United States District Court, D. South Carolina, Aiken Division
Joe Lewis Thomas and Sarah A. Thomas, Plaintiffs,
Enterprise Bank of South Carolina, and Richard Creech, Defendants.
ORDER AND OPINION
matter is before the court pursuant to Defendants'
Enterprise Bank of South Carolina and Richard Creech, Senior
Vice President of Enterprise Bank of South Carolina
(collectively “Defendants”) Motion to Dismiss for
Failure to State a Claim. (ECF No. 6.) Plaintiffs Joe Lewis
Thomas and Sarah A. Thomas (collectively
“Plaintiffs”) filed a response in opposition to
Defendants' Motion (ECF No. 10), and Defendants replied
(ECF No. 11). For the reasons set forth below, the court
GRANTS Defendants' Motion to Dismiss
(ECF No. 6).
court has jurisdiction over this case pursuant to 28 U.S.C.
§§ 1331 and 1367. Federal courts are court of
limited jurisdiction. Under Section 1331, district courts
have original jurisdiction of all civil actions arising under
the Constitution, law, or treaties of the United States.
Plaintiffs have stated a claim based on a violation of the
Home Affordable Modification Program (“HAMP”), 12
U.S.C. §§ 5219, 5219a, 1715z-23, a federal statute,
thus federal question jurisdiction is proper.
courts have “. . . supplemental jurisdiction over all
 claims that are so related to claims in the action within
such original jurisdiction that they form part of the same
case or controversy. . . .” 28 U.S.C. § 1367(a).
In addition to Plaintiffs' HAMP claim, Plaintiffs have
also stated three state law causes of action: (1) fraud and
misrepresentation, (2) breach of contract, and (3)
conversion. (ECF No. 1 at ¶¶9-11.) These claims are
connected to Plaintiffs' HAMP claim, and they are part of
the same “case or controversy.” Therefore, the
court also has supplemental jurisdiction.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
August 5, 2009, Plaintiffs executed a Commercial Note and
Commercial Mortgage promising to pay Defendants $110, 000.00
with an interest rate of 8.5% per annum and making certain
property in Barnwell County, South Carolina collateral. (ECF
No. 6-1 at 2-3.) On February 29, 2012 Defendant Enterprise
Bank of South Carolina filed a Summons and Complaint against
Plaintiffs in a foreclosure action. (Id. at 3.) On
July 26, 2012, Plaintiffs paid Defendants $30, 000.00 for a
Partial Release of Mortgage Lien. (ECF No. 6-5.) A Decree of
Foreclosure was entered on September 7, 2012 (ECF No. 6-1 at
3), and the property was sold at auction for $60, 000.00 (ECF
No. 6-4 at 3). An Order for Deficiency Judgment was entered
on August 9, 2013, finding that Plaintiffs owed Defendants
$55, 187.91 (ECF No. 6-4 at 3, ECF No. 1 at
August 9, 2016, Plaintiffs filed this action alleging
Defendants violated the HAMP, engaged in fraud and
misrepresentation, breached their contract with Plaintiffs,
converted $24, 000.00 received from Plaintiffs, and are
liable for punitive damages. (ECF No. 1 at ¶¶
8-12.) Defendants filed this Motion to Dismiss for Failure to
State a Claim on November 15, 2016 (ECF No. 6), Plaintiffs
filed an opposition on December 2, 2016 (ECF No. 10), and
Defendants replied on December 8, 2016 (ECF No. 11).
12(b)(6) motion for failure to state a claim upon which
relief can be granted “challenges the legal sufficiency
of a complaint.” Francis v. Giacomelli, 588
F.3d 186, 192 (4th Cir. 2009) (citations omitted); see
also Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992) (“A motion to dismiss under Rule
12(b)(6) . . . does not resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.”). To be legally sufficient, a pleading must
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
12(b)(6) motion “should not be granted unless it
appears certain that the plaintiff can prove no set of facts
which would support its claim and would entitle it to
relief.” Mylan Labs, Inc. v. Matkari, 7 F.3d
1130, 1134 (4th Cir. 1993). When considering a rule 12(b)(6)
motion, the court should accept as true all well-pleaded
allegation and should view the complaint in a light most
favorable to the plaintiff. Ostrzenski v. Seigel,
177 F.3d 245, 251 (4th Cir. 1999). “To survive a motion
to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556).
Plaintiff's HAMP Claim
claim that “Defendants violated the provisions set
forth by HAMP, a federally created program to assist
distressed homeowners through various loan modification
programs, by refusing to work with Plaintiffs [in] the loan
modification process.” (ECF No. 1 at ¶8.) The HAMP
provides financial incentives to participating mortgage
servicers to modify the terms of eligible loans and aims to
financially assist homeowners who have defaulted on their
mortgages or who are in imminent risk of default. See
Marks v. Bank. Of Am., N.A., No.
03-:10-cv-08039-PHX-JAT, 2010 WL 2572988, at *5-6 (D. Ariz.
June 22, 2010) (describing the HAMP.) However, “nowhere
in the HAMP Guidelines, nor in the [legislation authorizing
the creation of HAMP], does it expressly provide for a
private right of action. Rather, Congressional intent
expressly indicates that compliance authority was delegated
solely to Freddie Mac.” Id. at *6; see
also Hoffman v. Bank of Am., N.A., No. C. 10-2171 SI.,
2010 WL 2635773, at *5 (N.D. Cal. June 20, 2010);
Gonzalez v. first Franklin Loan Servs., No.
1:09-cv-00941, 2010 WL 144862, at *18 (E.D. Cal. Jan. 11,
2010). Courts have consistently found that the “denial
of loan modification under HAMP [or other similar programs]
does not create a private cause of action.” Weber
v. Bank of Am., N.A., C/A No. 0:13-cv-01999-JFA, 2013 WL
4820446, at *4 (D.S.C. Sept. 10, 2013); Steffens v. Am.
Home Mortg. Servicing, Inc., C/A No. 6:10-1788-JMC, 2011
WL 901179, at *3 (D.S.C. Mar. 15, 2011); Dugger v. Bank
of Am., C/A No. 1:10-cv-00076, 2010 WL 3258383, at *2
(E.D. Mo. Aug. 19, 2010) (dismissing claims under Rule
12(b)(6) and stating that HAMP does not provide “a
private right of action to individual borrowers”);
Zeller v. Aurora Loan Servs., LLC, No.
3:10-cv-00044, 2010 WL 3219134, at *1 (W.D. Va. Aug. 10,
2010) (stating that Congress did not permit a private cause
of action under HAMP); Marks v. Bank of Am., N.A.,
No. 03:10-cv-08039-PHX- JAT, 2010 WL 2572988, at *5-7 (D.
Ariz. June 22, 2010) (holding that the HAMP Guidelines and
EESA do not provide a private cause of action).
consideration of the foregoing law, the court is constrained
to find that the allegations in the Complaint are
insufficient to establish claims based on Defendants'
alleged violations of the HAMP. Therefore, Plaintiffs'