyze [Plaintiff]s account retroactive to the date of the 2000 loan modification agreement, to reapply her payments properly under that agreement, to remove all fees or charges imposed by Litton or the previous servicer, including any attorneys fees or foreclosure costs, and to discuss with [Plaintiff] and establish a reasonable repayment schedule for any taxes and insurance advances made by Litton from 2002 to the present (which may include setting off the damage award to [Plaintiff] against these amounts due),

g.

and reasonable attorneys fees and costs, in an amount to be determined after submission of an appropriate motion by the Plaintiff.

Respectfully submitted,

______________________________ 21

ALAN M. WHITE Attorney for Plaintiff

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EXHIBIT LIST 1. May 21 2002 letter (faxed) with enclosures, from [Name] to Litton Loan Servicing, includes 2000 loan modification agreement. 2. May 9 2002 letter from Litton to [Spouse] and [Plaintiff], notice of servicing transfer. 3. Litton collection log, entries from 10/19/2001 through 2/17/2005 (8 pp.) 4. Litton letter to [Plaintiff] October 25, 2002. 5. [Plaintiff]s letter of August 10, 2004. 6. Littons letter dated August 18, 2004. 7. Litton internal memo dated August 24, 2004 requesting implementation of the Loan Modification. 8. Litton letter dated September 3, 2004, re adjustments to account. 9. Litton letter dated September 16, 2004 also confirming adjustment to payment amount. 10. Litton transaction history printed on 9/2/04 at 16:16 (military time.) 11. Litton letter dated September 22, 2004. 12. Litton monthly statement dated September 15, 2004. 13. Litton Letter dated 12/6/2004. 14. Litton monthly statement dated 12/15/2004. 15. Litton letter dated January 5, 2005. 16. Litton Notice of Default and Intent to Accelerate dated January 5, 2005. 17. Litton Act 91 Notice dated January 5, 2005. 18. January 13, 2005 letter to Litton from [Plaintiff]s attorney. 19. January 27, 2005 response to [Plaintiff] from Litton, including enclosed history. 20. February 4, 2005 Notice of Default from Litton.

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21. Litton monthly statement dated February 11, 2005. 22. Reinstatement quote generated 5/13/2005 from Litton. 23. Cashiers check for $1,400 payable to Litton dated 5/6/2005.

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