Dwoskin et al v. Bank of America, N.A.

MOTION for Summary Judgment on State-Law Claims

D. Md.August 24, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION MATTHEW DWOSKIN and RANDI DWOSKIN, et al. on behalf of themselves and others similarly situated, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. Civil No.: 1:11-CV-01109-CCB BANK OF AMERICA’S MOTION FOR SUMMARY JUDGMENT ON STATE-LAW CLAIMS Defendant Bank of America, N.A. (“Bank of America”) moves under Federal Rule of Civil Procedure 56 for summary judgment on the Plaintiffs’ state-law claims for unjust enrichment (Count II of the Consolidated and Amended Class Action Complaint) and violations of California’s, Illinois’s, Maryland’s, New Mexico’s, New York’s, and Washington’s state unfair trade practices laws (Count III of the Consolidated and Amended Class Action Complaint). The grounds for this Motion are set forth in the contemporaneously-filed Memorandum of Law and are supported by the Court’s prior Orders and memorandum opinions, by the materials already in the record, and by the Exhibits to the Memorandum of Law. To avoid duplicative filings, Bank of America incorporates by reference the Index of Exhibits, Exhibits, Index to Appendix, and Appendix previous filed, ECF Nos. 127-2 through 127-20 and 132-1 through 132-6. WHEREFORE, Bank of America respectfully requests this Court enter an Order: A. Granting the Motion for Summary Judgment in its entirety; Case 1:11-cv-01109-CCB Document 153 Filed 08/24/16 Page 1 of 3 2 B. Dismissing Counts II and III of the Consolidated and Amended Class Action Complaint with prejudice; C. Dismissing Plaintiff’s request for entry of an injunction as moot; D. Entering judgment in Bank of America’s favor as to Counts II and III of the Consolidated and Amended Class Action Complaint and entering a final judgment in this action; and E. Granting any further relief that this Court deems just under the circumstances. Dated: August 24, 2016 Respectfully submitted, /s/ Bradley R. Kutrow Bradley R. Kutrow (NC Bar #13851) Admitted Pro Hac Vice District of Maryland Bar #03870 Angela H. Zimmern (NC Bar #36400) Admitted Pro Hac Vice District of Maryland Bar #96169 Brian P. Troutman (NC Bar #40131) Admitted Pro Hac Vice District of Maryland Bar #96171 MCGUIREWOODS LLP 201 North Tryon Street, Suite 3000 Charlotte, North Carolina 28202 Telephone: 704.343.2000 Facsimile: 704.343.2300 Jessica E. Morrison District of Maryland Bar #26824 MCGUIREWOODS LLP 7 Saint Paul Street, Suite 1000 Baltimore, Maryland 21202 Telephone: 410.659.4400 Facsimile: 410.659.4599 Attorneys for Defendant Bank of America, N.A. Case 1:11-cv-01109-CCB Document 153 Filed 08/24/16 Page 2 of 3 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on August 24, 2016, a copy of the foregoing Motion for Summary Judgment on Plaintiffs’ State-Law Claims, Memorandum of Law in Support, Exhibits, Appendix, and Proposed Order were sent via the CM/ECF system to all counsel of record. /s/ Bradley R. Kutrow Bradley R. Kutrow Case 1:11-cv-01109-CCB Document 153 Filed 08/24/16 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION MATTHEW DWOSKIN and RANDI DWOSKIN, et al. on behalf of themselves and others similarly situated, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. Civil No.: 1:11-CV-01109-CCB BANK OF AMERICA, N.A.’S MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ON STATE-LAW CLAIMS The Court’s ruling on Plaintiffs’ Homeowners Protection Act claim explicitly rejected the two key premises of their Consolidated Amended Complaint. See Mem. Op., ECF No. 138 (“Mem. Op.”).1 First, the Court held that Plaintiffs had failed to show that they paid any increased interest rates based on the post-closing purchase of mortgage insurance for their loans by Bank of America, N.A. (the “Bank”). Mem. Op. at 12, ECF No. 138. Instead, the Court held that the evidence established that the Bank “bought and paid for mortgage insurance on groups of loans after the loans were closed and funded without affecting the terms of any individual borrower’s loans.” Id. at 11. Second, the Court held that Plaintiffs’ contention that the purchase of mortgage insurance prevented them from refinancing under the post-financial crisis Home Affordable Refinance Program (“HARP”) was baseless, because none of their loans would have been HARP-eligible without the mortgage insurance the Bank acquired for them. Id. at 7. The Court thus rejected both of Plaintiffs’ theories of injury and damage. 1 Dwoskin v. Bank of Am., N.A., No.: 1:11-CV-01109-CCB, 2015 WL 5836785 (D. Md. Sept. 30, 2015). Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 1 of 17 2 It follows directly from the Court’s ruling that Plaintiffs’ state-law claims for unjust enrichment and violations of various state consumer protection statutes must also fail. Most fundamentally, these claims cannot proceed when Plaintiffs have failed to show any injury or damage. The Court has held twice now that Plaintiffs have not “demonstrated they suffered any injury” from having mortgage insurance placed on their loans. Mem. Op. on Mot. for Recons. 5, ECF No. 151. In fact, the Bank’s purchase of insurance actually benefited Plaintiffs, a number of whom obtained lower interest rates through HARP refinancing of their No Fee Mortgage Plus (“NFMP”) loans while retaining the insurance the Bank had obtained for them. More specifically, Plaintiffs cannot show any “unjust enrichment” because the Bank itself paid for the mortgage insurance on their NFMP loans and because their relationship with the Bank is governed by written contracts with terms that never changed and were never breached. Likewise, because injury is an element of Plaintiffs’ various state consumer fraud claims, those claims cannot proceed when Plaintiffs have shown no injury. Nor have Plaintiffs shown any actionable misrepresentation. In addition, the Court’s determination that the Bank did not violate the HPA, which Congress enacted to set definitive rules for mortgage insurance disclosures, also warrants reexamination of the Bank’s position that the HPA preempts Plaintiffs’ state-law clams. The Court initially assessed HPA preemption in the context of a complaint by Plaintiffs Randi and Matthew Dwoskin alleging a violation of the Maryland Consumer Protection Act, fraud, and negligent misrepresentation. At the motion to dismiss stage, necessarily accepting the Dwoskins’ allegations as true, the Court concluded that claims based on a “general duty” not to “lie or misrepresent information” were not preempted by the HPA even when the ostensible misrepresentation concerned mortgage insurance. Now, because the Court has determined that Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 2 of 17 3 the Bank did not violate any HPA disclosure requirement, any further attempt by Plaintiffs to impose liability through state-law claims by arguing for a different disclosure, or by penalizing nondisclosure, would trespass on territory already occupied by the HPA. As the Bank forecast in the parties’ Tenth Joint Status report, see Tenth Joint Status ¶¶ 8- 9, ECF No. 118, a ruling on the HPA claim would frame critical legal issues and advance the resolution of this case. From the evidentiary record and the legal conclusions in the Court’s September 30, 2015 Memorandum Opinion-reaffirmed in its July 22, 2016 Memorandum Opinion denying Plaintiffs’ Motion for Reconsideration-it now logically follows that summary judgment is warranted on Plaintiffs’ state-law unjust enrichment and consumer fraud claims. STATEMENT OF MATERIAL FACTS The evidence supporting the Bank’s present motion was previously filed in connection with its Motion for Summary Judgment on the Homeowners Protection Act Claim. ECF No. 127, 127-1-127-20. This evidence was summarized in the Court’s Memorandum Opinion. 2 The Court first reviewed the undisputed evidence concerning the development of the NFMP product and the Bank’s decision to begin acquiring post-closing mortgage insurance. Mem. Op. at 3-5, ECF No. 138. The Court noted that Plaintiffs claimed to have been “harmed in two ways: (1) by paying inflated interest rates to cover the costs of LPMI, and (2) by being precluded from refinancing, specifically through the federal government’s [HARP program], because of the mortgage insurance on their loans.” Id. at 6 (citing Am. Compl. ¶¶ 3, 37-38). Next, the Court reviewed the evidence, including individual Plaintiffs’ concessions that the NFMP loan was the best offer available to them and the Bank’s testimony that NFMP interest rates were determined through the same process used to set interest rates on standard 30-year 2 Additional deposition testimony submitted in support of this motion is included in Exhibit 1 to this Memorandum. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 3 of 17 4 conforming mortgages and that “the Bank did not increase interest rates on NFMP loans to offset the cost of insurance.” Id. at 6. The Court turned to Plaintiffs’ allegations concerning their difficulties refinancing during the first iteration of HARP, recognizing: that those difficulties stemmed from the mechanics of HARP 1; that Plaintiffs’ loans would not have even been eligible for HARP had the Bank not obtained mortgage insurance so that Fannie Mae and Freddie Mac could purchase them; that HARP 2 facilitated transfer of mortgage insurance policies; and that all Plaintiffs have now refinanced their loans below their original interest rate. Id. at 6-7. STANDARD OF REVIEW Under Rule 56, “summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Changzhou Kaidi Elec. Co. v. Okin Am., Inc., 102 F. Supp. 3d 740, 750 (D. Md. 2015) (emphasis in original) (quoting Fed. R. Civ. P. 56(a)). A dispute is genuine only if the jury could reasonably find for the nonmoving party, and a fact is material only if it could affect the outcome of the case. Id. at 750-51. ARGUMENT The same facts that warranted summary judgment on the HPA claim also establish that there is no basis for Plaintiffs’ remaining state-law claims, whether framed as “unjust enrichment” or as alleged violations of state consumer protection laws. First, Plaintiffs sustained no injury or damage and so they cannot show any “unjust enrichment.” Second, Plaintiffs have shown no unfair or deceptive conduct, because the Court has determined that the Bank’s placement of post-closing mortgage insurance did not violate the HPA and was consistent with its promise to “waive or pay” all fees associated with closing Plaintiffs’ NFMP loans. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 4 of 17 5 Moreover, Plaintiffs’ claims are barred by the HPA’s preemption provision because the allegations the Court thought might avoid preemption have been disproven. Ultimately, Plaintiff’s Consolidated Amended Complaint has been demonstrated to have been based entirely on mistaken assumptions and false premises. Accordingly, summary judgment should now be granted on Plaintiffs’ remaining state-law claims. I. PLAINTIFFS’ UNJUST ENRICHMENT CLAIM FAILS IN THE ABSENCE OF ANY INJURY OR DAMAGE. In their opposition to the Bank’s Motion to Dismiss, Plaintiffs argued that the Bank “ha[d] been unjustly enriched by charging higher interest rates to No Fee customers to trick them into unknowingly paying for LPMI through the deceptive inclusion of the LPMI on their No Fee loans.” Pls.’ Mem. of Law in Opp’n to Mot. to Dismiss at 17, ECF No. 75 (citing Am. Compl. ¶¶ 2,4, 30, 38, 49, 80-82). The evidence developed in discovery, however, has demonstrated that both Plaintiffs’ heated rhetoric and theory of injury have no basis in fact. Plaintiffs can show neither injury nor enrichment. See Mem. Op. on Mot. for Recons. at 5, ECF No. 151.3 Because Plaintiffs have failed to demonstrate a genuine dispute of material fact that the Bank was enriched at their expense-unjustly or otherwise-the Court should grant summary judgment in the Bank’s favor on Plaintiffs’ unjust enrichment claims. A. Plaintiffs’ Two Contentions of Injury Have Been Disproven. At the outset, Plaintiffs’ unjust enrichment claims fail because Plaintiffs cannot demonstrate the requisite injury to prove such claims. Though the law of unjust enrichment varies widely from state to state, with some states refusing to recognize a standalone cause of 3 Dwoskin v. Bank of Am., No.: 1:11-CV-01109-CCB, 2016 WL 3955932, at *2 (D. Md. July 22, 2016). Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 5 of 17 6 action at all,4 a common requirement under any state’s unjust enrichment law is that a plaintiff demonstrate an injury-that is, that a defendant has enriched itself at the expense of a plaintiff under inequitable circumstances. See Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., 373 F.3d 296, 306 (2d Cir. 2004) (citing Clark v. Daby, 751 N.Y.S.2d 622 (N.Y. App. Div. 2002)); Dahon N. Am., Inc. v. Hon, No. 2:11-cv-05835, 2012 WL 1413681, at *12 (C.D. Cal. Apr. 24, 2012); Kennedy v. Chase Home Fin., LLC, No. CV11-8109, 2012 WL 1132785, at *7 (D. Ariz. Apr. 4, 2012) (citing Cmty. Guardian Bank v. Hamilton, 898 P.2d 1005, 1008 (Ariz. Ct. App. 1995)); W.R. Townsend Contracting, Inc. v. Jensen Civ. Constr., Inc., 728 So. 2d 297, 303 (Fla. Dist. Ct. App. 1999); M & O Insulation Co. v. Harris Bank Naperville, 783 N.E.2d 635, 639 (Ill. App. Ct. 2002); Berry & Gould, P.A. v. Berry, 757 A.2d 108, 113 (Md. 2000); Ontiveros Insulation Co. v. Sanchez, 3 P.3d 695, 698 (N.M. Ct. App. 2000); Heldenfels Bros. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Dragt v. Dragt/DeTray, LLC, 161 P.3d 473, 482 (Wash. Ct. App. 2007). Here, Plaintiffs cite two purported injuries for their theory of unjust enrichment. First, Plaintiffs speculate that the Bank benefitted at their expense by charging higher interest rates on NFMP loans to pay for the costs of mortgage insurance. Am. Compl. ¶ 80. Second, Plaintiffs assert that the Bank’s purchase of LPMI was the sole causal factor for their inability to refinance. Thus, Plaintiffs claim that they were injured-and the Bank was unjustly enriched-by their inability to refinance and the Bank’s receipt of their monthly loan payments. Am. Compl. ¶ 82. Both contentions of injury have now been conclusively disproven. As the Court noted in granting the Bank’s Motion for Summary Judgment on Plaintiffs’ HPA claim, “[t]he evidence in 4 See, e.g., Vann v. Wells Fargo Bank, No. C 12-1181, 2012 WL 1910032, at *15 (N.D. Cal. May 24, 2012) (dismissing unjust enrichment claim because “unjust enrichment is not a separate cause of action in California”). Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 6 of 17 7 this case shows that, as the Bank argues, it bought and paid for mortgage insurance on groups of loans after the loans were closed and funded without affecting the terms of any individual borrower’s loans.” Mem. Op. at 11, ECF No. 138. Citing the evidence, the Court further held that there was no “genuine issue of material fact concerning whether [Plaintiffs] paid an increased interest rate to subsidize the cost of LPMI,” because the evidence proved “that the Bank did not increase interest rates on the loans to offset the cost of insurance.” Id. at 12-13, (citing Malouff Dep. Tr. 49-50, 102-03, 212; Dent Dep. Tr. 197-98; Mooney Dep. Tr. 65, 99; Bank’s Resps. to Interrogs. ¶ 16). The Court again confirmed these undisputed facts in denying Plaintiffs’ Motion for Reconsideration, noting that Plaintiffs had not “demonstrated they suffered any injury from having mortgage [insurance] placed on their loans . . . .” Mem. Op. on Mot. for Recons. at 5, ECF No. 151. Analyzing Plaintiffs’ “inability to refinance” theory, the Court likewise rejected Plaintiffs’ contention of injury. In particular, the Court rejected Plaintiffs’ false assertion that the presence of mortgage insurance on their loans precluded refinancing generally, and recognized that all Plaintiffs have now refinanced below their original interest rate using HARP 2, conventional refinancing, or a Veterans Administration loan. See Mem. Op. at 7, ECF No. 138. The Court further noted Plaintiffs’ admission that they would have been unable to refinance through HARP if the Bank had not purchased mortgage insurance for their loans. Id. Consequently, because no Plaintiff has made even a threshold showing of injury in this case, there is no genuine issue of material fact on Plaintiffs’ unjust enrichment claims. The Court should grant summary judgment in the Bank’s favor. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 7 of 17 8 B. Plaintiffs’ Notes are Contracts, Barring Any Unjust Enrichment Claim. Apart from failing to prove any injury, Plaintiffs’ claims fail for a separate and distinct reason: their claims are barred by the existence of valid, binding contracts (their notes and deeds of trust) that govern the subject matter of their claims. As this Court has stated, “an unjust enrichment claim cannot stand ‘when a contract exists between the parties concerning the same subject matter’ as the unjust enrichment claim.” Mem. Op. at 10, ECF No. 785 (citing Dwoskin v. Bank of Am., N.A., 850 F. Supp. 2d, 557, 573 (D. Md. 2012)6). Apart from their now-disproven allegations of higher interest rates and inability to refinance, the Amended Complaint suggests that the Bank’s “sale” of their loans could be the basis for an unjust enrichment claim. Plaintiffs allege that the Bank “was unjustly enriched by selling loans that it would not otherwise have sold because of its deceptive marketing of the NFMP program.” Am. Compl. ¶ 81. But Plaintiffs have failed to show how their agreement to take out mortgage loans whose material terms (i.e., original principal balance, interest rate, and term) never changed-and were fully disclosed to them at origination-could constitute an unjust enrichment to the Bank. See M. Augustson Dep. Tr. 70:1-18; L. Campbell Dep. Tr. 102:9-16; S. Decker Dep. Tr. 70:11-71:8; M. Dwoskin Dep. Tr. 112:11-14, 113:6-114:16; R. Kiel Dep. Tr. 60:4-12; K. Zipprich Dep. Tr. 60:6-11; K. Dills Dep. Tr. 43:17-21. Plaintiffs’ assertion is further at odds with their own admissions that they (1) never invoked the NFMP “Best Value Guarantee,” and (2) either independently determined or were advised by the Bank’s competitors that the NFMP program was the most favorable loan offer available to them. See Mem. Op. at 6, ECF No. 138 (citing Def.’s Reply Supp. Mot. Summ. J. 23, ECF No. 132; K. 5 Dwoskin v. Bank of Am., N.A., No.: 1:11-CV-01109-CCB, 2013 WL 427362, at *5 (D. Md. Jan. 31, 2013). 6 Dwoskin v. Bank of Am., N.A., 850 F. Supp. 2d, 557, 573 (D. Md. 2012). Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 8 of 17 9 Dills Dep. Tr. 35, Def.’s Mot. Summ. J. Ex. 10, ECF No. 127-12; Wertheimer Dep. Tr. 63, Def.’s Mot. Summ. J. Ex. 10; J. Woods Dep. Tr. 47, Def.’s Mot. Summ. J. Ex. 10; S. Woods Dep. 17-18, Def.’s Mot. Summ. J. Ex. 10; M. Dwoskin Dep. Tr. 105, Def.’s Mot. Summ. J. Ex. 10). As the Court pointedly observed, none of the Plaintiffs “claim that a different program would have offered them a better deal.” Id. at 13. To the extent Plaintiffs allege that the Bank was “unjustly” enriched because it eventually sold loans to Fannie Mae and Freddie Mac, their theory of “enrichment” is contradicted by the express terms of their loan documents. The Bank’s right to sell NFMP loans is expressly contemplated and allowed by the terms of every Plaintiff’s mortgage or deed of trust. In relevant part, each individual mortgage and deed of trust stated that “[t]he Note, or an interest in the Note, together with [the Mortgage or Deed of Trust], may be sold one or more times. [The borrower] might not receive any prior notice of these sales.” See Bank’s Mot. to Dismiss, Answer and Aff. Defenses, Exs. 1B, 2B, 3B, 4B, 5B, 6B, 7B, 8B, 9B, 10B, 11B, 12B, and 13B, ECF Nos. 67-2- 67-14. Plaintiffs cannot seek to impose quasi-contractual liability when the action complained of is expressly contemplated and allowed by the parties’ agreements. Mem. Op. at 10, ECF No. 78. Only one Plaintiff-Matthew Dwoskin-is alleged to have seen any statement of any kind regarding the Bank’s original intention to keep “all or most” NFMP loans.7 M. Dwoskin Dep. Tr. 132:11-136:16. Yet Dwoskin did not even read the report of that statement until late 2008, well over a year after it was published. And Dwoskin has shown no injury relating to that statement. In sum, although the Court earlier denied the Bank’s motion to dismiss Plaintiffs’ unjust enrichment claims, it expressly did so without prejudice (Mem. Op. 11, ECF No. 78) and 7 As the Court’s Memorandum Opinion noted, the Bank’s plan changed as the financial crisis began in 2007. Mem. Op. at 3, ECF No. 138. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 9 of 17 10 declined to determine at that time whether Plaintiffs’ claims based on the Bank’s purchase of mortgage insurance were precluded by the contracts governing Plaintiffs’ relationships with the Bank. Now that the evidence has shown that the Bank’s actions (1) caused no harm to Plaintiffs or “unjust” enrichment to the Bank and (2) were expressly allowed by the parties’ contracts, the Court should grant summary judgment to the Bank on Plaintiffs’ unjust enrichment claims. II. PLAINTIFFS’ CONSUMER FRAUD CLAIMS FAIL IN THE ABSENCE OF ANY INJURY, UNFAIRNESS, OR DECEPTION. Although there are many variations in the required elements and defenses of the six different state consumer protection act claims pled by Plaintiffs, all those claims at a minimum have “the same basic elements of (1) a consumer fraud or deception (2) that injured the Plaintiff.” Mem. Op. at 9, ECF No. 78. Because Plaintiffs have now failed to show that they were injured by the Bank’s purchase of mortgage insurance, their claims should fail on that basis.8 See id. at n.3 (citing Kwikset Corp. v. Super. Ct., 246 P.3d 877 (Cal. 2011), and Oliveira 8 See, e.g., Mem. Op. at 17, ECF No. 23 (“[U]nder the MCPA, an individual can only bring a claim if he can ‘establish the nature of the actual injury or loss that he or she allegedly sustained as a result of the prohibited practice.’” (citing Lloyd v. General Motors Corp., 397 Md. 108, 148, 916 A.2d 257, 280 (2007))); see also Serna v. Bank of Am., N.A., No. CV 11-10598, 2012 WL 2030705, *5 (C.D. Cal. June 4, 2012) (holding that to state a claim for violation of California’s Unfair Competition Law, “a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim”); Sefton v. Toyota Motor Sales U.S.A., Inc., No. 09 C 3787, 2010 WL 1506709, at *4 (N.D. Ill. Apr. 14, 2010) (stating that a violation of the Illinois Consumer Fraud Act requires a showing of “(1) a deceptive act or practice by the defendant, (2) the defendant’s intent that the plaintiff rely on the deception, (3) the occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception” (citing Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d 801, 850 (Ill. 2005)); Stutman v. Chem. Bank, 731 N.E.2d 608, 611 (N.Y. 2000) (stating that a plaintiff bringing a claim for violation of the New York Consumer Protection from Deceptive Acts and Practices Act must prove “first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act”); Walker v. Wenatchee Valley Truck & Auto Outlet, Inc., 229 P.3d 871, 876 (Wash. Ct. App. 2010) (holding that plaintiffs seeking to recover for violations of the Washington Consumer Protection Act must show “(1) an unfair or deceptive Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 10 of 17 11 v. Amoco Oil Co., 776 N.E.2d 151, 160 (Ill. 2002), for the proposition that damages are a required element of Plaintiffs’ state consumer protection act claims). Additionally, Plaintiffs’ claims fail because the facts of the NFMP loan program cannot support the requisite showing of unfairness or deception. The Court, accepting Plaintiffs’ allegations as true in ruling on the Bank’s motion to dismiss the Amended Complaint, declined to dismiss Plaintiffs’ claims because Plaintiffs “plausibly assert[ed] that the Bank misled them in the marketing, approval, and administration of their mortgages to their financial detriment.” Mem. Op. at 9, ECF No. 78. The Court further stated that Plaintiffs had “sufficiently allege[d] that they were injured by the Bank’s misrepresentations by unwittingly obtaining mortgages that were burdened by LPMI and by subsidizing the cost of the LPMI with higher interest rates paid to the Bank.” Id. at 9. Those allegations have now been disproven by the evidence. Rather than show any deception by the Bank, the evidence has confirmed that the Bank did exactly as it promised-the Bank waived or paid the fees that it agreed to waive or pay in marketing the NFMP program. See Malouff Dep. Tr. 65:14-24; Mooney Dep. Tr. 20:12-21, 25:12-19, 26:3-22. When the Bank placed insurance on Plaintiffs’ loans in the form of a post-closing credit enhancement, it did so at its own expense and without affecting the terms of, or decision to extend credit on, any Plaintiff’s loan. Bank’s Resps. to Interrogs. 19-21, 29; Malouff Dep. Tr. 150:17-23, 164:10- 165:10, 170:2-14; Dent Dep. Tr. 73:22-74:20; Mooney Dep. Tr. 94:7-95:1. Moreover, there is no evidence that the Bank made any representation to Plaintiffs that their loans would never be act or practice (2) in trade or commerce (3) that affects the public interest, (4) injury to the plaintiff, and (5) a causal link between the unfair or deceptive act and the injury”). To the extent New Mexico’s statute, N.M. Stat. Ann. § 57-12-10(B), does not expressly state that injury or damages is an element, Campbell cannot establish any false or misleading representation regarding mortgage insurance because her loan closed in June 2007, well before the Bank began acquiring bulk insurance as a post-closing credit enhancement. Mem. Op. at 4, ECF No. 138. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 11 of 17 12 covered by mortgage insurance.9 Instead, the evidence has shown that (1) the Bank kept its promise that no mortgage insurance would be “required” on Plaintiffs’ loans and (2) Plaintiffs would not pay for mortgage insurance. See L. Campbell Dep. Tr. 52:12-14, Mooney Dep. Tr. 72:8-74:11; Pls.’ Opp’n Ex. D (BANADWOSKIN-00007566-67), ECF No. 130-5; Ex. F (Dent Dep. Ex. 357, BANA-DWOSKIN-000034740-50), ECF No. 130-7; see also Mem. Op. at 12, ECF No. 138 (“If the plaintiffs never paid for the insurance, which in this case would have been in the form of a higher interest rate, and if no individual loan was conditioned on being able to obtain insurance, mortgage insurance was not ‘required’ within the meaning of the HPA.”). Both of those NFMP program features were maintained throughout the life of the program. Nor was the NFMP program unfair to any Plaintiff. As the Court has held, the Bank’s purchase of a post-closing credit enhancement in the form of mortgage insurance caused no harm to any Plaintiff. Mem. Op. on Mot. for Recons. at 5, ECF No. 151. Quite the opposite is true: the Bank’s actions actually benefitted numerous Plaintiffs in this case by making their loans eligible for HARP 2 refinancing that would have been otherwise unavailable to them. Mem. Op. at 7-8, ECF No. 138. Plaintiffs who refinanced under HARP 2-Augustson, the Dwoskins, the Deckers, Prosser, Wertheimer, the Woods, and Zipprich-were able to do so only because of the insurance that the Bank purchased. See M. Augustson Dep. Tr. 160:7-25. These Plaintiffs continue to enjoy the benefit of the Bank’s post-closing credit enhancements on their new loans. Accordingly, because there was nothing deceptive and unfair about the NFMP loan program and because no Plaintiff was harmed by the Bank’s purchase of mortgage insurance on 9 Plaintiff Donna Cuadra, for example, saw no marketing materials, Def.’s Mem. Ex. 9 (Resp. to Interrog. 6), EFC No. 127-11, and testified that no one at the Bank made any representations to her concerning the no-fee features of her loan and that she was not aware that her loan was part of the NFMP program until after closing, D. Cuadra Dep. Tr. 43:3-9, 47:8-25. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 12 of 17 13 NFMP loans, the Court should grant summary judgment in the Bank’s favor on Plaintiffs’ state consumer protection act claims.10 III. PLAINTIFFS’ STATE-LAW CLAIMS DO NOT REST ON ANY “GENERAL DUTY” BUT “RELATE TO” MORTGAGE INSURANCE DISCLOSURE AND SO ARE PREEEMPTED BY THE HPA. Finally, the Court’s decision granting summary judgment on Plaintiffs’ HPA claim warrants a reexamination of preemption under the HPA. In 12 U.S.C. § 4908, the HPA preempts state law claims “relating to” its mortgage insurance disclosure requirements. In its prior decision declining to find that Plaintiffs’ state-law claims were preempted by the HPA, the Court-assuming all of Plaintiffs’ allegations to be true for the purposes of the Bank’s motions to dismiss-premised its conclusion on a “general duty” not to say one thing and do another. The Court construed Plaintiffs’ claims as seeking to enforce a general duty “not to mislead or deceive customers.” Mem. Op. at 14, ECF No. 23. Thus, it held that the Bank had not demonstrated that Congress intended to displace a “field” of state laws concerning fraudulent misrepresentations regarding mortgage products when it passed the HPA. Mem. Op. at 6, ECF No. 78. Now, however, the evidence has shown beyond dispute that the basis on which the Court held that Plaintiffs’ state-law claims were not preempted at the motion to dismiss stage-false, deceptive, or misleading statements relied on by Plaintiffs to their financial detriment-does not exist. Under the Court’s prior preemption analysis, Plaintiffs would have to prove that the Bank breached a “general duty” not to make fraudulent misrepresentations that harmed Plaintiffs to 10 The Bank reserves, and does not waive, the additional arguments and defenses that arise under the varying, separate state consumer protection statutes, such as the individual Plaintiffs’ lack of reliance. However, given the Court’s determination that Plaintiffs have failed to show any injury, damages or “financial detriment,” that failure is advanced in this motion for summary judgment to expedite disposition of these claims consistent with Federal Rule of Civil Procedure 1. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 13 of 17 14 avoid preemption of their state-law claims. See Mem. Op. at 13, ECF No. 23; see also Scott v. GMAC Mortg., No. 3:10cv00024, 2010 WL 3340518, at *5 (W.D. Va. Aug. 25, 2010) (denying motion to dismiss fraud claim based on HPA preemption because fraud claims require “evidence of an affirmative misrepresentation of material fact,” whereas HPA-governed claims “depend on evidence of failure to disclose”). But Plaintiffs have failed to come forward with evidence of any fraudulent misrepresentations on which they detrimentally relied in closing their NFMP loans. Cf. Mem. Op. at 12-13, ECF No.138 (“None of the evidence the plaintiffs cite creates a genuine issue of material fact concerning whether they paid an increased interest rate to subsidize the cost of LPMI. . . . Furthermore, none of the plaintiffs invoked the Bank’s ‘Best Value Guarantee’ or claim that a different program would have offered them a better deal.”). Therefore, all that remains of Plaintiffs’ state-law claims are allegations that the Bank placed mortgage insurance on Plaintiffs’ loans and did not disclose its insurance purchase to NFMP borrowers. Plaintiffs’ unjust enrichment claim, for example, is based on the alleged “hidden LPMI” on Plaintiffs’ loans that the Bank failed to disclose. Am. Compl. ¶¶ 81-82. Likewise, Plaintiffs’ state consumer protection act claims are premised on misrepresentations or non-disclosure about mortgage insurance on their NFMP loans. Am. Compl. ¶ 88. In essence, the remaining questions posed by Plaintiffs’ theories of liability are (1) whether the Bank had any duty to disclose information related to its insurance purchases; and (2) if such a duty exists, what it should have disclosed. Both of these questions fall squarely within-and thus are preempted by-the disclosure regime that Congress has established in the HPA. As the Court has already determined, the Bank’s purchase of mortgage insurance post- closing, at its own expense, and with no effect on any Plaintiff’s loan terms, did not violate the HPA. Allowing Plaintiffs’ non-disclosure theory of liability to proceed under the guise of state- Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 14 of 17 15 law claims would thwart Congress’s intent to establish uniform national disclosure standards and to preempt inconsistent state-law treatment. See Rubenstein v. Bank of Am., No. 1:12-cv-4025 (N.D. Ill. Mar. 29, 2012) (dismissing plaintiff’s state-law claims regarding the NFMP program as preempted, because “state common law and statutory remedies that would impose different standards of disclosure and liabilities for improper disclosure are inconsistent with [the HPA’s] intent, and are therefore preempted by the HPA”); see also Gregor v. Aurora Bank FSB, 26 F. Supp. 3d 146, 154 (D.R.I. Jun. 18, 2014) (finding claims preempted by the HPA because the “state law claims, if permitted to go forward, would function as an alternate enforcement mechanism, echoing the enforcement provisions of the HPA, and frustrating Congress’ objective of a uniform regulatory scheme”); Augustson v. Bank of Am., 864 F. Supp. 2d 422, 437 (E.D.N.C. 2012) (“State law claims sounding in tort but which are based on the allegedly wrongful denial . . . . of benefits under [a federally regulated program or plan subject to broad preemption] are preempted. Notably, plaintiffs’ fraud and negligent misrepresentation claims depend on the existence of HPA-covered mortgages, and the court would have to review their mortgages and disclosures relating to private mortgage insurance to evaluate their claims.”) (internal citations omitted); Fellows v. CitiMortgage, Inc., 710 F. Supp. 2d 385, 402 (S.D.N.Y. 2010) (“Permitting Fellows’ DTPA claim to proceed would frustrate Congress’s objective of creating of a uniform national standard for PMI cancellation and disclosure. . . . Further, allowing mortgagors to use state consumer protection laws to impose requirements for PMI cancellation and disclosure that are inconsistent with the HPA could lead to the creation of a ‘patchwork’ of PMI-related requirements among the states.”). With the benefit of its HPA summary judgment ruling, the Court should now conclude that Plaintiffs’ state-law claims are disclosure-related and thus preempted by the HPA. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 15 of 17 16 CONCLUSION For the reasons stated above, the Court should grant summary judgment in favor of Defendant Bank of America on Plaintiffs’ remaining state-law claims for unjust enrichment and violations of California’s, Illinois’s, Maryland’s, New Mexico’s, New York’s, and Washington’s consumer protection acts, and dismiss this action with prejudice. Dated: August 24, 2016 Respectfully submitted, By: /s/ Bradley R. Kutrow Bradley R. Kutrow (NC Bar #13851) Admitted Pro Hac Vice District of Maryland Bar #03870 Angela H. Zimmern (NC Bar #36400) Admitted Pro Hac Vice District of Maryland Bar #96169 Brian P. Troutman (NC Bar #40131) Admitted Pro Hac Vice District of Maryland Bar #96171 MCGUIREWOODS LLP 201 North Tryon Street, Suite 3000 Charlotte, North Carolina 28202 Telephone: 704.343.2000 Facsimile: 704.343.2300 Jessica E. Morrison District of Maryland Bar #26824 MCGUIREWOODS LLP 7 Saint Paul Street, Suite 1000 Baltimore, Maryland 21202 Telephone: 410.659.4400 Facsimile: 410.659.4599 Attorneys for Defendant Bank of America, N.A. Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 16 of 17 17 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on August 24, 2016, a copy of the foregoing BANK OF AMERICA, N.A.’S MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ON STATE-LAW CLAIMS was sent via the CM/ECF system to all counsel of record. /s/ Bradley R. Kutrow Bradley R. Kutrow Case 1:11-cv-01109-CCB Document 153-1 Filed 08/24/16 Page 17 of 17 EXHIBIT 1 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 1 of 25 AUGUSTSON Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 2 of 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 3 of 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 4 of 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 5 of 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 6 of 25 CAMPBELL Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 7 of 25 ·1· · · · · · IN THE UNITED STATES DISTRICT COURT · · · · · · · · ·FOR THE DISTRICT OF MARYLAND ·2· · · · · · · · · · BALTIMORE DIVISION ·3· ·MATTHEW DWOSKIN AND RANDI · · ·DWOSKIN, SEAN DECKER, AND ·4· ·JENNIFER DECKER, MARK AUGUSTON, · · ·TERESA D. BUTLER, LINDA CAMPBELL, ·5· ·DONNA L. CUADRA AND ALFRED W. · · ·FIGLEY, KELLY D. DILLS AND STEFANI ·6· ·L. DILLS, ROBERT S. KIEL AND JEANNE · · ·B. KIEL, JOSEPH PROSSER, MICHAEL ·7· ·WALSH AND JENNIFER WALSH, PHILLIP · · ·WERTHEIMER, JOANN WOODS AND ·8· ·SHAWN WOODS, and KERRIE ZIPPRICH, · · ·on behalf of themselves and others similarly ·9· ·situated, 10· · · · · · · · ·Plaintiffs, 11· · · · vs.· · · · · · · ·CASE NO.: 11:CV:01109-CCB 12· ·BANK OF AMERICA, N.A. 13 · · · · · · · · · ·Defendant. 14 15 · · ·DEPOSITION OF:· · LINDA CAMPBELL 16 · · ·DATE:· · · · · · ·July 19, 2013 17 · · ·TIME:· · · · · · ·1:00 p.m. 18 · · ·LOCATION:· · · · ·11 North Market Street 19· · · · · · · · · · ·Asheville, NC 20· ·TAKEN BY:· · · · ·Counsel for the Defendant 21· ·REPORTED BY:· · · SHARON G. HARDOON, · · · · · · · · · · · ·Court Reporter, Notary Public 22 23 24 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 8 of 25 Page 50 ·1· ·BY MR. TROUTMAN: ·2· · · · Q.· I am handing you what has been marked for ·3· ·identification, Exhibit 126.· Please take a ·4· ·minute to familiarize yourself with it. ·5· · · · A.· I've got to get my glasses.· I guess it ·6· ·did have Spanish on the other side.· Whoever ·7· ·Xeroxed it, Xeroxed the Spanish side on mine. ·8· · · · · · Yeah, the first page is okay, but my ·9· ·second page is all in Spanish. 10· · · · Q.· Yeah.· Check -- Pages 2 and 3 I belive 11· ·are in Spanish.· That's the way it was produced 12· ·to us.· And Page 4 -- 13· · · · · · MR. WHITE:· Page 4 is in English. 14· · · · · · THE WITNESS:· Oh, okay. 15· ·BY MR. TROUTMAN: 16· · · · Q.· Just let me know what you're ready. 17· · · · A.· I'm ready. 18· · · · Q.· Is this the advertisement that you were 19· ·mentioning moments ago? 20· · · · A.· Can I see the advertisement and compare 21· ·it?· I think it is, but I would like to see it. 22· · · · · · MR. WHITE:· That is what was 23· ·produced. 24· · · · · · THE WITNESS:· Okay. 25· ·BY MR. TROUTMAN: Page 51 ·1· · · · Q.· I'll just note, Miss Campbell, for the ·2· ·record, do you see at the bottom, there's a few ·3· ·letters and a number that says CAM, and then some ·4· ·zeros and then 104 on the first page? ·5· · · · A.· Yeah. ·6· · · · Q.· This is -- pardon me, this is something, ·7· ·right, that was produced by you in this ·8· ·litigation? ·9· · · · A.· I was just reading -- 10· · · · Q.· Sure. 11· · · · A.· -- the other little things here.· I'm 12· ·making sure that all the parts were -- yes. 13· · · · Q.· Do you recognize this as the 14· ·advertisement that we were just talking about? 15· · · · A.· Yes, yes. 16· · · · Q.· You said that you did not recall how 17· ·exactly you came to receive this document; is 18· ·that right? 19· · · · A.· No.· It must have come in the mail.· The 20· ·only thing I can think of. 21· · · · Q.· This was a brochure of some sort when you 22· ·received it? 23· · · · A.· Yes. 24· · · · Q.· Let me draw your attention to the 25· ·left-hand side of Page 1. Page 52 ·1· · · · A.· Okay. ·2· · · · Q.· Do you see there's a list of items under ·3· ·the heading Five Features You Should Always ·4· ·Expect in Your Mortgage? ·5· · · · A.· Yes. ·6· · · · Q.· Did you pay an application fee on your no ·7· ·fee loan? ·8· · · · A.· No. ·9· · · · Q.· Did you pay any closing fees? 10· · · · A.· I don't think so, but I can't remember. 11· ·I'm sure I didn't. 12· · · · Q.· This also says no private mortgage 13· ·insurance required, correct? 14· · · · A.· That's correct. 15· · · · Q.· It mentions a close on time guarantee, do 16· ·you see that? 17· · · · A.· Uh-huh. 18· · · · Q.· Do you have an understanding of what the 19· ·close on time guarantee is? 20· · · · A.· They weren't going to extend the time so 21· ·that your interest rate would go up.· In other 22· ·words, they weren't going to go past the time you 23· ·had your interest rate locked in. 24· · · · Q.· Were they guaranteeing you that the loan 25· ·would close on a certain date? Page 53 ·1· · · · A.· That seems to be what they're saying. ·2· · · · Q.· Did you understand that to be what they ·3· ·were saying? ·4· · · · A.· Yes. ·5· · · · Q.· This also mentions something called the ·6· ·best value guarantee; do you see that? ·7· · · · A.· Yes. ·8· · · · Q.· Do you have an understanding of what the ·9· ·best value guarantee is? 10· · · · A.· Not really. 11· · · · Q.· Did anyone at the bank ever talk to you 12· ·about the best value guarantee? 13· · · · A.· They could have, but I don't remember. 14· · · · Q.· Did you ever ask anybody about the best 15· ·value guarantee? 16· · · · A.· I don't remember. 17· · · · Q.· Do you recall that Bank of America was 18· ·offering to pay $250 if you could get a better 19· ·deal? 20· · · · · · MR. WHITE:· Objection.· You can 21· ·answer. 22· · · · · · THE WITNESS:· I don't recall that. 23· ·BY MR. TROUTMAN: 24· · · · Q.· Turning your attention to the right hand 25· ·side of this first page -- Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 9 of 25 CUADRA Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 10 of 25 MATTHEW DWOSKIN, ET AL. v. BANK OF AMERICA, N.A. Donna Cuadra on 10/25/2013 1230 West Morehead Charlotte NC 28208 (704) 333-9889 Huseby, Inc. www.huseby.com 1 (Pages 1 to 4) Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION MATTHEW DWOSKIN, et al., ) ) Plaintiffs, ) ) vs. ) ) No. 1:11-CV-01109-CCB BANK OF AMERICA, N.A., ) ) Defendant. ) _________________________) DEPOSITION OF: DONNA CUADRA TAKEN ON: FRIDAY, OCTOBER 25, 2013 REPORTED BY: PATRICIA L. HUBBARD, CSR #3400 Page 2 1 2 DEPOSITION OF DONNA CUADRA, taken 3 on behalf of the Defendant, at 4 655 West Broadway, Suite 1900, 5 San Diego, California, commencing 6 at 9:06 A.M. on Friday, 7 October 25, 2013, before 8 PATRICIA L. HUBBARD, CSR #3400, a 9 Certified Shorthand Reporter in 10 and for the State of California, 11 pursuant to Notice. 12 13 APPEARANCES OF COUNSEL: 14 For the Plaintiffs: 15 LAW OFFICE OF LEONARD B. SIMON 16 BY: LEONARD B. SIMON, ESQ. 655 West Broadway 17 Suite 1900 San Diego, California 92101 18 619.231.1058 lsimon@rgrdlaw.com 19 -and- HEIDEMAN NUDELMAN & KALIK, P.C. 20 BY: TRACY REICHMAN KALIK, ESQ. 1146 19th Street, N.W. 21 Fifth Floor Washington, D.C. 20036 22 202.463.1818 (Present via telephone) 23 24 25 Page 3 1 APPEARANCES OF COUNSEL: (Continued) 2 For the Defendant: 3 McGUIRE WOODS, LLP 4 BY: BRIAN P. TROUTMAN, ESQ. 201 North Tryon Street 5 Charlotte, North Carolina 28202 704.343.2000 6 btroutman@mcguirewoods.com 7 8 Also Present: 9 Alfred Figley 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 4 1 I N D E X 2 3 WITNESS PAGE 4 DONNA CUADRA 5 (By Mr. Troutman) 6 6 7 E X H I B I T S 8 PAGE 9 DEFENDANT'S DESCRIPTION REFERENCED 10 Exhibit 222 Bank of America Interest 64 Rate Agreement 11 Exhibit 223 Bank of America Uniform 71 12 Residential Loan Application 13 Exhibit 224 Bank of America Final 80 Settlement Statement 14 Exhibit 225 Bank of America Note 89 15 Exhibit 226 Bank of America Deed of Trust 91 16 Exhibit 227 Email dated December 2, 2010 107 17 From Belloni to Cuadra 18 Exhibit 228 Email chain dated May 3, 2011 112 From Belloni to Cuadra 19 Exhibit 229 DU Underwriting Findings 115 20 Exhibit 230 Email chain dated January 28, 122 21 2011 from Cuadra to McNeal 22 Exhibit 231 Letter dated May 5, 2011 from 132 Cuadra and Figley to Bank of 23 America 24 25 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 11 of 25 MATTHEW DWOSKIN, ET AL. v. BANK OF AMERICA, N.A. Donna Cuadra on 10/25/2013 1230 West Morehead Charlotte NC 28208 (704) 333-9889 Huseby, Inc. www.huseby.com 11 (Pages 41 to 44) Page 41 1 THE WITNESS: I don't remember her -- I 2 don't remember the name. 3 BY MR. TROUTMAN: 4 Q. Well, who was she with? 5 A. Oh, Prudential. I believe Prudential 6 Realty. 7 Q. And so Melanie was the -- the first person 8 to suggest to you getting a loan with Bank of America? 9 A. Yeah. I believe so. 10 Q. And after she made that suggestion, then 11 you just started applying? Is that how it worked? 12 A. Yes. 13 Q. Okay. Was Bank of America the only lender 14 that you talked to about a mortgage for the property 15 at Corydon Avenue? 16 A. Yes. 17 Q. And do you recall when you first contacted 18 Bank of America about a loan for the property at 19 Corydon Avenue? 20 A. It closed April 2008. So I'm going to say 21 March 2008. 22 Q. Just backing up a little bit, you said you 23 started looking for properties in mid-2007; is that 24 correct? 25 A. Yes. Page 42 1 Q. About how long did it take you to settle 2 on the property at Corydon Avenue? 3 A. Not long. 4 Q. All right. And you ended up closing on 5 your No-Fee Mortgage Plus loan in April 2008? 6 A. Yes. 7 Q. Did you have a prior relationship with 8 Bank of America? 9 A. Yes. 10 Q. And what kind of relationship did you have 11 with them? 12 A. I have my savings, my checking, at the 13 time an equity line, money market account, just my 14 basic banking accounts. 15 Q. Sure. 16 A. And the equity line. 17 Q. And the equity line was on what property? 18 A. Rio Lani. 19 Q. Okay. Do you recall how you applied for a 20 no-fee loan? 21 And let me add clarification to that. 22 What I mean is on the telephone? In the 23 branch? Online. 24 Do you recall how you applied? 25 A. In the branch, I believe. Page 43 1 Q. And where was that branch? 2 A. Norco. 3 Q. When did the option of a No-Fee Mortgage 4 Plus loan come up in your talks with Bank of America 5 prior to closing? 6 A. It didn't. 7 Q. So you didn't know that the loan you were 8 an applying for was a No-Fee Mortgage Plus loan? 9 A. No. Sorry. No. 10 Q. But you have subsequently become aware 11 that your loan was a No-Fee Mortgage Plus loan, 12 correct? 13 A. Yes. 14 Q. And when did you become aware that you had 15 a No-Fee Mortgage Plus loan? 16 A. When -- 17 MR. SIMON: Is the question when did she 18 become aware that they call it that? 19 MR. TROUTMAN: Yes. Well, that she had a 20 particular loan program, that she was a part of this 21 loan program. 22 That's the question. 23 MR. SIMON: Everybody has a particular 24 loan program. You called it a no-fee loan, then you 25 called it a No-Fee Mortgage Plus loan. But I think to Page 44 1 the witness it's kind of her loan. 2 I know what you're getting at, but I'm not 3 sure the record is very clear, because there's the 4 question of the name or -- 5 MR. TROUTMAN: Yeah. And let me just -- 6 MR. SIMON: -- or the question of the 7 elements. If you're asking -- 8 MR. TROUTMAN: That's fair. Let me add a 9 clarification. 10 MR. SIMON: -- if she knows there were no 11 fees, that would be a better narrower question. 12 MR. TROUTMAN: We'll get to that. Let's 13 handle it this way. 14 BY MR. TROUTMAN: 15 Q. Okay. When I refer to the program I may 16 refer to No-Fee Mortgage Plus or I may say NFMP or I 17 may just simply refer to it as your no-fee loan. 18 When I use that -- that phrase, will you 19 understand that I'm talking about Bank of America's 20 No-Fee Mortgage Plus loan program? 21 A. Yes. 22 Q. Okay. Fair enough. 23 Now, when did you become aware that you 24 had a loan that was part of the No-Fee Mortgage Plus 25 loan program? Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 12 of 25 M. DWOSKIN Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 13 of 25 Capital Reporting Company Dwoskin, Matthew 06-04-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Baltimore Division -----------------------------------: MATTHEW DWOSKIN, et al., : : Plaintiffs, : : Civil No.: vs. : 1:11-CV-01109-CCB : BANK OF AMERICA, N.A., : : Defendant. : -----------------------------------: Washington, D.C. Tuesday, June 4, 2013 Videotaped Deposition of: MATTHEW DWOSKIN called for oral examination by counsel for Defendant, pursuant to notice, at McGuireWoods LLP, 2001 K Street, Northwest, Suite 400, Washington, D.C., before Erick M. Thacker, RPR, of Capital Reporting Company, a Notary Public in and for the District of Columbia, beginning at 9:40 a.m., when were present on behalf of the respective parties: Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 14 of 25 Capital Reporting Company Dwoskin, Matthew 06-04-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 110 1 A Correct. 2 Q And, in your experience, it's conventional 3 to do a final complete loan application, confirming 4 your previous data on the date of the closing of your 5 loan? 6 MR. NUDELMAN: Objection as to form. 7 THE WITNESS: I don't know. It had been 8 years since I'd purchased a new home. 9 BY MR. KUTROW 10 Q Okay. Now, do you recall being given the 11 choice in connection with your NFMP loan as to 12 whether or not you wanted the escrow taxes and 13 insurance? 14 A I don't believe that was an option 15 provided. 16 Q Do you -- 17 A It was a mandatory requirement. 18 Q Do you know by whom it was required? 19 A I don't know. 20 Q All right. Looking at the -- the page 21 that's identified DWO_000406, do you see that it has 22 a section called details of transaction? 112 1 conservative, and questioned how I could do 2 20 percent -- not do 20 percent and avoid PMI. 3 BY MR. KUTROW 4 Q Right. And you said if PMI was required as 5 a condition of the loan, there would be a disclosure 6 for it? 7 A That's what I understood. 8 Q And you didn't get a disclosure about any 9 PMI on the loan at the time of closing? 10 A That's correct. 11 Q Do you know whether there -- or not there 12 was any PMI of any description on the loan at the 13 time of closing? 14 A At the time of closing, no. 15 MR. KUTROW: All right. Next, Mr. Dwoskin, 16 I'm going to mark, as Exhibit 52, the note for your 17 NFMP loan. 18 (Defendant's Exhibit Number 52 19 was marked for identification) 20 BY MR. KUTROW 21 Q And you understood the note is the basic 22 loan document, don't you? 111 1 A I do. 2 Q And that indicates the purchase price, 3 prepaid items and other details of your loan from 4 Bank of America? 5 A It does. 6 Q Item G in that section indicates PMI 7 funding fee is zero? 8 A Correct. 9 Q And that was consistent with your 10 understanding that there was no charge to you for PMI 11 with connection with your NFMP loan? 12 MR. NUDELMAN: Objection as to form. 13 BY MR. KUTROW 14 Q Wasn't it, question mark? 15 MR. NUDELMAN: Objection as to form. You 16 can answer. 17 THE WITNESS: In part. In fact, I had 18 related to my wife in doing the prior research that 19 there was a disclosure that I had read on multiple 20 sites when researching that we would have signed if 21 it had PMI attached to it. It was part of my 22 argument to my father-in-law, also, who is very 113 1 A I do. 2 Q Okay. I'll give you Exhibit 52 and ask you 3 if you can identify that as the note on your NFMP 4 loan. 5 A It is. 6 Q And that's dated December 9th, '08, which 7 is your closing date? 8 A Correct. 9 Q Now, looking at page 1 of Exhibit 52, that 10 indicates your interest rate was 6.375 percent, 11 correct? 12 A Correct. 13 Q That interest rate never changed over the 14 time you had your NFMP loan, did it? 15 A No. 16 Q All right. It indicates that your monthly 17 payment was going to be $3,122.87, correct? 18 A It does. 19 Q And that -- that monthly payment didn't 20 change at any time over the course of your Bank of 21 America loan, did it? 22 A At one time, it did fluctuate in order to Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 15 of 25 Capital Reporting Company Dwoskin, Matthew 06-04-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 114 1 catch up to an escrow payment. 2 Q All right. 3 A But not the basic. 4 Q Not -- not -- meaning -- when you say "not 5 the basic," you mean, don't you, the payment on 6 the -- on the loan obligation itself never -- 7 A Correct. 8 Q -- changed? 9 A That's correct. 10 Q And -- but taxes or insurance fluctuations, 11 which were not paid to Bank of America, but were 12 subject to escrow, might have changed at some point? 13 A That's correct. 14 Q So your basic loan payment never changed, 15 did it? 16 A That's correct. 17 Q All right. And Exhibit 53, can you 18 identify that, what I've marked as Exhibit 53, as the 19 deed of trust? 20 (Defendant's Exhibit Number 53 21 was marked for identification) 22 A It is. 116 1 ahead and answer. 2 THE WITNESS: Nobody. 3 BY MR. KUTROW 4 Q Now, was -- you've just mentioned the 5 closing and the closing attorney. Was that an 6 attorney that you had retained or -- 7 A No. 8 Q Do you know by whom? 9 A It was done through NVR Settlements. 10 Q So NVR, the home seller -- builder and 11 seller selected the closing attorney? 12 A Correct. 13 Q All right. Was there some issue or glitch 14 at the closing that you recall? 15 A It was prior to closing. There was -- I 16 don't recall the details. There was a delay, and 17 then, when they finally gave us the final monthly 18 payment, they had miscalculated the payment by 19 approximately 250 to $300 a month, because they had 20 not done their due diligence with NVR on the average 21 insurance payments. 22 And so there was back and forth between my 115 1 Q That was completed in -- in connection with 2 your NFMP loan? That's correct? 3 A That's correct. 4 Q Did you take the opportunity to read this 5 document at the time? 6 A We looked over it. And I can't say we read 7 it line for line as we were signing a multitude of 8 documents. 9 Q I'm sure. Do you recall whether or not you 10 looked at the mortgage insurance provision of the 11 deed of trust? 12 A I did. That was pointed out to us by the 13 settlement attorneys. 14 Q And what did -- what, if anything, did the 15 settlement attorney say about that provision? 16 A Nothing specifically. They were just going 17 down the line -- the line items of what was paid what 18 was not paid and what we were paying for. 19 Q Okay. Did anybody at -- at the time of 20 closing indicate you were going to be charged 21 anything for mortgage insurance? 22 MR. NUDELMAN: Objection as to form. Go 117 1 realtor and their home office, Mr. Halm's manager, 2 discussing how they could have gotten to this point 3 without having conducted all the due diligence 4 necessary to give a final, fair price within a couple 5 of dollars. We understood that was -- 6 Q So that had to do with the insurance 7 escrow? 8 A That would -- insurance and fees that we 9 would -- outside of the principal and interest. 10 Q And did you get that fixed before the 11 closing? 12 A Well, it -- it turned out to be what it 13 was, and we couldn't do anything to change it. And 14 they were unwilling to do anything to compensate us 15 for not advising us up front of what the total 16 monthly payment would be. 17 Q Did -- once the loan was closed, were you 18 able to make all those monthly payments? 19 A We were. 20 Q And then, ultimately, the escrow amounts 21 went to insurance as they'd been calculated? 22 A Correct. Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 16 of 25 Capital Reporting Company Dwoskin, Matthew 06-04-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 130 1 A That's correct. 2 Q What were you referring to? 3 A Several articles from my research on the 4 NFP -- NFMP loan that stipulated that there would be 5 no PMI on this loan, that the bank was large enough 6 to take out a loan program. There were other lenders 7 out there saying -- some saying it was a great -- a 8 great program, they couldn't compete, and others 9 saying there is a catch here. 10 But I could not find anything to stipulate 11 that I should not go through with it, including the 12 article from the same author of this article, 13 Mr. Harney. 14 Q Okay. Is that somebody that you follow? 15 A I don't follow him, but I read the real 16 estate section avidly, unfortunately, and I've been 17 sort of a real estate junkie, residential real estate 18 junkie for a long, long time, and I knew his name and 19 I knew his credentials. 20 Q Okay. I was just asking -- because you did 21 track down this article out of the Seattle Times. 22 A Right. 132 1 an existing Bank of America client. According to the 2 language from Bank of America, they wanted new 3 clients. 4 Q Okay. Now, at the time you got your NFMP 5 loan, were you an existing Bank of America -- 6 A I was not. 7 Q -- customer? 8 A No. 9 Q So that -- that didn't apply to you? 10 A Right. 11 Q Now, your interrogatory responses have 12 indicated, I think, that you read an article that's 13 described as being in The Washington Post before you 14 closed your loan -- 15 A That's correct. 16 Q -- do you recall that? 17 Unless I missed it, we haven't seen that 18 article produced in the document production. 19 Do you know one way or the other? 20 A I'm fairly certain it was produced. 21 MR. KUTROW: All right. Well, let me mark 22 as Exhibit 57 and ask you to see if you think this is 131 1 Q Do you think you were looking for articles 2 by Mr. Harney? 3 A I don't know if it was Mr. Harney 4 specifically. It may have been based on the 5 conversations that Mr. Travis and I had that 6 something's coming down the pipe with the government, 7 and I was looking for it. 8 Q Do you remember the specifics of any of the 9 articles that referred to reading before you closed 10 on your NFMP loan? 11 A The -- Mr. Harney's, a couple of the proxy 12 advertising about the no PMI, no closing or limited 13 closing expenses to the borrower, that Bank of 14 America was going to pay for it. But I do 15 specifically remember -- and the reason I remember is 16 I was talking to my -- my father-in-law about it, 17 where Mr. Harney had interviewed one of the 18 executives at Bank of America, which they were 19 stipulating that -- that they could do this program 20 because of their sheer size. 21 And they wanted to bring on additional 22 customers, so you couldn't do it if you were already 133 1 the article that you read. 2 (Defendant's Exhibit Number 57 3 was marked for identification) 4 MR. NUDELMAN: Brad, are you -- did you 5 mark this? 6 MR. KUTROW: That's -- I think I did mark 7 that. 8 MS. KALIK: Yeah. 9 THE WITNESS: Fifty-six? 10 MR. NUDELMAN: You did mark this as 56? 11 MR. KUTROW: And -- 12 MR. ALKON: I'm sorry, Brad. Again, do you 13 have an extra copy? 14 MR. KUTROW: And I'm afraid I don't have 15 one. Just did not have enough copies of this one. I 16 apologize. 17 BY MR. KUTROW 18 Q All right. Looking at what we've marked as 19 Exhibit 57 -- 20 A Yes. 21 Q -- Mr. Dwoskin, does that appear to you to 22 be the article in The Washington Post that you read Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 17 of 25 Capital Reporting Company Dwoskin, Matthew 06-04-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 134 1 that's referred to in your interrogatory responses? 2 A It does. 3 Q And it's -- it's, in fact, a column by 4 Kenneth R. Harney, dated May 12th of 2007 -- 5 A Right. 6 Q -- right? Which is a year plus before you 7 closed on your NFMP loan -- 8 A Right. 9 Q -- correct? 10 And this is Mr. Harney's article assessing 11 the Bank of America no fee mortgage program -- 12 product, correct? 13 A Correct. 14 Q And tell me again how you recall that you 15 read this and when you read it. 16 A This was the article that I used to argue 17 with my father-in-law that Bank of America really did 18 have this program. 19 Q And when did you have that discussion with 20 your father-in-law? 21 A After I got off the phone with Mr. Halm. 22 Q Okay. So did you go back and look this up 136 1 when you were doing your research in the last quarter 2 of 2008? 3 A That's correct. 4 Q So you did not read it when it came out on 5 The Washington Post. You did it later on when you -- 6 when you had sort of run out of options with 7 Mr. Travis and Mr. Mills? 8 MR. NUDELMAN: Objection -- 9 THE WITNESS: I had not run -- 10 MR. NUDELMAN: -- as to form. 11 BY MR. KUTROW 12 Q Okay. I'll -- I'll rephrase it. 13 You ran across this article in late 2008 as 14 you were researching options in anticipation of your 15 December closing date? 16 A That is correct. 17 Q Now, if you'll look over at page 2 of 18 Exhibit 57. 19 A Yes. 20 Q The direct quote from -- that's included in 21 this article by Floyd Robinson, who's identified as 22 president of consumer real estate for Bank of 135 1 somehow? 2 A I did. We were -- when I mentioned I met, 3 and he was asking me for things that I had found 4 related to the document -- relating to the -- 5 Q Okay. Oh, oh, oh, I'm sorry. I was asking 6 not about any conversations with Mr. Alkon. I was 7 asking when -- whether you -- if you were having your 8 discussions with your father-in-law in late 2008, did 9 you go back and look up this article from May of 10 2007? 11 A It was an article I'd already seen in the 12 course of my due diligence on this program, which 13 prompted me to go call Mr. Halm through my friend. 14 And then it was the same article that I used to 15 validate my points to my father-in-law. 16 Q Okay. So you referred back to it -- 17 A Correct. 18 Q -- in your discussions with your 19 father-in-law? 20 A Correct. 21 Q And then, to get the time frame specific, 22 you had run across this article dated May 12th, 2007, 137 1 America, said, the company is able to offer, quote, a 2 true no fee mortgage product in part because of its 3 sheer size, which it describes as 1.4 -- 5 trillion 4 in total assets, 55 million banking customers 5 nationwide and paying nearly 350 billion portfolio of 6 first and second home mortgages. That size allows it 7 to create cost efficiencies and take over 8 responsibilities the smaller institutions cannot. 9 Can -- and that's what you were referring 10 to a minute ago? 11 A I am, in part. 12 Q And then, the next -- the following 13 paragraph says, "For instance, the no fee program 14 allows down payments as small as 5 percent for 15 conventional mortgages up to $417,000 and even lower 16 for certain jumbo loans up to $3 million without 17 private mortgage insurance premiums." 18 Do you see that? 19 A I do see that. 20 Q "The bank intends to keep all or most of 21 the no fee loans in this portfolio, Robinson said in 22 an interview." Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 18 of 25 S. DECKER Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 19 of 25 Capital Reporting Company Decker, Sean 06-05-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION ------------------------------: : MATTHEW DWOSKIN AND RANDI : : DWOSKIN, et al., : : Plaintiffs, : Civil No. : 1:11-CV-01109-CCB vs. : : BANK OF AMERICA, : : Defendant. : : ------------------------------: Washington, D.C. Wednesday, June 5, 2013 Videotaped Deposition of: SEAN DECKER Called for oral examination by counsel for Defendant, pursuant to notice, at the law offices of McGuire Woods, 2001 K Street, Northwest, Suite 400, Washington, D.C., before Denise M. Brunet, RPR, of Capital Reporting Company, a Notary Public in and for the District of Columbia, beginning at 9:37 a.m., when were present on behalf of the respective parties: Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 20 of 25 Capital Reporting Company Decker, Sean 06-05-2013 (866) 448 - DEPO www.CapitalReportingCompany.com © 2013 70 1 that you signed in conjunction with your NFMP loan. 2 And you're looking now at page -- well, you're looking 3 at page 2. I also want to direct your attention to 4 page 3 of the document. The page is identified 5 DEC_0000039. Are those your signature and 6 Mrs. Decker's signature? 7 A Yes. 8 Q And let me know when you've had a chance to 9 finish looking over it. 10 A Okay. 11 Q All right. And that's consistent with the 12 terms of the loan that you took out from Bank of 13 America under the NFMP program in the amount of 14 275,000 at an interest rate of 6.25 percent, correct? 15 A Yes. 16 Q And that lists your monthly payment as 17 $1,693.23? 18 A Yes. 19 Q And that interest rate for the principal and 20 interest on your loan has stayed the same throughout 21 the time that you have had your NFMP loan, correct? 22 A Yes. 72 1 mortgage insurance. In any of the documents that 2 you've looked at in connection with your loan, have 3 you found any statement that says at no point can 4 mortgage insurance be placed on this loan? 5 MR. NUDELMAN: Objection as to form and 6 object to the extent it seeks a legal opinion. Just 7 object to the entire question. 8 MR. KUTROW: I'm just asking -- 9 MR. NUDELMAN: The documents speaks for 10 themselves, Counsel. You're seeking a legal opinion 11 from the witness? 12 MR. KUTROW: I am not seeking a legal 13 opinion. I'm asking if he's seen that anywhere in 14 these documents. 15 MR. NUDELMAN: The documents speak for 16 themselves. 17 THE WITNESS: Can you state your question 18 again? 19 BY MR. KUTROW: 20 Q Yeah. In any of these documents that set the 21 terms of your NFMP loan have you found a statement 22 that says at no point in the future will there ever be 71 1 Q Bank of America never changed it at all, did 2 they? 3 A The interest rate? No. 4 Q Or the amount of your monthly payment. 5 A No. 6 Q In fact, they couldn't under the note, could 7 they? 8 A No. 9 MR. NUDELMAN: Objection as to form. 10 BY MR. KUTROW: 11 Q All right. Now -- and you made payments on 12 your note from when you closed in September 2007 until 13 you refinanced in 2012, correct? 14 A Correct. 15 Q Do you have any problems with the servicing 16 of the loan by Bank of America during that time frame? 17 MR. NUDELMAN: Objection. 18 Answer. 19 THE WITNESS: I don't believe so. 20 BY MR. KUTROW: 21 Q In any of the documents that we've looked 22 at -- you were talking a minute ago, Mr. Decker, about 73 1 mortgage insurance placed on this loan? 2 MR. NUDELMAN: Same objections. 3 Go ahead and answer. 4 THE WITNESS: I did not see anything with 5 that wording. However, looking at page 2 of this 6 document right here, I do see number 7, giving 7 notices. "Unless applicable law requires a different 8 method, any notice that must be given to me under this 9 note will be given by delivery -- delivering it or by 10 mailing it first class mail to me at the property 11 address above or at a different address if I give the 12 noteholder a notice of a different address." 13 So, you know, the objection was put out that 14 you're asking a legal opinion. But -- so I did not 15 see something with the phrasing that you had, but I 16 see something right here with phrasing that says if 17 anything is going to be different, a notice will be -- 18 needs to be given. So that's how I would answer your 19 question. 20 Q Does that paragraph 7 tell you if any notice 21 is legally required, here is how it will be sent? 22 MR. NUDELMAN: Same objections. Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 21 of 25 R. KIEL Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 22 of 25 Dwoskin, et al v Bank of America Robert Kiel 5/9/2013 n - -- - ( ) RTING SERVICES, INC. (I) .=. <:(essilmal.Stenomaskfor the Record .=. 919-676-1502 FAX: 919-676-2277 www.garrettreportingservices.com office@grsnc.com Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 23 of 25 Robert Kiel 5/9/2013 FOR THE UNITED STATES DISTRICT .COURT FOR THE DISTRICT OF MARYLAND Baltimore Division MATTHEW DWOSKIN and RANDI DWOSKIN, SEAN DECKER and JENNIFER DECKER, MARK AUGUSTSON, TERESA D. BUTLER, LINDA CAMPBELL, DONNA L. CUADRA and ALFRED W. FIGLEY, KELLY D. DILLS and STEFANI L. DILLS, ROBERT S. KIEL and JEANNE B. KIEL, JOSEPH PROSSER, MICHAEL WALSH and JENNIFER WALSH, PHILLIP WERTHEIMER, JOANN WOODS and SHAWN WOODS, and KERRIE ZIPPRICH, on behalf of themselves and others similarly situated Plaintiffs, vs. Civil No. :1:11-CV-01109-CCB BANK OF AMERICA, N.A., Defendant. DEPOSITION OF ROBERT S. KIEL THURSDAY, MAY 9, 2013 10:30 A.M. LAW OFFICES OF McGUIRE WOODS, L.L.P. 434 FAYETTEVILLE STREET, SUITE 2600 RALEIGH, NORTH CAROLINA GARRETT REPORTING SERVICES, INC. (919) 676-1502 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 24 of 25 Robert Kiel 5/9/2013 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 58 A Yes, str. Q -- so that mortgage msurance wasn't going to be required? A Never an issue_ Q Okay. Mr. Kiel, I'm now going to show you what I'm marking as Exhibit 5, and ask you if you can identify that as a copy of your Note for this NFMP loan? (Defendant's Exhibit No. 5 was marked for identification_) Q (Counsel hands exhibit to witness.) A (Witness reviews exhibit) That would appear to be correct Q All right. And that's, again, dated August 29 of2008, which is the date you closed on thts loan; correct? A Yes, that's correct Q Uh, for the property at 203 Red Dud Crrcle in Henderson; correct? A Yes. Q And the loan amount, as you correctly pointed out earlier, was a hundred and twelve thousand, five hundred dollars? A Yes Q All right Your interest rate, uh, on that was 6.875; correct? Page 59 A Yes, sir_ Q And your monthly payment wM seven lmndre 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 and thirty-nine dollars and five cents? 3 A Yes, sir_ 4 Q Uh, whtle we're on that page, that monthly 5 payment amount never changed; did it? 6 A No, sir_ 7 Q That's the amount you pay every month until 8 you pay off your loan in-- through a refinancing? 9 A Yes, sir. 10 Q And the mterest rate didn't change? 11 A No, sir. 12 Q Okay_ Those are your inittals at the bottom 13 of pages one and two; aren't they? 14 A Yes. Yes, they are. 15 Q And then and your - and Mrs. Kiel's as 16 well? It has a JK there it looks like. 17 A Yes. 18 Q All right. And then you both signed the 19 loan on the third page? Signed the Note I should say on 2 0 the third page. 21 A Yes,wedid. 22 Q Urn, so these-- the terms on this Note 2 3 remam conststent, uh, throughout its term until you paid 2 4 tt off through your refinancing; correct? 2 5 16 (Pages 58 to 61) GARRETT REPORTING SERVICES, INC. Page 60 A I don't know that because that brings up the issue of the so called lender paid mortgage insurance, which may constitute a change_ Q Okay. Well,letmeaskitmore specifically_ You never paid anything more than seven hundred and thirty-orne dollars and five cents per month? A No. Q And you never paid any interest rate that was other than 6 875 percent-- A Yes. Q --exactly cotmstent with this Note? A Yes. Yes, sir. Q All right Urn, you mentioned the lender paid mortgage insurance a couple of times. Uh, when did you first hear about lender paid mortgage insurance? A Uh, somettme in late 2010 I believe it was. The interest rates for mortgages had dropped considerably since we originally took out our mortgage with Bank of America in 2008. Q Okay. And-- and I wanted to ask a-- a more specific questiOn. Had you ever had any contact wi or knew-oflender patd mortgage insurance at any time before the time in 2010 when you started inquiring about refinancing your loan? A On our loan specifically? Page 61 Q Or in general. A I know-- I know exactly what it is. I-- I know, urn, what lender paid mortgage insurance is. I ha no idea that it was attached to our mortgage m any form or fashion. Q Okay. How dtd you become aware of lender paid mortgage insurance prior to this? A The insurance rates had dropped_ Q Wait a second. Wait, no, no. I'm sorry. You satd generally you understood about lender paid mortgage insurance. I'm trying to understand at this time frame in 2008 did you have any lUlderstanding? A Yes, generally speaking. I've had several mortgages.- I knew typically that you had to put 20 percent dovro to avoid any kind of insurance on your mortgage, and I knew that was something to avoid. Q Okay. And if you didn't you were, in a typical case, going to have to acquire private mortgage insurance, and that was going to be paid by the borrower correct? !v1R. BLUE: I'm going to object generally to the leadmg nature of the -- the questions posed to the witness. THE WITNESS: I knew that you could purchas private mortgage insurance for the borrower, or in (919) 676-1502 Case 1:11-cv-01109-CCB Document 153-2 Filed 08/24/16 Page 25 of 25 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION MATTHEW DWOSKIN and RANDI DWOSKIN, et al. on behalf of themselves and others similarly situated, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. Civil No.: 1:11-CV-01109-CCB ORDER AND JUDGMENT For the reasons stated in the accompanying Memorandum, and upon consideration of the Motion for Summary Judgment on Plaintiffs’ State-Law Claims (Counts II and III of the Consolidated and Amended Class Action Complaint) filed by Defendant Bank of America, N.A., and the parties’ materials filed in support of and in opposition to that Motion, it is hereby ORDERED that: 1. The Defendant’s Motion for Summary Judgment is Granted; 2. Judgment is entered in favor of Defendant Bank of America, N.A. as to Counts II and III of the Consolidated and Amended Class Action Complaint; and 3. The Clerk shall send copies of this Order and the accompanying memorandum to counsel of record and close the case. Date Catherine C. Blake United States District Judge Case 1:11-cv-01109-CCB Document 153-3 Filed 08/24/16 Page 1 of 1