SettlePou Obtains Appellate Victory for Mortgage Servicer

04.22.19

On April 15, 2019, the Fifth Court of Appeals in Dallas issued a Memorandum Opinion affirming the trial court’s summary judgment in favor of SettlePou’s clients, Caliber Home Loans, Inc. (“Caliber”), and U.S. Bank Trust, National Association, as Trustee for LSF9 Master Participation Trust (“U.S. Bank as Trustee”), in a suit brought by the borrower on a mortgage loan owned by U.S. Bank as Trustee and serviced by Caliber. The Appellant, Farrokh Ebrahimi, asserted claims for wrongful foreclosure, violation of the Texas Debt Collection Act (“TDCA”), and violation of the Texas Deceptive Trade Practices Act (“TDTPA”).

The Court of Appeals upheld the trial court’s summary judgment in favor of Caliber and U.S. Bank as Trustee on the wrongful foreclosure claim, as no foreclosure sale had occurred. The Appellant’s TDCA claim was also held to fail as a matter of law, as the Court of Appeals found that the summary judgment evidence established the Appellant was provided with all proper notices prior to foreclosure.

The Court of Appeals also affirmed the trial court’s summary judgment in favor of Caliber and U.S. Bank as Trustee on the Appellant’s claim for violation of the TDTPA after finding that the Appellant lacked standing because she did not qualify as a “consumer” as required to sue under the TDTPA. The Court of Appeals stated that a mortgagor qualifies as a “consumer” under the TDTPA if his or her primary objective in obtaining the loan was to acquire a good or service, and that good or service forms the basis of the complaint; however, a mortgagor challenging how an existing mortgage is serviced is not a consumer because the basis of the claim is the subsequent loan servicing rather than any goods or services that may have been acquired in the original transaction. Because the Appellant’s TDTPA claim was based on allegations related to the servicing of her mortgage loan and was not premised on any deceptive acts regarding the purchase of the property itself, the Court of Appeals held that the trial court correctly granted summary judgment in favor of Caliber and U.S. Bank as Trustee on Appellant’s TDTPA claim.

The case is Ebrahimi v. Caliber Home Loans, Inc., et al., No. 05-18-00456-CV (Tex. App.—Dallas Apr. 15, 2019) (mem. op.). For more information or if you have any questions, please contact Lauren Beverly at lbeverly@settlepou.com.