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Thomas A. Orman and Leslie E. Esposito v. Mortgageit

March 30, 2012

THOMAS A. ORMAN AND LESLIE E. ESPOSITO,
PLAINTIFFS,
v.
MORTGAGEIT, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Slomsky, J.

OPINION

I. INTRODUCTION

This case involves a dispute over a residential mortgage. On September 7, 2011, Plaintiffs Thomas Orman ("Plaintiff Orman") and Leslie Esposito ("Plaintiff Esposito") (collectively "Plaintiffs") filed a Verified Second Amended Complaint (Doc. No. 16) against Defendants CitiMortgage, Fannie Mae, John Does, and HSBC Bank USA.*fn1 The Verified Second Amended Complaint alleges violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1641, et seq., and the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2605, et seq., and the commission of fraud. Plaintiffs seek rescission and bifurcation of their loan and mortgage, quiet title on their property, and money damages.*fn2 Defendants CitiMortgage and Fannie Mae filed a Motion to Dismiss Plaintiffs' Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) and to Assess Costs of [a] Previously Dismissed Action.*fn3 (Doc. No. 5)

For reasons that follow, the Court will grant in part and deny in part Defendants' Motion to Dismiss Plaintiffs' Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) and to Assess Costs of [a] Previously Dismissed Action. (Doc. No. 5.)

II. PROCEDURAL HISTORY

On January 7, 2011, Plaintiff Orman filed the initial complaint in this Court against Defendants CitiMortgage and Fannie Mae. (Orman v. MortgageIT, et al., No. 11-139 (E.D. Pa. filed Jan. 7, 2011).) Plaintiff Orman subsequently filed several amended complaints alleging violations of the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2605, et seq., and the Truth in Lending Act ("TILA"), 15 U.S.C. § 1641, et seq., and seeking rescission of his mortgage. (Orman, Civ. No. 11-139, Doc. Nos. 10, 17.) On May 16, 2011, Plaintiff Orman filed a Notice of Voluntary Dismissal in Civil Action No. 11-139 pursuant to Local Rule 41(a). (Orman, Civ. No. 11-139, Doc. No. 41.) In an Order dated May 17, 2012, the Court dismissed Civil Action No. 11-139 without prejudice. (Orman, Civ. No. 11-139, Doc. No. 42.)

On May 16, 2011, Plaintiffs filed another Complaint against Defendants in the instant case.*fn4 (Doc. No. 1.) On September 7, 2011, Plaintiffs filed their Verified Second Amended Complaint. (Doc. No. 16.) This Complaint contains five counts. The counts and defendants named in each one are as follows:

* Count I, alleging violations of the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2605, et seq.:

(1) Defendant CitiMortgage

* Count II, alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1641, et seq., and Regulation Z, 12 C.F.R. § 226.39:

(1) Defendant CitiMortgage

(2) Defendant Fannie Mae

* Count III, alleging the commission of fraud:

(1) Defendant CitiMortgage

(2) Defendant Fannie Mae

* Count IV, seeking bifurcation of the Mortgage and Note:*fn5

(1) Defendant CitiMortgage

(2) Defendant Fannie Mae

* Count V, alleging a cause of action seeking to quiet title:

(1) Defendant CitiMortgage

(2) Defendant Fannie Mae*fn6

On June 28, 2011, Defendants filed the Motion to Dismiss Plaintiffs' Complaint and to Assess Costs of [a] Previously Dismissed Action.*fn7 (Doc. No. 5.) On July 11, 2011, Plaintiffs filed a Motion to Deny [the] Motion to Dismiss and Response. (Doc. No. 11.) On July 18, 2011, Defendants filed a Reply. (Doc. No. 9.) On October 7, 2012, the Court held a hearing on the Motion to Dismiss Plaintiffs' Complaint and to Assess Costs of [a] Previously Dismissed Action. (Doc. No. 5.) Accordingly, the Motion to Dismiss is now ripe for disposition.

III. SUMMARY OF FACTUAL HISTORY

On May 31, 2007, Plaintiffs received a loan (the "Loan") from Defendant MortgageIT in the amount of $140,000. (Doc. No. 16 ¶ 7; Doc. No. 16, Ex. A.) Plaintiffs executed a note (the "Note") evidencing the Loan and a mortgage (the "Mortgage") securing the Loan against their property (the "Property") located at 888 Woodlawn Ave., Phoenixville, PA 19460. (Doc. No. 16 ¶ 7; Doc. No. 16, Exs. A, B.) MortgageIT was the original lender on the Note and Mortgage (Doc. No. 16, Ex. B), and GMAC was named as the servicer of the Mortgage (Doc. No. 16, Ex. ...


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