Opinion ID: 2658401
Heading Depth: 2
Heading Rank: 2

Heading: The Espelands Default On Their Loan

Text: Roughly three years later, in December 2008, the Espelands ceased making payments on their loan. IndyMac Bank contacted the Espelands and informed them that they were in default. The Espelands unsuccessfully attempted to negotiate with IndyMac Bank for a reprieve or loan modification. The record suggests that the Espelands were completely unable to make even a portion of their monthly payments; Peggy testified that after they ceased making payments, they were unable to save any money toward curing the default. In January 2009, a month after stopping payment, the Espelands sent a Qualified Written Request to IndyMac Bank under the Real Estate Settlement Procedures 6 “Pooling” is a “grouping of assets, such as mortgages, that serves as a basis for the issuing of securities.” THE A MERICAN H ERITAGE D ICTIONARY OF THE E NGLISH LANGUAGE 1370 (def’n 5) (5th ed. 2011). 7 “Securitizing” is defined as “convert[ing] (assets) into negotiable securities for resale in the financial market.” BLACK ’S LAW D ICTIONARY 1475 (9th ed. 2009). -5- 6885 Act (RESPA).8 They asked for: (1) all documents pertaining to the origination of the loan, including the loan history, fees, and the amount paid out of the escrow account; (2) an explanation of how all the payments were applied; and (3) the names and contact information for any investor or broker that purchased the securitized loan, as well as the agreements signed and the assignments made. IndyMac Bank responded by providing the Espelands with a payment history, the “requested disclosures, [and] copies of requested closing documents.” IndyMac Bank refused to provide any of the other information, stating that “[t]hese requests go well beyond what is required to be produced pursuant to a Qualified Written Request and will not be provided.” IndyMac Bank explained that “[g]enerally, we will not provide copies of internal documents and notations, guidelines or other information/materials supplied to us by third parties in connection with the organization of this loan.” The Espelands received the letter but never responded or followed up. Meanwhile, IndyMac Bank had been in distress since 2008 and was under control of the Office of Thrift Supervision, becoming IndyMac Federal Bank. The Office of Thrift Supervision appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, and in March 2009 the FDIC sold all of IndyMac Federal Bank’s assets to OneWest Bank.9 For the Espelands, this was only a transfer of the servicing rights for their loan because that was the only interest IndyMac Federal Bank retained. In other words, this was a transfer of the contractual right to perform a service for Deutsche Bank, not a transfer of property. MERS internally recorded the transfer of 8 12 U.S.C. § 2605(e) (2010). 9 See Failed Bank Information: Information for IndyMac, F.S.B., and IndyMac Federal Bank, F.S.B., Pasadena, CA, FEDERAL D EPOSIT INSURANCE CORPORATION , http://www.fdic.gov/bank/individual/failed/IndyMac.html (last updated Nov. 20, 2013). -6- 6885 servicing rights, and on April 15, 2009, IndyMac Federal Bank informed the Espelands that the new servicer of their loan was OneWest Bank.