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Shankin v. Harborview Mortgage Loan Trust Mortgage Loan Pass Through Certificate Series 2007-5

United States District Court, Third Circuit

July 31, 2013

DONNA SHANKIN, Plaintiff,
v.
HARBORVIEW MORTGAGE LOAN TRUST MORTGAGE LOAN PASS THROUGH CERTIFICATE SERIES 2007-5, THROUGH ITS TRUSTEE DEUTSCHE BANK NATIONAL TRUST COMPANY; AMERICAN BROKERS; and NORTHEASTERN FINANCIAL BROKERS, INC. Defendants.

MEMORANDUM OPINION

MITCHELL S. GOLDBERG, District Judge.

Plaintiff, Donna M. Shankin, alleges that the originating lenders of her home mortgage loan, Defendants Northeastern Financial Brokers, Inc. ("Northeastern Financial") and American Brokers Conduit ("ABC"), engaged in predatory lending and fraudulently induced her to enter into a mortgage loan transaction. Plaintiff also named as a Defendant Deutsche Bank Harborview Mortgage Loan Trust Mortgage Loan Pass Through Certificate Series 2007-5, through its Trustee, Deutsche Bank National Trust Company ("Deutsche Bank"), which purchased Plaintiff's loan from the originating lenders.

Plaintiff has raised causes of action for conspiracy, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Act (UTPCPL), fraud, promissory estoppel, slander of credit, violation of the Real Estate Settlement Procedure Act (RESPA), violation of the Equal Credit Opportunity Act (ECOA), negligence and gross negligence.

Presently before the Court is Deutsche Bank's motion to dismiss Plaintiff's complaint. For the reasons stated below, we will grant Defendant's motion.

I. Factual and Procedural History[1]

In April, 2007, Defendant ABC loaned Plaintiff $684, 000.00 as part of a residential mortgage refinance transaction, and Defendant Northeastern Financial issued a mortgage on the property. (Compl. ¶¶ 6-8.) Plaintiff alleges that the lenders promised her that the mortgage would be a fixed-rate, 30-year mortgage, and asked her to sign two documents in connection with the loan.[2] (Id. ¶¶ 34-35.) Plaintiff contends that:

- The lenders deliberately concealed the true terms of the mortgage, which actually carried an adjustable rate, a negative amortization feature allowing minimum payments lower than the interest that accrues each month, and a closing fee totaling $17, 875.00 to Defendant Northeastern Financial. (Id. ¶¶ 36-39.);
- The lenders forged her signature on the closing documents. (Id. ¶ 40.);
- Northeastern Financial obtained a fraudulent appraisal, which grossly inflated the purchase price of the property and allowed the lenders to sell a more expensive loan to Plaintiff. (Id. ¶¶ 48-57.); and
- The lenders fraudulently increased Plaintiff's income on the loan application so that she would qualify for a higher loan amount, and deliberately concealed the loan application from her. (Id. ¶¶ 58-67.)

None of the allegations set forth above pertain to Deutsche Bank. Plaintiff maintains, however, that Deutsche Bank is liable for this conduct because the loan was assigned to Deutsche Bank after the closing pursuant to a pre-existing agreement between ABC and Deutsche Bank. Alternatively, Plaintiff alleges that ABC and Northeastern Financial had an agency relationship with Deutsche Bank. (Id. ¶¶ 13-15, 17.)

Due to the terms of the loan, Plaintiff was unable to make payments in accordance with the negative amortization schedule, and after paying approximately $40, 000.00 towards the mortgage, the principal balance of the loan had increased above its initial principal balance. (Id. ¶¶ 44-45.) On or about January 29, 2010, Defendant Deutsche Bank filed a foreclosure complaint against Plaintiff, alleging that she was in default under the terms of the note and mortgage, and that over $800, 000.00 was needed for Plaintiff to cure default. (Id. ¶¶ 11, 45.) Plaintiff asserts that over the course of the last three years she has sent documents to the Defendants detailing the fraud perpetuated upon her and requesting a new mortgage loan, and has also submitted an application for loan modification, but the lenders have failed to work with her in good faith. (Id. ¶¶ 78-86.)

Plaintiff initiated this action on May 21, 2012, in the Bucks County Court of Common Pleas. Deutsche Bank removed the case to this Court on July 2, 2012. Plaintiff voluntarily dismissed Defendants ABC and Northeastern Financial on July 27, 2012, and on September 7, 2012, Deutsche Bank, the only remaining defendant, filed the motion to dismiss currently at issue. Deutsche Bank's principal argument is that Plaintiff's complaint fails to allege that it did anything more than purchase the loan. Deutsche Bank argues that Plaintiff has not pled sufficient facts regarding its involvement, and the complaint should be dismissed because Deutsche Bank was not involved in the origination of the loan. (Mot., ...


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