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Gauci v. HSBC Bank USA, National Association

United States District Court, S.D. Mississippi, Southern Division

March 2, 2017

KAREN GAUCI, et al. PLAINTIFFS
v.
HSBC BANK USA, NATIONAL ASSOCIATION, et al. DEFENDANTS

          ORDER DENYING DEFENDANTS' MOTION TO DISMISS [3] PLAINTIFFS' COMPLAINT FOR DECLARATORY JUDGMENT

          HALIL SULEYMAN OZERDEN UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is Defendants HSBC Bank USA, N.A. as Trustee for SG Mortgage Securities Trust 2006-Opt2, Asset Backed Certificates Series (“HSBC”) and Ocwen Loan Servicing, LLC (“Ocwen”) (collectively “Defendants”) Motion to Dismiss [3] Plaintiffs Karen Gauci and Joseph Gauci's Complaint for Declaratory Judgment [1]. This Motion is fully briefed. For the reasons that follow, the Court finds that this Motion should denied.

         I. BACKGROUND

         This case arises out of a dispute over two Deeds of Trust executed by Plaintiffs Karen Gauci and Joseph Gauci (“Plaintiffs”) and two Promissory Notes executed by Karen Gauci related to real property located at 229 Klondyke Road, Long Beach, Mississippi (the “Property”). Compl. [1] at 1-3. In 2012, the Property went into foreclosure, and Defendant HSBC purchased the Property for $214, 2012. Plaintiffs filed a previous lawsuit over the Property which was resolved when the parties entered into a Confidential Settlement and Release Agreement and the case was dismissed in April 2014.[1] Id. at 2-4. Apparently, under the terms of the Settlement and Release Agreement, the loan agreements were modified and the original Deeds of Trust were reinstated. Id. at 4.

         On March 11, 2016, Plaintiffs filed their present Complaint[2] for Declaratory Judgment [1] against HSBC, the current holder of the Deeds of Trust, and Ocwen, the current “servicer/debt-collector, ” asking the Court, in part, to

. . . determine whether defendants have breached their contractual and statutory duties under the executed loan agreements, have breached their duty to act in good faith in all transactions, have breached their fiduciary duty in the handling of the escrow account, and have engaged in unfair and deceptive consumer practices under State and Federal law in any of the following respects:
(A) By inaccurately and excessively billing the Gaucis for $9, 337 worth of insurance that simply does not exist, see e.g. 12 U.S.C.A. § 2605(m); 12 U.S.C.A. § 2607;
(B) By charging late fees for checks received by Ocwen Loan Servicing before the agreed upon 15 day late period, but not cashing them until after the 15 day late period, see e.g. Miss. Code Ann. § 75-1-304 (requirement of good faith in all transactions), 15 U.S.C.A. § 1692f (requirement that a debt collector “not use unfair or unconscionable means to collect... a debt”), and 12 U.S.C.A § 5536;
(C) By charging late fees for failure to pay fees unauthorized by the loan agreement;
(D) By providing inaccurate and/or incomplete billing information in response to the Gaucis' requests for clarification of their bills;
(E) By mandating that Mr. Gauci sign a loan modification agreement when Mr. Gauci is not personally liable for the debt under the notes and deeds of trust;
(F) By putting the Gaucis['] property into default status when the Gaucis have consistently made on-time payments and have not breached any of the terms of the loan agreement;
(G) By charging unearned and unauthorized fees for default-related services, namely reinstatement of the loan;
(H) By mismanaging the funds in the escrow account.

Compl. [1] at 6-7. Plaintiffs also allege in Paragraph II of the Complaint that “this declaratory judgment complaint touches upon the Federal Real Estate Procedures Act, ” ...


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