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Powell v. PNC Bank

United States District Court, E.D. Pennsylvania

September 11, 2019

ROGER A. POWELL, Plaintiff
PNC BANK, et al., Defendants



         Roger Powell's story is unfortunately familiar. In 2008, with the American economy experiencing a significant economic downturn, Mr. Powell found himself unemployed and unable to keep up with his mortgage payments. Despite his attempts to participate in federal programs aimed at helping homeowners avoid foreclosure, Mr. Powell's efforts fell short. Ultimately, his home was sold at a sheriffs sale. The question here, however, is not whether Mr. Powell's circumstances are regrettable. Instead, the Court must decide whether Mr. Powell's claims against his mortgage holder-PNC Bank-and mortgage servicer-Wells Fargo Bank-are actionable and adequately pleaded. Because the Court concludes that Mr. Powell does not have standing to bring his claims, the Court must dismiss the complaint.

         Factual Background[1]

         Roger Powell purchased his home in Harleysville, Pennsylvania in 2006. To finance the purchase, Mr. Powell took out a mortgage with PNC Bank, which in turn used Wells Fargo as an "Agent/Servicer" of the mortgage.

         In 2008, Mr. Powell's employer went out of business. Mr. Powell-a mechanical engineer-was unable to find work in his profession, and instead took a job in retail, along with a 30% pay cut. Around the same time, "serious medical circumstances" affected Mr. Powell, eventually causing him to lose his retail position. Mr. Powell continued to pay his mortgage until he eventually exhausted his savings. He also attempted-unsuccessfully-to sell his home, and he was unable to refinance his mortgage.

         At some point thereafter, Wells Fargo contacted Mr. Powell and provided him with an application for the Federal Making Home Affordable (MHA) program. To be eligible under the MHA program, Wells Fargo required Mr. Powell to miss two consecutive mortgage payments before applying. Mr. Powell complied and then submitted his application, which was accepted for evaluation. Mr. Powell next attempted to continue making mortgage payments to Wells Fargo. But Mr. Powell appears to have made only his monthly payment (as opposed to paying off his full outstanding balance), and so in January, 2015, Wells Fargo rejected the payment. Wells Fargo stated that "[b]ecause this payment [wa]s less than the total amount due reflected on [Mr. Powell's] reinstatement quote," Wells Fargo was "unable to apply these funds to [Mr. Powell's] account." Amended Compl., Ex. E.

         Other problems arose during Mr. Powell's MHA application process, including broad issues as well as issues specifically concerning Mr. Powell's application. First, Mr. Powell identified several universal issues with Wells Fargo's review of MHA applications. Mr. Powell observed "a great number of computation errors, 'lost' paperwork, apparent ineptitude, and delays[.]" Amended Compl. at 3. Further, Mr. Powell learned that Wells Fargo was using more stringent criteria to review MHA applicants when compared to the metrics used by PNC Bank. Wells Fargo only accepted applicants with a Debt-to-income ratio between 25% and 42%. PNC Bank, however, accepts applicants with a Debt-to-income ratio between 10% and 55%.

         Second, Mr. Powell's MHA application in particular encountered various issues, culminating in its rejection. Initially, Wells Fargo rejected Mr. Powell's MHA application after determining that his Debt-to-income ratio was below 25%. Mr. Powell notified Wells Fargo that its calculation was incorrect, however, and the bank eventually proceeded with Mr. Powell's application.

         Mr. Powell's MHA application was again denied-this time conclusively-in a November 30, 2016 letter.[2] Wells Fargo sent a letter dated December 13, 2016 denying an appeal, and Mr. Powell's loan was removed from review on December 22, 2016. See Amended Compl., Ex. J (describing appeal denial). Nonetheless, on December 18, 2016, Mr. Powell sent Wells Fargo a letter raising various grounds on which he sought to appeal the November 30, 2016 denial. See Amended Compl., Ex. H. On February 16, 2017, Wells Fargo wrote to Mr. Powell, responding to each individual argument supporting the appeal. See Amended Compl., Ex. J. Among other things, Wells Fargo reiterated that it had denied Mr. Powell's application for two reasons: (1) because Wells Fargo would not be able to reduce his "monthly principal and interest payment" by at least 10%, and (2) because Mr. Powell's account had a negative "Net Present Value." Id. On March 3, 2017, Mr. Powell responded to Wells Fargo's February 16, 2017 letter, reiterating and expanding on his previous criticisms of the review of his MHA application. See Amended Compl., Ex. F. On May 5, 2017, Wells Fargo answered Mr. Powell, sequentially addressing each of Mr. Powell's critiques. Id.

         Eventually, Mr. Powell's home was sold at sheriffs sale in Montgomery County, Pennsylvania.

         Legal Standard

         A pro se pleading must be "liberally construed." Estelle v. Gamble, 429 U.S. 97, 106 (1976); see also Bieros v. Nicola, 839 F.Supp. 332, 334 (E.D. Pa. 1993) ("[A] court must construe pro se complaints liberally[.]"). Pro se litigants are "held to 'less stringent standards' than trained counsel." Benckini v. Hawk, 654 F.Supp.2d 310, 316 n.l (E.D. Pa. 2009) (quoting Haines v, Kerner, 404 U.S. 519, 520 (1972)). The Court stands prepared to "apply the applicable law, irrespective of whether a. pro se litigant has mentioned it by name." Holley v. Dep't of Veteran Affairs, 165 F.3d 244, 247-48 (3d Cir. 1999) (citations omitted).

         A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Although Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), "to give the defendant fair notice of what the claim is and the grounds upon which it rests," the plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations, quotations, and alteration omitted).

         To survive a motion to dismiss, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555 (citation omitted). The question is not whether the claimant "will ultimately prevail on his . . . claim, but whether his complaint [is] sufficient to cross the federal court's threshold." Skinner v.Switzer,562 U.S. 521, 530 (2011) (citations and quotation omitted). Thus, assessment of the sufficiency of a complaint is "a context-dependent exercise" because "[s]ome claims require more ...

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