IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ANDREA WRIGHT : CIVIL ACTION

 :

v. :

 :

LITTON LOAN SERVICING LP : NO. 05-02611-JF

ADJUDICATION

Fullam, Sr. J. April 4, 2006

This is an action by a homeowner against a mortgage

servicing company for alleged violations of the Real Estate

Settlement Procedures Act of 1974, 12 U.S.C. § 2605, the Fair

Debt Collection Practices Act, 41 Pa. Stat. §§ 101-605, and the

Pennsylvania Unfair Trade Practices and Consumer Protection Law,

73 Pa. Stat. § 201 et seq. There is remarkably little

disagreement as to the underlying facts, which can be summarized

as follows:

On November 10, 1998, plaintiff re-financed her home,

and executed a mortgage to Sunset Mortgage Company in the amount

of $33,600. The initial rate of interest was 13.875% per annum,

but it was an adjustable rate mortgage which permitted

adjustments to the interest rate at six-month intervals, based

upon a specified index. The documents provided that the interest

rate could never be less than 13.875%, and could be increased to

as much as 20.375%. The monthly payments were stated to be

$343.74 per month. Shortly after the mortgage was executed,

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 1 of 12
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Sunset assigned it to Ocwen Federal Bank, F.S.B., on November 13,

1998. 

Unable to keep up her mortgage payments, plaintiff

sought protection under Chapter 13 of the Bankruptcy Code, on

February 16, 2000. (E.D. Pa. Bankr. Court, 00-12022) Promptly

thereafter, on June 13, 2000, plaintiff filed suit in the

Philadelphia Court of Common Pleas to rescind the mortgage,

alleging a vast array of statutory violations on the part of the

mortgagee. That suit was settled on December 18, 2000, when the

parties executed, and the Bankruptcy Court approved, a settlement

agreement.

Under the terms of the settlement, the parties executed

a modification of the original mortgage, which included the

following provisions: (1) the principal amount of the mortgage

was stated to be $25,894; (2) the rate of interest was fixed at

8%; (3) the mortgage was to be amortized at the rate of $190.66

per month for a 30-year period; and (4) Ocwen paid plaintiff’s

counsel fees.

All went well for a couple of years, but, on April 29,

2002, the servicing of the mortgage was transferred to the

defendant, Litton Loan Servicing, LP, on behalf of the then-owner

of the mortgage, Wells Fargo Bank of Minnesota, acting as trustee

for a group of investors. Apparently, Ocwen was not made aware

of the fact that the original mortgage had been modified. For

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 2 of 12
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the next 29 months, from April 29, 2002 through September 2004,

the defendant did not adjust its records to reflect the

modification of the mortgage, and as a result continued to demand

monthly payments ranging from $343 to $666 or more. During that

period, plaintiff received numerous letters, account statements

and telephone calls from the defendant seeking to enforce the

mortgage according to its original terms. 

On May 21, 2002, plaintiff’s counsel faxed a letter to

the defendant pointing out the terms of the loan modification,

and enclosing another copy of the modification agreement, and

requesting the defendant to correct the account records. 

Although those documents were received on or about May 21, 2002,

the defendant did not correct its records until mid-September

2004. On October 25, 2002, defendant mailed an “adjustable rate

mortgage loan adjustment notice” which claimed that the principal

balance of the mortgage was $33,126.86, payable (with interest at

11.875%) at the rate of $343.74 per month. Similar letters were

mailed by defendant to plaintiff on April 30, 2003, October 24,

2003, and April 26, 2004 – all specifying that the mortgage bore

an adjustable interest rate as specified in the original note,

instead of the fixed 8% rate called for by the 2000 modification. 

Similar monthly billing statements were sent on April 14, 2004,

May 24, 2004, June 14, 2004, July 15, 2004, August 13, 2004 and

September 15, 2004.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 3 of 12
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In addition to various telephone complaints, plaintiff

wrote to the defendant on August 10, 2004, disputing the accuracy

of their records and requesting that the appropriate adjustments

be made. Defendant acknowledged receipt of the plaintiff’s

request on August 18, 2004 and, on September 3 and September 16,

2004, defendant wrote to plaintiff asserting that the records had

been updated to reflect the changes made in 2000. The September

16 letter stated that plaintiff’s monthly payment was in fact

$190.66, and that the next payment would be due on October 1,

2004. Nevertheless, defendant then wrote plaintiff a letter

dated September 22, 2004, asserting that there was a deficit in

her escrow account in the amount of $5,285.17, and stating that,

as of November 1, 2004, her monthly mortgage payment would

increase to $455.80.

Actually, the correct amount of the escrow account

deficit (assuming the accuracy of all of the insurance and tax

payments claimed to have been made by the defendant) should have

been $4,328.94, rather than the $5,285.17 claimed. This problem

was exacerbated when, in the September monthly statement which

specified that $190.66 would be due on October 1, defendant also

asserted (for the first time) that plaintiff owed “other fees

due” in the sum of $40,927.12.

On January 5, 2005, defendant sent to plaintiff two

different written notices: one demanded that she immediately pay

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three months of overdue monthly payments, totaling $2,127.96; the

other notice advised that defendant intended to accelerate the

mortgage so that the entire principal would be due immediately,

and included a threat of foreclosure.

On January 13, 2005, plaintiff’s counsel wrote to the

defendant, again disputing the amounts claimed by defendant, and

seeking an explanation. Remarkably, defendant did not reply to

that letter directly. Instead, defendant wrote to plaintiff in

person, stating that her lawyer was not authorized to represent

her, hence they were corresponding directly with her. The letter

included a totally incomprehensible purported explanation of the

discrepancies, and stated that the monthly payment had been

adjusted to $669.96 as of October 1, 2004. Defendant did not

even send a copy of that letter to plaintiff’s counsel.

On February 4, 2005, defendant sent plaintiff a notice

of default, specifying that the amount needed to cure the default

was $2,029.47. A week later, on February 11, 2005, defendant

sent plaintiff a monthly statement to the effect that, as of

March 1, 2005, her delinquency was $2,696.43. 

Defendant later sent plaintiff a notice to the effect

that, as of May 14, 2005, the amount necessary to reinstate the

mortgage would be $47,103.60. Included in this sum were the

“previous service expenses” of $40,575.12 (still not explained),

a BPO fee of $400, and an “escrow shortage” of $4,281.44.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 5 of 12
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Finally, on June 22, 2005, defendant commenced an

action in mortgage foreclosure in the Philadelphia Court of

Common Pleas. The foreclosure complaint stated that the interest

rate on the mortgage was adjustable and might increase, and that,

among other things, plaintiff owed an escrow overdraft in the

amount of $5,313.14. In the meantime, plaintiff had filed this

action, on June 7, 2005.

In addition to the foregoing chronology, I find the

following facts:

Plaintiff believed that she was required to pay the

real estate taxes on her residence and, for the most part, did

so. However, her tax bills were not always paid on a current

basis. She was unaware of the assignment of responsibility for

paying insurance premiums. Apparently, she did not maintain

insurance on the property. Thus, throughout the entire period in

question, it is probable that there was a deficit in some amount,

in the escrow fund. The evidence does not establish, however,

the correct amount of any escrow deficit, or the actual basis for

any of the various amounts claimed by defendant at various times. 

The evidence does make clear that plaintiff was never given

adequate, complete, and understandable explanations for

defendant’s claims.

The defendant has requested that I find as a fact that,

during the period when plaintiff was in Chapter 13 bankruptcy,

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 6 of 12
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Ocwen did not seek relief from the bankruptcy stay, and did not

take any action to collect its debt. Although the relevance of

this finding is not immediately apparent, I am happy to include

it among my factual findings. Defendant has also requested that

I find that the “monthly mortgage statements dated 9/15/04 and

12/15/04 and letters advising of adjustments in the interest rate

were automatically generated.” I also adopt that finding, since

it appears that defendant’s operations were indeed computerized. 

In fact, defendant’s sole witness at trial, whose job title is

“litigation processor” could provide no information other than

what was reflected in computer printouts. Unfortunately, these

computerized records were of extremely dubious probative value:

most of the entries were redacted on grounds of “attorney-client

privilege,” and the remaining entries were, for the most part,

not self-explanatory. 

Finally, I find that the plaintiff has suffered a great

deal of emotional distress, anxiety, fear of losing her home,

loss of sleep, and frustration as a result of the defendant’s

conduct, since at least May of 2002.

CONCLUSIONS OF LAW

The defendant Litton is a servicer of a federallyrelated mortgage loan within the Real Estate Settlement

Procedures Act (RESPA), 12 U.S.C. § 2605.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 7 of 12
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The May 21, 2002 letter to the defendant was a

“qualified written request” within the meaning of 12 U.S.C.

§ 2605(e)(1)(B), and the defendant failed to make appropriate

corrections within 60 days, and failed to notify plaintiff of any

corrections, in violation of 12 U.S.C. § 2605(e)(2).

Each of plaintiff’s and her attorney’s later written

requests for information about her account and for correction of

the mistakes therein constituted a “qualified written request,”

within the meaning of RESPA. Defendant’s contention that a

communication is not a “qualified written request” unless it

contains the number of the account is incorrect. The statute

only requires that the inquiry be sufficient to identify the

account. Adequate information was supplied.

Defendant exhibited a pattern or practice of

noncompliance with the servicing provisions of RESPA, in view of

the numerous violations established by the evidence. Plaintiff

is entitled to recover for “actual damages” plus statutory

damages of $1,000. 12 U.S.C. § 2605(f)(1).

I conclude that “actual damages” includes damages for

non-economic losses, such as pain, suffering and emotional

distress. In my view, the weight of authority, and the better

view, supports that interpretation of the statute. I adopt the

reasoning of Ploog v. HomeSide Lending, Inc., 209 F. Supp.2d 863

(N.D. Ill. 2002), Johnstone v. Bank of America, N.A., 173 F.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 8 of 12
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Supp.2d 809 (N.D. Ill. 2001), and Rawlings v. Dovenmuehle Mortg.,

Inc., 64 F. Supp.2d 1156 (M.D. Al. 1999). The only decision to

the contrary, Katz v. Dime Sav. Bank, F.S.B., 992 F. Supp. 250

(W.D.N.Y. 1997), was a pro se case, and appears to have been

decided primarily under state contract law.

I conclude that a fair and reasonable amount to be

awarded plaintiff for non-pecuniary damages is $25,000. Although

a more generous award would perhaps be justified, this defendant

was not the sole cause of plaintiff’s suffering.

The defendant also violated the Pennsylvania statute,

Act 6 of 1974, 41 Pa. Stat. §§ 101-604, in ways which do not

duplicate the federal violations. Defendant provided inaccurate

information as to the amount required to cure the alleged

default, as required by § 403, and demanded amounts not properly

due, under § 404 (including, at least, the $400 “BPO” fee, the

$70 inspection fee, and $319.18 in late charges which were the

responsibility of the defendant for having failed to implement

the loan modification). Under the statute, plaintiff is entitled

to treble damages, totaling $2,367.54.

I conclude that plaintiff is not entitled to damages

under the Pennsylvania Unfair Trade Practices and Consumer

Protection Law, 73 Pa. Stat. § 201 et seq., since that would

represent a duplication of recoveries. Plaintiff is entitled to

equitable relief, requiring the defendant to correct its records.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 9 of 12
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Under the Fair Debt Collection Practices Act (“FDCPA”),

15 U.S.C. § 1692 et seq., plaintiff is entitled to recover

statutory damages in the amount of $100 for each of the 20

written communications which constituted a separate violation of

the statute (four rate adjustment letters dated October 25, 2002,

April 30, 2003, October 24, 2003 and April 26, 2004; six monthly

statements mailed in 2004; and ten letters and notices (Exhibits

11-13, 15-17, 19-22)). The total damages under this statute

amount to $2,000.

In my view, the undisputed facts would warrant an award

of punitive damages, if authorized by statute. Inflating

plaintiff’s account by including the $40,575.12 for “other

expenses” was particularly egregious. The only attempted

explanation of this item is that it represents attorney’s fees

incurred by the Ocwen firm in the lawsuit which was settled in

2000 – obviously not the responsibility of the plaintiff. I

conclude, however, that punitive damages are not authorized by

any of the pertinent statutes. But plaintiff is entitled to

recover her attorney’s fees.

The damages to which plaintiff is entitled are: $1,000

under FDCPA, $2,000 for the 20 violations of the Pennsylvania

Debt Collections statute, $1,000 under RESPA, $2,367.54 under the

Pennsylvania Act 6 of 1974, for a total of statutory damages in

the amount of $6,367.54, plus $25,000 for emotional distress and

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 10 of 12
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related non-pecuniary losses, for a total damage award of

$31,367.54. In addition, plaintiff is entitled to recover

attorney’s fees, in an amount to be determined.

Case 2:05-cv-02611-JF Document 14 Filed 04/04/06 Page 11 of 12
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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ANDREA WRIGHT : CIVIL ACTION

 :

v. :

 :

LITTON LOAN SERVICING LP : NO. 05-02611-JF

ORDER

AND NOW, this 4th day of April 2006, IT IS ORDERED:

1. JUDGMENT is ENTERED in favor of the plaintiff,

Andrea Wright, and against the defendant, Litton Loan Servicing,

LP in the sum of $31,367.54.

2. Plaintiff may submit an application for counsel

fees within 10 days, and defendant may respond within 5 days

thereafter.

3. Defendant shall, within 30 days, provide plaintiff

and her counsel with an accurate statement of her mortgage

account, which reflects the 2000 modification agreement as of

January 2001, which does not include any late charges or any

other fee or charge of any kind, except for the agreed reduced

principal, interest from January 2001, and actual payments of

real estate taxes and insurance made by the defendant since

January 2001, less all amounts paid by plaintiff from January 1,

2001 to date.

BY THE COURT:

/s/ John P. Fullam 

John P. Fullam, Sr. J.

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