USDC Eastern PA: Prince v. BAC Home Loans Breach of Contract & RICO claim may proceed.

Congratulations to Pennsylvania attorney Joshua Thomas.

See order here: Prince v. BAC Home Loans Eastern PA 2017 08 Decision

A Federal judge agreed to hear charges of wire fraud and other charges from a homeowner who complains that he suffered loss and other damages in connection with a loan in which “Citimae” and others were involved. A modification was involved and we see “Citimae” referred to for the first time. This is the first time that a Federal Judge has refused to dismiss a wire fraud claim, as far we know it. Like Tom Cruise said in “The Firm” it isn’t sexy but it has teeth.


The case also illustrates the importance of procedural status, which can often trump the substantive law. Due process requires only that you be given an opportunity to be heard — not an opportunity to be heard on everything and not the opportunity to bring things up again that was previously ruled upon. Here we see some probable claims that could have been sustained but were the subject of earlier rulings against the homeowner.


We like this ruling because it shows the continued trend of loosening standards for homeowners to get relief — although the trial is a long way off in this case. Our surveys show that an increasing number of judges are no longer feeling bound by the economic emergency that caused so many judges to rule favorably for the banks lest the economy fail.

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In 1991, the Princes obtained a fixed-rate loan from Arbor National Mortgage, Inc.,
secured by real property in Yardley, Pennsylvania. The  Princes allege that their monthly payments began at about $2,700 and later fluctuated without explanation to as high as $4,800. Plaintiffs also allege that, on multiple occasions, they requested an accounting of payments but Defendants did not comply. Nevertheless, Plaintiffs assert, despite the fluctuations, they made timely mortgage
payments for almost twenty years.

In March 2010, Bank of America, which had acquired the Princes’ note through a de jure
merger with BAC Home Loans Servicing, L.P., and Citimae, Inc., filed a foreclosure action
against Plaintiffs in the Bucks County Court of Common Pleas.  Plaintiffs assert that, in 2010, their business went bankrupt and they incurred extensive medical bills after their daughter became ill.  They further assert they sought a loan modification agreement with Bank of America by submitting an application and supporting documents, and Defendants failed to respond for “almost six years.”

Finally, around September 1, 2015, Plaintiffs entered in a loan modification agreement with
Bank of America, which then dismissed the foreclosure action. In April 2016, the Princes brought this action, asserting they were harmed because they “agreed to a horrible loan modification” to stave off the impending foreclosure sale. Defendants moved to dismiss; Plaintiffs responded with an amended complaint. Defendants then filed a motion to dismiss the amended complaint. This Court granted in part and denied in part Defendants’ motion to dismiss the amended complaint, giving Plaintiffs leave to amend some of the claims.

In the Second Amended Complaint, Plaintiffs assert largely the same claims: (1) fraud in
violation of Regulation Z, 12 C.F.R. § 1024.41; (2) a violation of the Fair Debt Collection
Practices Act, 15 U.S.C. §§ 1692 et seq.; (3) a violation of the Pennsylvania Unfair Trade
Practices and Consumer Protection Law (UTPCPL), 73 Pa. C.S. § 201–1 et seq.; (4) breach of
contract; (5) wire fraud in violation of 18 U.S.C. § 1343; and (6) a violation of the Real Estate
Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq. Defendants have filed a motion to
dismiss the Second Amended Complaint. Def. Second Mot. to Dismiss (Doc. No. 23). Because
the Plaintiffs have failed to state a cause of action for which relief can be granted, despite
multiple attempts, Defendant’s motion to dismiss is granted as to all claims other than the breach
of contract claim.

The court dismissed claims for Fraud in Violation of Regulation Z, FDCPA violations and RESPA violations, while allowing the Prince’s to proceed with charges of Consumer Fraud under Pennsylvania Law, Breach of Contract and RICO.

One Response

  1. I found an interesting case from a couple years ago, the Bankruptcy Court was forced by appeal to completely void a mortgage.
    In re Fisher, 320 BR 52 – Dist. Court, ED Pennsylvania 2005,39,76,90,100,108,123,298,299,300,361,362,363

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