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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-10257
Non-Argument Calendar
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D.C. Docket No. 1:15-cv-02031-CAP
RHONDA J. CLARK,
a.k.a. Rhonda J. Fulgham,
Plaintiff-Appellant,
versus
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee,
NATIONSTAR MORTGAGE, LLC,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(November 8, 2016)
Before HULL, MARCUS, and WILSON, Circuit Judges.
PER CURIAM:
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Rhonda Clark, appearing pro se, appeals the district court’s dismissal of her
complaint against HSBC Bank USA, N.A. (“HSBC”) and Nationstar Mortgage,
LLC, (“Nationstar”), in which she alleged that the defendants wrongfully
foreclosed on her property, and violated Regulation X of the Real Estate
Settlement Procedures Act (“RESPA”). On appeal, Clark argues that the district
court erred in dismissing her Regulation X claim and in denying her leave to
amend, because at the time of the foreclosure sale, she had not received any
communication from her mortgage servicer as to the status of her request for loan
modification. Further, she contends that HSBC was her mortgage servicer, and
knew or should have known that she was under consideration for a loan
modification with her previous loan servicer, Bank of America, and thus,
Regulation X prevented HSBC from foreclosing on her property. After a careful
review of the records and the parties’ briefs, we affirm.
I. Standard of Review
We review a district court’s dismissal for failure to state a claim de novo.
See Hunnings v. Texaco, 29 F.3d 1480, 1484 (11th Cir. 1994). Although we
review the denial of a motion to amend a complaint for an abuse of discretion, we
review a denial due to futility de novo “because [the district court] is concluding
that as a matter of law an amended complaint would necessarily fail.” Fla.
Evergreen Foliage v. E.I. DuPont De Nemours & Co., 470 F.3d 1036, 1040 (11th
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Cir. 2006) (internal quotation marks omitted). Lastly, pro se pleadings are liberally
construed and are held to a less stringent standard than pleadings drafted by
attorneys. Bingham v. Thomas, 654 F.3d. 1171, 1175 (11th Cir. 2011). However,
where a pro se litigant fails to challenge an issue on appeal, the issue is deemed
abandoned. Irwin v. Hawk, 40 F.3d 347, 347 n.1 (11th Cir. 1994).
II. Discussion
Here, the district court did not err in dismissing Clark’s RESPA claim,
brought pursuant to Regulation X, for failure to state a claim because Clark did not
comply with the regulations to warrant a claim, and HSBC is not a loan servicer
and is therefore not subject to the regulation.
To survive a motion to dismiss, a plaintiff’s complaint must state a claim
that is plausible on its face and feature more than “unadorned, the-defendant-
unlawfully-harmed-me accusation[s].” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129
S. Ct. 1937, 1949 (2009). To satisfy the plausibility standard, the complaint must
demonstrate more than a sheer possibility that the defendants have acted
unlawfully. Id. We need not accept “legal conclusion[s] couched as a factual
allegation” or “[t]hreadbare recitals of the elements of a cause of action supported
by mere conclusory statements” as true. Id. Determining whether a complaint
survives a motion to dismiss is a “context-specific” task and the allegations must
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permit the court, based on “its judicial experience and common sense . . . to infer
more than the mere possibility of misconduct.” Id. at 679.
A. Clark Did Not Comply With Regulation’s Requirements
Although it appears that Clark does not challenge the district court’s
determination regarding her RESPA claim against Nationstar, as she does not
present any arguments against or mention Nationstar in her brief, to the extent that
she has preserved that claim, the district court did not err in its determination
because Clark’s loss mitigation application was untimely.
Under RESPA, a consumer protection statute that regulates the real estate
settlement process, the Consumer Financial Protection Bureau (“CFPB”) is tasked
with prescribing rules and regulations. See 12 U.S.C.S § 2617(a). RESPA’s
Regulation X, became effective January 10, 2014. See Mortgage Servicing Rules
Under the Real Estate Settlement Procedures Act (Regulation X), 78 Fed. Reg.
10696-01, 10696 (Feb. 14, 2013). This regulation places certain obligations on
mortgage servicers when a borrower submits a loss mitigation application and lays
out distinct procedures and rules for submitting such applications regarding
measures for assessing completeness, timelines and evaluation protocols. See
generally 12 C.F.R. § 1024.41.
Regarding completeness, the regulation establishes that when a servicer
receives an application 45 days prior to a foreclosure sale, the servicer is required
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to immediately ascertain whether the application is complete and notify the
borrower of this determination in writing within 5 days. § 1024.41(b). Generally,
an application is considered complete when the servicer “has received all the
information that the servicer requires from a borrower in evaluating applications
for the loss mitigation options available to the borrower.” § 1024.41(b)(1). If the
application is deemed incomplete, the servicer must “exercise reasonable diligence
in obtaining documents and information to complete [the] application,” informing
the borrower in the initial notification of “the additional documents and
information the borrower must submit to make the loss mitigation application
complete” and state “a reasonable date by which the borrower should submit the
documents and information.” § 1024.41(b)(1), (b)(2). If the borrower fails to
respond within the reasonable time provided and the application remains
incomplete, the servicer may, at its discretion, evaluate the incomplete application.
See § 1024.41(c)(2). However, if the borrower submits the requested documents or
no additional information is requested, the application is considered complete and
the servicer’s evaluation obligations under subsections (c) are triggered as long as
the application qualifies as complete—either in actuality or facially—more than 37
days before the foreclosure sale. See id. § 1024.41(c).
Pursuant to subsection (c), within 30 days of receiving the complete
application, the servicer must evaluate the application and determine all loss
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mitigation options available to the borrower and “[p]rovide the borrower with a
notice in writing stating the servicer’s determination of which loss mitigation
options, if any, it will offer to the borrower on behalf of the owner or assignee of
the mortgage.” Id. § 1024.41(c). Additionally, if the borrower submits a complete
application more than 37 days before a scheduled foreclosure sale, the servicer is
prohibited from proceeding with the foreclosure sale until the servicer either (a)
notifies the borrower of its decision regarding loss mitigation options, (b) the
borrower “rejects all loss mitigation options offered”, or (c) the “borrower fails to
perform under an agreement on a loss mitigation option.” See id. § 1024.41(g).
Notwithstanding these mandates, “[n]othing in § 1024.41 imposes a duty on a
servicer to provide any borrower with any specific loss mitigation option.” Id.
§ 1024.41(a).
Clark submitted loan modification paperwork on March 25, 2015, only 13
days before the foreclosure sale scheduled for April 7, 2015. Thus, Clark’s loan
modification application was submitted outside Regulation X’s prescribed
timelines for both complete and incomplete applications, and therefore, Nationstar
was not required to inform Clark of her mitigation options, if any, or stop the
foreclosure process. See 12 C.F.R. § 1024.41(b)(2)(i), (c)(1), (g).
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B. HSBC Is Not A Loan Servicer
Again, Regulation X’s requirements only apply to mortgage servicers, and
HSBC is not a servicer within the meaning of the regulation, thus the district court
did not err in dismissing her claim.
Under Regulation X, a “servicer” is the “person responsible for the servicing
of a federally related mortgage loan.” 12 C.F.R. § 1024.2. “Servicing” a loan is
defined as “receiving any scheduled periodic payments from a borrower pursuant
to the terms of any federally related mortgage loan . . . and making payments to the
owner of the loan or other third parties . . . as may be required pursuant to the
terms of the mortgage servicing loan documents or servicing contract.” See 12
C.F.R. § 1024.2; See generally § 1024.41.
According to Clark’s complaint and the attached exhibits, Nationstar acted
as Clark’s mortgage servicer on behalf of HSBC, who merely owned the security
deed. Nationstar was the party responsible for receiving payments on the
mortgage, informing Clark of her default, arranging her foreclosure solutions, and
taking her loan modification application into consideration. Thus, Regulation X’s
requirements do not apply to HSBC, and the district court properly dismissed
Clark’s Regulation X claim against HSBC.
Additionally, the district court did not err in concluding that any attempt by
Clark to amend her complaint to add an allegation that she submitted a previous
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loan modification request to Bank of America, who then failed to forward the
paperwork to Nationstar, would be futile. This allegation would still not state a
valid Regulation X claim against Nationstar. Clark’s Bank of America loan
modification application was submitted some time in 2011, before Regulation X
became effective on January 10, 2014. See Mortgage Servicing Rules Under the
Real Estate Settlement Procedures Act (Regulation X), 78 Fed. Reg. at 10696.
Nationstar has been her servicer the whole time Regulation X has been effective
and Clark has never alleged that she submitted a loan modification application to
Nationstar before the March 25, 2015 application referenced in her complaint
(which was submitted outside Regulation X’s 45 day timeframe). Thus, allowing
Clark to amend the complaint to assert her allegation that she submitted a previous
loan modification request to Bank of America, who then failed to forward the
paperwork to Nationstar, would have been futile. Accordingly, the district court
did not err in dismissing Clark’s RESPA claim against Nationstar and HSBC.
AFFIRMED.
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