08-002669 Yolanda Clark vs. Homeq Servicing Corp. Status: Closed Recommended Order on Tuesday, November 25, 2008.

Summary: Petitioner failed to prove that Respondent discriminated against her in its servicing of her home mortgage loan.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

YOLANDA CLARK, )

)

Petitioner, )

)

vs. ) Case No. 08-2669

)

HOMEQ SERVICING CORP., )

)

Respondent. )

)

RECOMMENDED ORDER

A duly-noticed final hearing was held in this case by

Administrative Law Judge T. Kent Wetherell, II, on October 1,

2008, in Starke, Florida.

APPEARANCES

For Petitioner: Yolanda Clark, pro se

Post Office Box 211

Lawtey, Florida 32058

For Respondent: Celia C. Falzone, Esquire

Akerman Senterfitt

50 North Laura Street

Jacksonville, Florida 32202

STATEMENT OF THE ISSUE

The issue is whether Respondent discriminated against Petitioner in violation of the Fair Housing Act

1 / in its

servicing of her mortgage loan.

PRELIMINARY STATEMENT

On or about January 11, 2008, 2 / Petitioner filed a Housing

Discrimination Complaint (Complaint) with the Florida Commission

on Human Relations (FCHR) alleging that Respondent discriminated

against her in its servicing of her mortgage loan. On April 18,

2008, FCHR issued a “no cause” determination based upon its

investigation of the Complaint. On May 21, 2008, Petitioner

filed a Petition for Relief (Petition) with FCHR.

On June 3, 2008, FCHR referred the Petition to the Division

of Administrative Hearings (DOAH). The referral was received by

DOAH on June 5, 2008.

On June 9, 2008, the undersigned issued an Order to Show

Cause because it appeared from a review of the case file that

the Petition was not timely filed with FCHR. Petitioner filed a

response to the Order to Show Cause on June 13, 2008.

On June 18, 2008, the undersigned issued a Recommended

Order of Dismissal concluding that Petition was not timely filed

and recommending that it be dismissed by FCHR. On July 29,

2008, FCHR issued an Order Remanding Petition for Relief from a

Discriminatory Housing Practice (FCHR Order No. 08-050). The

Remand Order rejected the conclusion that the Petition was

untimely and “remanded” the case to DOAH for a hearing on the

merits of the petition. On August 1, 2008, the undersigned

entered an Order Reopening File.

The final hearing was scheduled for and held on October 1,

2008. At the hearing, Petitioner testified in her own behalf

and Respondent presented the testimony of Jill Orrison.

Exhibits 1 through 4, 5A, 5B, and 6 through 13 were received

into evidence, and official recognition was taken of the Summary

Final Judgment in Foreclosure entered on December 3, 2007, in

Case No. 04-2006-CA-511 (8th Jud. Cir.).

The Transcript of the final hearing was filed with DOAH on

November 4, 2008. The parties were given 10 days from that date

to file proposed recommended orders (PROs). Respondent filed a

PRO on November 18, 2008. Petitioner did not file a PRO. Due

consideration has been given to Respondent’s PRO.

FINDINGS OF FACT

1. Petitioner is a black female and a Christian.

2. Respondent is a mortgage servicing company. It

collects mortgage payments on behalf of the loan holder and

distributes escrow funds for insurance and taxes.

3. Respondent does not offer financing or make loans, but

it provides assistance to borrowers through loan modifications,

repayment plans, and forbearance agreements for existing loans

( i.e. , loans made by other companies), subject to guidelines

established by the loan holder.

4. In December 2005, Petitioner applied for and received a

$63,200 loan from New Century Mortgage Corporation (New Century)

to purchase a home in Starke. The loan was secured by a

mortgage on the home. The mortgage holder was New Century, not

Respondent.

5. In January 2006, New Century assigned the loan and

mortgage to Deutsche Bank National Trust Company (Deutsche

Bank).

6. Petitioner was required to make monthly payments on the

loan in the amount of $609.05. The payments were due on the

first of each month. A late fee was charged if the payment was

not received by the fifteenth of each month.

7. Respondent began servicing Petitioner’s loan for

Deutsche Bank on May 1, 2006.

8. Petitioner did not make the payments due in May and

June 2006, which caused her to be in default on her mortgage

loan.

9. Respondent could have initiated foreclosure proceedings

on behalf of Deutsche Bank at this point, but it did not do so.

Instead, Respondent entered into a “repayment plan” with

Petitioner in order to give her an opportunity to get her loan

current.

10. The plan, dated July 24, 2006, required Petitioner to

pay $558.00 on July 31, 2006, and then to pay $2,133.59 on

August 31, 2006.

11. Petitioner paid $558.00 on July 31, 2006, but she did

not make the August payment required by the plan.

12. Respondent could have initiated foreclosure

proceedings on behalf of Deutsche Bank at this point, but again

it did not do so. Instead, Respondent agreed to Petitioner’s

request to modify the repayment plan to give her another

opportunity to get her loan current.

13. The modified plan, dated September 5, 2006, required

Petitioner to make a payment of $668.72 on September 6, 2006,

and then to make bi-weekly payments of $729.74, starting on

September 20, 2006, and ending on November 29, 2006.

14. Petitioner did not make any of the payments required

by the modified repayment plan.

15. Petitioner testified that she made a payment of

$350.00 on September 16, 2006, and another payment of $350.00 on

September 25, 2006. Petitioner presented MoneyGram receipts for

those amounts to corroborate this testimony.

16. The two $350.00 MoneyGram payments were not sufficient

to meet Petitioner’s obligations under the modified repayment

plan.

17. Petitioner acknowledged in her testimony at the final

hearing that the two $350.00 payments would not get her loan

current, but she testified that she was told by one of

Respondent’s customer service representatives that the payments

would be enough to keep the home out of foreclosure. The notes

in the Respondent’s communication history log for September 25,

2006, corroborate this testimony.

18. Respondent did not receive either of the $350.00

MoneyGram payments. One of the MoneyGram receipts show the

payment going to “Home Servicing LLC” in Baton Rouge. The payee

identified on the other receipt is illegible.

19. Respondent’s office is in Sacramento, California. It

does not have an office in Baton Rouge.

20. On September 27, 2006, Respondent referred

Petitioner’s loan to outside attorneys to initiate foreclosure

proceedings on behalf of Deutsch Bank as a result of

Petitioner’s failure to comply with the modified repayment plan.

21. A foreclosure complaint was served on Petitioner in

October 2006. The plaintiff in the foreclosure action was

Deutsch Bank, not Respondent.

22. Respondent continued to work with Petitioner even

though foreclosure proceedings had been initiated.

23. On October 30, 2006, Respondent sent Petitioner a

Default Forebearance Agreement. Petitioner signed the agreement

on November 13, 2006.

24. The agreement required Petitioner to make an initial

payment of $2,026 on November 15, 2006, and then to make monthly

payments of $891.04 on the fifteenth of each month through

October 2008. The agreement stated that the foreclosure

proceeding would be held in abeyance so long as Petitioner made

the required payments, but also stated that Deutsch Bank could

proceed with the foreclosure if Petitioner failed to make any of

the payments when due under the agreement.

25. Petitioner did not make the initial $2,026 payment

required by the Default Forebearance Agreement.

26. On November 20, 2006, Petitioner sent Respondent a

payment of $1,500 through Western Union.

27. In a letter dated November 29, 2006, Respondent

advised Petitioner that it was returning the $1,500 to her

because “the account is in foreclosure and the check amount is

not sufficient to reinstate the loan.”

28. Petitioner called Respondent numerous times between

November 30, 2006, and December 14, 2006, in an effort to work

out another payment plan.

29. Petitioner testified that on November 30, 2006, she

was told by a customer service representative named Drew that

she would be sent another modified payment plan. This testimony

is corroborated, at least in part, by the notes in Respondent’s

communication history log for November 30, 2006, which indicates

that Petitioner and a customer service representative discussed

a modified payment plan with a $1,500 initial payment due on

November 30, 2006, and monthly payments of $1,058 from December

30, 2006 through May 30, 2008.

30. However, subsequent notes in the communication history

log indicate that a modified plan was ultimately denied by

Respondent and/or Deutsch Bank because $1,500 was not enough of

a down payment and because it did not appear that Petitioner had

the financial ability to make the $1,058 monthly payments. The

communication history log reflects that this information was

communicated to Petitioner, and she acknowledged as much in her

testimony at the final hearing.

31. Petitioner did not present any credible evidence

concerning her financial situation on and after November 30,

2006, to demonstrate that she was indeed able to make monthly

payments of $1,058.

32. Petitioner continued to call Respondent periodically

in 2007 and 2008 to complain about how her loan was handled.

33. Petitioner testified that during one of her

conversations with a customer service representative named

Laura, she mentioned putting her trust in God. According to

Petitioner, the customer service representative told her not to

mention God and also told her that Petitioner should get God to

help her make her mortgage payments. Petitioner testified that

she was offended by these comments because she is a devout

Christian.

34. Petitioner testified that this conversation occurred

after Respondent had returned her $1,500 payment. She did not

identify the precise date on which the conversation occurred,

but testified that it was likely in December 2006.

35. A Summary Final Judgment was entered in favor of

Deutsch Bank in the foreclosure proceeding on December 3, 2007,

but according to Petitioner, the foreclosure sale has not yet

been held.

36. Jill Orrison, a consumer advocacy analyst for

Respondent, credibly testified that Petitioner was treated no

differently than any other person in her situation with respect

to Respondent’s servicing of her mortgage loan.

37. There is no credible evidence that Respondent

discriminated against Petitioner in any way based upon her race

or her religious affiliation.

38. The evidence fails to support Petitioner’s claim that

Respondent mishandled her loan or that it failed to do what it

agreed to do. Rather, the more persuasive evidence establishes

that Respondent worked with Petitioner for many months to help

her avoid foreclosure and that it was Petitioner who failed to

do what she agreed to do by not complying with any of the

repayment plans that she was given by Respondent.

CONCLUSIONS OF LAW

39. DOAH has jurisdiction over the parties to and subject

matter of this proceeding pursuant to Sections 120.569,

120.57(1), and 760.35(3), Florida Statutes (2008). 3 /

40. FCHR is the state agency responsible for administering

and enforcing the Fair Housing Act. See § 760.30(1), Fla. Stat.

41. Respondent argues in its PRO that the Complaint is

“time barred” because it was filed with FCHR more than one year

after the alleged discriminatory housing practices. See

Respondent’s PRO, at ¶¶ 48-50 (citing 42 U.S.C. Section

3610(a)(1)(A)(i)).

42. Consistent with the statute of limitations in the

federal Fair Housing Act cited by Respondent, Florida

Administrative Code Rule 60Y-7.001(2) provides that “[a]

complaint may be filed at any time within one year of the

occurrence of the alleged discriminatory housing practice.”

43. The only conceivable discriminatory housing practices

are Respondent’s failure to offer Petitioner a fourth repayment

plan in November 2006 and the statements about God allegedly

made to Petitioner by one of Respondent’s customer service

representatives in December 2006. These events occurred more

than a year before the Complaint was filed with FCHR in

January 2008, and as a result, Respondent is correct that the

Complaint was time-barred.

44. Nevertheless, the merits of the Complaint are

addressed below in the event that FCHR or an appellate court

disagrees that the Complaint was time-barred.

45. Section 760.25, Florida Statutes, which is part of the

Fair Housing Act, provides:

(1) It is unlawful for any bank, building

and loan association, insurance company, or

other corporation, association, firm, or

enterprise the business of which consists in

whole or in part of the making of commercial

real estate loans to deny a loan or other

financial assistance to a person applying

for the loan for the purpose of purchasing,

constructing, improving, repairing, or

maintaining a dwelling, or to discriminate

against him or her in the fixing of the

amount, interest rate, duration, or other

term or condition of such loan or other

financial assistance, because of the race,

color, national origin, sex, handicap,

familial status, or religion of such person

or of any person associated with him or her

in connection with such loan or other

financial assistance or the purposes of such

loan or other financial assistance, or

because of the race, color, national origin,

sex, handicap, familial status, or religion

of the present or prospective owners,

lessees, tenants, or occupants of the

dwelling or dwellings in relation to which

such loan or other financial assistance is

to be made or given.

(2)(a) It is unlawful for any person or

entity whose business includes engaging in

residential real estate transactions to

discriminate against any person in making

available such a transaction, or in the

terms or conditions of such a transaction,

because of race, color, national origin,

sex, handicap, familial status, or religion.

(b) As used in this subsection, the term

"residential real estate transaction" means

any of the following:

1. The making or purchasing of loans or

providing other financial assistance:

a. For purchasing, constructing,

improving, repairing, or maintaining a

dwelling; or

b. Secured by residential real estate.

2. The selling, brokering, or appraising

of residential real property.

46. Petitioner has the burden to prove that Respondent

violated this statute and thereby committed a discriminatory

housing practice. See § 760.34(5), Fla. Stat.

47. To establish a prima facie case of housing

discrimination, Petitioner must prove that (1) she was a member

of a protected class; (2) she attempted to engage in a real

estate transaction with Respondent and met all relevant

qualifications for doing so; (3) Respondent failed to engage in

the transaction despite Petitioner’s qualifications; and

(4) Respondent continued to engage in that type of transaction

with similarly-qualified persons outside of Petitioner’s

protected class. See Alcegueire v EMC Mortgage Corp. , Case No.

03-2153, 2003 Fla. Div. Adm. Hear. LEXIS 1086, at ¶ 16 (DOAH

Dec. 17, 2003) (quoting Hickson v. Home Federal of Atlanta ,

805 F. Supp. 1567, 1571-72 (N.D. Ga. 1992)), adopted , Order No.

04-001 (FCHR Feb. 26, 2004). Accord Secretary, Housing and Urban

Development ex. Rel. Herron v. Blackwell , 908 F.2d 864, 870

(11th Cir. 1990) (applying the burden-shifting analysis from

McDonnell Douglas Corporation v. Green , 411 U.S. 792 (1973), in

a housing discrimination case under the federal Fair Housing

Act).

48. Petitioner failed to establish a prima facie case.

49. First, the servicing of a mortgage loan is not the

type of transaction covered by Section 760.25, Florida Statutes.

See Alcegueire , supra , at ¶ 17.

50. Second, even if it was determined that Respondent was

subject to the provisions of Section 760.25, Florida Statutes,

in connection with its servicing of Petitioner’s mortgage loan,

the evidence fails to establish that Petitioner was financially

qualified for a fourth modified repayment plan that she was not

offered in November 2006. The evidence also fails to establish

that Respondent offered such plans to similarly-(un)qualified

persons outside of Petitioner’s protected class. Moreover, the

comments about God that offended Petitioner occurred after she

had been denied the fourth modified repayment plan and are

insufficient in and of themselves to establish a discrimination

claim.

51. Third, even if it were somehow determined that

Petitioner established a prima facie case, the more persuasive

evidence establishes that Respondent had legitimate, non-

discriminatory reasons for not offering Petitioner a fourth

repayment plan due to her failure to comply with the previously

agreed upon plans and her lack of financial wherewithal to make

the payments necessary to get her loan current. Petitioner

failed to prove that these reasons were merely a “pretext” for

unlawful discrimination.

52. Finally, or alternatively, the Petition should be

dismissed as untimely for the reasons set forth in the

Recommended Order of Dismissal entered on June 18, 2008. FCHR’s

interpretation of the word “service” in Florida Administrative

Code Rule 60Y-8.001(1) 4 / to mean “received” ( see Remand Order, at

2) is illogical, contrary to the word’s ordinary meaning in the

legal context ( see Fla. R. Civ. P. 1.080(b)(“Service by mail

shall be complete upon mailing.”)), and contrary to the Notice

of Determination sent to Petitioner in this case. Moreover,

such an interpretation is unnecessary to harmonize the rule with

Section 760.35(3)(a)2., Florida Statutes, because as pointed out

in Endnote 2 of the Recommended Order of Dismissal, that statute

is not implicated where, as here, FCHR has issued a “no cause”

determination.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that FCHR issue a final order dismissing the

Petition for Relief with prejudice.

DONE AND ENTERED this 25th day of November, 2008, in

Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of November, 2008.

ENDNOTES

1 / Sections 760.20 through 760.37, Florida Statutes. Unless

otherwise indicated, all references to the Fair Housing Act are

these statutes, not the federal law of the same name.

2 / This is the date stamped by FCHR on the Housing

Discrimination Complaint contained in the case file. However,

the complaint also includes a typewritten date of December 12,

2007, and a handwritten date next to Petitioner’s signature of

January 25, 2008; and the Determination contained in the case

file states that the complaint was filed with the U.S.

Department of Housing and Urban Development on January 15, 2008.

3 / All statutory references are to the 2008 version of the

Florida Statutes.

4 / Similar language to this rule is also contained in Florida

Administrative Code Rule 60Y-7.004(9).

COPIES FURNISHED:

Yolanda Clark

Post Office Box 211

Lawtey, Florida 32058

Celia C. Falzone, Esquire

Akerman Senterfitt

50 North Laura Street

Suite 2500

Jacksonville, Florida 32202

Denise Crawford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Larry Kranert, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.