                NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 15a0330n.06

                                           No. 14-1751
                                                                                        FILED
                          UNITED STATES COURT OF APPEALS                         May 06, 2015
                               FOR THE SIXTH CIRCUIT                         DEBORAH S. HUNT, Clerk


BARBARA CAMPBELL,               )
                                )
     Plaintiff-Appellant,       )
                                )
v.                              )                     ON APPEAL FROM THE UNITED
                                )                     STATES DISTRICT COURT FOR THE
NATIONSTAR MORTGAGE and FEDERAL )                     EASTERN DISTRICT OF MICHIGAN
NATIONAL MORTGAGE ASSOCIATION, )
                                )
     Defendants-Appellees.      )


       Before: BOGGS and McKEAGUE, Circuit Judges; PEARSON, District Judge.*

       BENITA Y. PEARSON, District Judge. Plaintiff-Appellant Barbara Campbell sought

to have the foreclosure sale of her house in Detroit, Michigan set aside due to alleged defects in

the loan modification and foreclosure proceedings initiated by Defendants-Appellees Nationstar

Mortgage, LLC (“Nationstar”) and Federal National Mortgage Association (“Fannie Mae”). For

the reasons that follow, we affirm the district court’s dismissal of Campbell’s case.

                    I. FACTUAL AND PROCEDURAL BACKGROUND

       Campbell obtained a $165,000 loan from Flagstar Bank on July 25, 2006. As security for

the loan, Campbell granted Mortgage Electronic Registration Systems, Inc. (“MERS”), acting




*
The Honorable Benita Y. Pearson, United States District Judge for the Northern District of
Ohio, sitting by designation.
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

solely as nominee for the lender and the lender’s successors and assigns, a mortgage against her

house. MERS assigned Campbell’s mortgage to Nationstar on April 23, 2010.

       Campbell defaulted on her mortgage. She alleges that financial hardship resulting from

extensive medical treatment for both herself and close family members caused the default.

Seeking relief, Campbell applied for a loan modification from Nationstar in January 2013.

Nationstar assigned a Single Point of Contact (“SPOC”) to assist Campbell with the process.

Campbell also applied for assistance with the Detroit Non-Profit Housing Corporation, which

prepared and submitted a loan modification application on her behalf.

       Nationstar mailed a letter to Campbell on March 6, 2013, informing her that Nationstar

had received her application for the “FNMA Apollo Trial Period” (Fannie Mae’s loan

modification program) and that it was under review. The letter states, in pertinent part: “Please

note that during this evaluation period your home will not be referred to foreclosure or be sold at

a foreclosure sale if the foreclosure period has already been initiated.” R. 1-2 at Page ID #54. It

is undisputed that Campbell’s house had not yet been referred to foreclosure at the time

Nationstar sent this letter. The record is ambiguous, however, on whether the FNMA Apollo

Trial Period is an independent loss mitigation program separate and apart from the obligations of

Nationstar and Fannie Mae under Mich. Comp. Laws § 600.3205a, or whether Nationstar’s

review of Campbell’s FNMA Apollo Trial Period application is part of the notice requirements

set forth in § 600.3205a that foreclosing parties must follow before commencing a foreclosure

proceeding.




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       Campbell received a letter on March 14, 2013 from Trott & Trott, P.C., Nationstar’s

designee.   The letter informed Campbell of her right, pursuant to Mich. Comp. Laws §

600.3205a, to request a meeting to discuss modification of her mortgage loan. Campbell alleges

that she promptly replied and requested a loan modification meeting. Notwithstanding her

alleged response to Trott & Trott, P.C.’s letter, Campbell states that she “was never given a

meeting despite calls to find out why.” Campbell also contends that she promptly replied to each

Nationstar letter requesting additional documents to support her loan modification application,

but that Nationstar employees gave her conflicting answers about whether Nationstar had

received the documentation. One employee allegedly informed Campbell that “she should

continue to provide documentation to [Nationstar] as requested and if a foreclosure occurred, it

would be reversed.”

       Meanwhile, Nationstar proceeded with foreclosure by advertisement. Starting on May

27, 2013, Nationstar published notice in the Detroit Legal News. The following day, Nationstar

posted a copy of the foreclosure notice on Campbell’s property.            Nationstar purchased

Campbell’s house at a Sheriff’s Sale on July 11, 2013.         Pursuant to Mich. Comp. Laws

§ 600.3240(8), Campbell had six months after the foreclosure sale to exercise her statutory right

of redemption. Campbell, however, took no action to redeem her property. Campbell alleges

that, while proceeding with the foreclosure, Nationstar continued to request documentation for

her “FNMA Apollo Trial Period” application. Specifically, Campbell presents a letter that she

received from Nationstar on June 19, 2013, in which Nationstar requested that Campbell send a




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

signed copy of her most recent tax returns to Nationstar by July 20, 2013—nine days after the

Sheriff’s Sale.

       Campbell filed her complaint in Wayne County Circuit Court on January 13, 2014,

alleging four causes of action: (1) Violation of Mich. Comp. Laws § 600.3205 et seq. as to

Nationstar, (2) Violation of the Real Estate Settlement Procedures Act (“RESPA”), Regulation

X, and 12 C.F.R. § 1024.41 as to Nationstar, (3) Negligence of Duty under the Home Affordable

Modification Program (“HAMP”) as to Fannie Mae, and (4) Illegal Foreclosure as to both

Nationstar and Fannie Mae. Nationstar and Fannie Mae timely removed the case to the United

States District Court for the Eastern District of Michigan and moved to dismiss Campbell’s

complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court granted

Nationstar and Fannie Mae’s motion as to each of Campbell’s claims. Campbell’s timely appeal

followed.

                                II. STANDARD OF REVIEW

       We review de novo a district court’s decision to grant a motion to dismiss under Federal

Rule of Civil Procedure 12(b)(6) for failure to state a claim. The purpose of a Rule 12(b)(6)

motion is “to test whether, as a matter of law, the plaintiff is entitled to legal relief even if

everything alleged in the complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993)

(citing Nishiyama v. Dickson Cnty., 814 F.2d 277, 279 (6th Cir. 1987) (en banc)). “Following

Twombly and Iqbal, it is well settled that a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face.” Ctr. for Bio–Ethical

Reform v. Napolitano, 648 F.3d 365, 369 (6th Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S.


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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

662, 678 (2009)) (internal quotation marks omitted). “A claim is plausible on its face if the

‘plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.’” Ctr. for Bio-Ethical Reform, 648 F.3d at 369

(quoting Iqbal, 556 U.S. at 678).

       When considering a motion to dismiss, we must “‘accept all well-pleaded factual

allegations of the complaint as true and construe the complaint in the light most favorable to the

plaintiff.’” Reilly v. Vadlamudi, 680 F.3d 617, 622 (6th Cir. 2012) (quoting Dubay v. Wells,

506 F.3d 422, 426 (6th Cir. 2007)). We do not, however, need to accept as true legal conclusions

couched as factual allegations. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007)). “Threadbare recitals of the elements of a cause of action, supported

by mere conclusory statements, do not suffice.” Id. “In addition to the allegations in the

complaint, [we] may also consider other materials that are integral to the complaint, are public

records, or are otherwise appropriate for the taking of judicial notice.”       Ashland, Inc. v.

Oppenheimer & Co., 648 F.3d 461, 467 (6th Cir. 2011).

                                        III. ANALYSIS

                     A. Nationstar and Fannie Mae’s Motion to Dismiss

       Campbell argues that the district court improperly considered a motion for summary

judgment that Nationstar and Fannie Mae disguised as a motion to dismiss for failure to state a

claim.1 Campbell contends that a number of documents relied on by Nationstar and Fannie Mae

are outside the pleadings and raise factual assertions that, according to Campbell, she was unable

1
  Campbell raised this argument in her statement of the case and not in the argument section of
her brief.

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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

to respond to without the benefit of discovery. Because the documents were beyond the scope of

a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6), the argument

goes, the district court erred in granting the motion to dismiss.

       “A copy of a written instrument that is an exhibit to a pleading is a part of the pleading

for all purposes.” Fed. R. Civ. P. 10(c). A court may also consider “documents incorporated

into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs,

Inc. v. Major Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Moreover, a defendant may, in

certain circumstances, introduce into the pleadings documents that the plaintiff does not.

“Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings

if they are referred to in the plaintiff’s complaint and are central to her claim.” Weiner v. Klais

& Co., 108 F.3d 86, 89 (6th Cir. 1997) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp.,

987 F.2d 429, 431 (7th Cir. 1993), overruled on other grounds, Swierkiwica v. Sorema, N.A.,

534 U.S. 506 (2002). “Hence, in this case, the panel may consider documents relating [to] the

note, mortgage, assignment, loan modification process, and foreclosure that are referenced in the

complaint and integral to [Campbell’s] claims.” Gardner v. Quicken Loans, Inc., 567 F. App’x

362, 365 (6th Cir. 2014).

       Campbell attached a letter from Nationstar’s designee, Trott & Trott, P.C. (R. 1-2 at Page

ID #55–57), the letter confirming receipt of Campbell’s request for a loan modification (id. at

#58–59), and the affidavit of notice pursuant to Mich. Comp. Laws § 600.3205 (id. at #64) as

exhibits to her complaint.     Similarly, Campbell attached as exhibits to her complaint: her

mortgage (id. at #26–37), the MERS Inc. servicers identification (id. at #31), her Detroit Non-


                                                 -6-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

Profit Housing Corporation Application (id. at #43–48), her HAMP application (id. at #50–52),

the Sheriff’s deed on mortgage sale (id. at #67–79), and various letters of correspondence

between Campbell, Trott & Trott, P.C., and Nationstar. The federal rules treat these attached

exhibits as part of the pleadings. The district court could, therefore, consider these exhibits in

ruling on Nationstar and Fannie Mae’s motion to dismiss. See Fed. R. Civ. P. 10(c). And, to the

extent the district court considered any of these documents in ruling on the motion to dismiss, it

was proper to do so, under Federal Rule of Civil Procedure 10(c).

       Campbell contends that Nationstar and Fannie Mae improperly relied on documents that

are outside the pleadings in their motion to dismiss: (1) income documentation supporting

Campbell’s loan modification application and (2) a letter sent by Nationstar that informed

Campbell that she had failed to provide financial documents necessary to conduct a loan

modification meeting. Neither argument is availing. “[W]e can affirm on any basis supported

by the record.” EA Mgmt. v. JP Morgan Chase Bank, N.A., 655 F.3d 573, 575 (6th Cir. 2011).

Because the record reflects that the case was dismissed for reasons unconnected to Nationstar

and Fannie Mae’s arguments that relied on the income documentation and the letter sent by

Nationstar, it is not necessary to decide whether the district court improperly considered these

documents.2


2
    In their motion to dismiss, Nationstar and Fannie Mae relied on Campbell’s income
documentation to support their argument that Campbell was not qualified for a loan
modification. The district court did not evaluate whether Campbell qualified for a loan. Instead,
it merely observed that Campbell failed to plead any facts that support such a conclusion. The
district court further held that, “[e]ven if Campbell did qualify, ‘there is nothing in [Mich. Comp.
Laws § 600.3205] itself that requires a lender to grant a borrower a modification, even if the
borrower is eligible for modification.’” R. 8 at Page ID #367 (quoting Brown v. Wachovia
Mortg., N.A., No. 307344, 2013 WL 6083906, at *5 (Mich. Ct. App. Nov. 19, 2013)); see also
                                                 -7-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       The district court’s holdings relied on documents that Federal Rule of Civil Procedure

10(c) treats as part of the pleadings. Therefore, the district court properly considered Nationstar

and Fannie Mae’s motion as a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).

                              B. Campbell’s Foreclosure Claims

       Campbell challenges the district court’s dismissal of her two mortgage-foreclosure

claims. Count I of her complaint alleges that Nationstar violated Mich. Comp. Laws § 600.3205

by failing to meet with Campbell in order to determine whether she qualified for a loan

modification. Count IV is predicated on Count I. Campbell alleges that, because Nationstar and

Fannie Mae failed to meet with Campbell about loan modification, they lacked the legal

authority to foreclose on her property.

       Michigan law vests the purchaser of the deed at a foreclosure sale with “all the right, title,

and interest that the mortgagor had” in the property unless the mortgagor redeems the property

within the sixth-month statutory period for redemption. Mich. Comp. Laws § 600.3236. The

Olson v. Merrill Lynch Credit Corp., 576 F. App’x 506, 510 (6th Cir. 2014) (“The statute did not
require the lender to actually modify the loan.”). Therefore, even if the district court had
considered the income documentation that Campbell argues it should not have, the district court
found Campbell’s claim for a violation of Mich. Comp. Laws § 600.3205 failed for reasons
unrelated to the documentation.
        Nationstar and Fannie Mae argued that Nationstar’s letter proves that Campbell failed to
provide documentation requested by Nationstar, a precondition to obtaining a loan modification
meeting under Mich. Comp. Laws § 600.3205. The district court expressly rejected this
argument. In a footnote, the district court stated that it accepted as true that Campbell
appropriately responded to all requests for documentation. Although the district court accepted
that Campbell provided the requested documentation during the loan modification process, it
nonetheless concluded that Campbell had failed to adequately plead that she was prejudiced by
an irregularity in the foreclosure process. The district court’s opinion on this point, as with the
court’s income-documentation opinion, rests on grounds for dismissal separate and apart from
whether Campbell had submitted the requisite documentation entitling her to a loan modification
meeting.

                                                -8-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

mortgagor loses her legal interests in the property after the redemption period expires. El-

Seblani v. IndyMac Mortg. Servs., 510 F. App’x 425, 428 (6th Cir. 2013) (“A strict reading of

the statute suggests that once the redemption period expires, the homeowner has no legal interest

in the property that litigation might vindicate.”); Senters v. Ottawa Sav. Bank, FSB, 503 N.W.2d

639, 641–42 (Mich. 1993) (observing that a strict construction of Michigan’s redemption statute

“preclud[ed] deviation from its terms despite equitable considerations”). It is undisputed that

Campbell commenced this present lawsuit after the expiration of the six-month redemption

period without having taken any steps to redeem her property.            Therefore, Nationstar, as

purchaser of Campbell’s property at the July 11, 2013 Sheriff’s Sale, enjoys all the rights that

Campbell had in her property unless Campbell can demonstrate a basis for setting aside the sale.

       In order to successfully set aside a foreclosure sale after the expiration of the redemption

period, the mortgagor must first make “a clear showing of fraud, or irregularity.” Conlin v.

Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 361 (6th Cir. 2013) (quoting Schulthies v.

Barron, 167 N.W.2d 784, 785 (Mich. Ct. App. 1969)). The indicated irregularity, however, must

have occurred in the foreclosure process itself. Williams v. Pledged Property II, LLC, 508 F.

App’x 465, 468 (6th Cir. 2012) (citing Heimerdinger v. Heimerdinger, 299 N.W. 844, 846

(Mich. 1941)). “[D]efects or irregularities in a foreclosure proceeding result in a foreclosure that

is voidable, not void ab initio.” Kim v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329, 337

(Mich. 2012).    In order to have the foreclosure sale set aside, the mortgagor must also

demonstrate that she was prejudiced by the irregularity. Conlin, 714 F.3d at 361 (quoting Kim,

825 N.W. at 337). A mortgagor demonstrates prejudice by showing that she would have been in


                                                -9-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

a better position to preserve her interest in the property absent the defendant’s noncompliance

with Michigan’s foreclosure laws. Conlin, 714 F.3d at 361 (quoting Kim, 825 N.W. at 337).

       Campbell has failed to plead an irregularity in the foreclosure process. In her complaint,

Campbell alleges that Nationstar failed to have a meeting with her before commencing

foreclosure, and that Nationstar proceeded with foreclosure without determining whether

Campbell qualified for a loan modification after Nationstar had sent a letter that stated

Campbell’s home would not be referred to foreclosure during the evaluation of her application to

participate in the FNMA Apollo Trial Period.3 At most, Campbell alleges irregularities with the

loan modification process that occurred contemporaneously with the foreclosure. An alleged

irregularity in the loan modification process, however, does not constitute an irregularity in the

foreclosure proceeding. See Williams, 508 F. App’x at 468 (“Williams’s claim of fraud relies on

oral assurances during a negotiation to change the terms of the contract. Despite the fact that the

negotiations may have taken place during the foreclosure process, these negotiations remained

separate from the foreclosure process itself.” (emphasis added)); Ashford v. Bank of Am., N.A.,


3
  As previously discussed, the record is ambiguous on whether the letter concerning the FNMA
Apollo Trial Period is part of the written notice that Nationstar was required to provide Campbell
under Mich. Comp. Laws § 600.3205a before commencing foreclosure proceedings, or whether
the FNMA Apollo Trial Period is an independent loss mitigation procedure that Fannie Mae has
provided for qualifying borrowers. At least one letter Campbell has attached to her complaint
suggests that the FNMA Apollo Trial Period is distinct from the notice requirements of §
600.3205a. See R. 1-2 at Page ID #56 (“If you request a meeting with the designated agent, as
outlined, foreclosure proceedings will not be commenced until 90 days after the date of this
notice. For this provision to be applicable, the request for a meeting must be made despite any
independent loss mitigation options you may be pursuing with your lender.”) (emphasis added).
We conclude that the promise not to foreclose while Campbell’s application was under
evaluation is subject to the notice requirements under Mich. Comp. Laws § 600.3205a because it
does not affect the outcome of the case.

                                               -10-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

No. 13-12153, 2013 WL 5913411, at *3 (E.D. Mich. Oct. 31, 2013) (concluding that the manner

in which the defendant “handled potential loss mitigation or modification . . . has no bearing on

the foreclosure procedure itself”); Shamoun v. Fed. Nat’l Mortg. Assoc., No. 12–15608, 2013

WL 2237906, at *4 (E.D. Mich. May 21, 2013) (concluding that allegations that Defendants

“preclude[d] the Plaintiff from entering into a Loan Modification” were insufficient to justify

setting aside the foreclosure sale). Campbell’s allegations about irregularities with the process

by which Nationstar evaluated Campbell for a loan modification do not constitute irregularities

with how Nationstar implemented the foreclosure process against Campbell.

       Campbell has also failed to sufficiently allege that she has been prejudiced by an

irregularity that occurred during the foreclosure process.       Campbell argues that she was

prejudiced by not receiving a loan modification because she would have been in a better position

to avoid foreclosure had she received a loan modification from Nationstar. Campbell’s argument

is flawed. Even setting aside the fact that the loan modification process is not a part of the

foreclosure, Campbell has not demonstrated how she has been prejudiced by not receiving a loan

modification meeting. Implicit in Campbell’s claim that she would have been in a better position

to preserve her interest in her property is the contention that the loan modification meeting would

have prevented the foreclosure.     Otherwise, Campbell would have been in the exact same

position even with the benefit of the meeting: in default on her (now modified) loan with her

property subject to foreclosure. Cf. Derbabian v. Bank of Am., N.A., No. 14-1253, 2014 WL

5293426, at *6–7 (6th Cir. Oct. 17, 2014) (concluding that the plaintiffs did not adequately plead

prejudice where the complaint does not allege that they could have either redeemed the property


                                               -11-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

at the sheriff’s sale or paid off the debt owed). As the district court noted, Mich. Comp. Laws §

600.3205c merely requires that the lender consider modifying the borrower’s loan before

foreclosure; it does not create for the borrower an entitlement to a modification. Therefore,

Nationstar still could legally foreclose on Campbell’s property even if Campbell had the benefit

of a loan modification meeting. Although Campbell conclusively asserts that she qualified for a

loan modification throughout the foreclosure of her house, she does not allege that Nationstar

would have changed its course of action if the meeting had occurred. Consequently, Campbell

has not shown how she would have been in a better position to preserve her interest in the

property had she met with Nationstar because the law still permitted Nationstar to foreclose

without granting a modification.

       Finally, even if Campbell had successfully pleaded irregularity and prejudice, Michigan

law does not provide her with the remedy she seeks. Mich. Comp. Laws § 600.3205c(8)

provides that the remedy for violations that occur during the loan modification process is to

convert the foreclosure-by-advertisement into a judicial foreclosure. It does not permit a court to

set aside a completed foreclosure. Elsheick v. Select Portfolio Servicing, Inc., 566 F. App’x 492,

499 (6th Cir. 2014) (“Elsheick requests that we set aside the completed foreclosure-by-

advertisement proceedings and order the defendants to start anew with an offer of a loan

modification. However, the relief Elsheick seeks is not available to remedy the violation he

alleged.”). Conversion of the foreclosure-by-advertisement into a judicial foreclosure can only

occur if the remedy is sought prior to the completion of the foreclosure sale.         Rugiero v.

Nationstar Mortgage, LLC, 580 F. App’x 376, 379 (6th Cir. 2014); Holliday v. Wells Fargo


                                               -12-
No. 14-1751, Campbell v. Nationstar Mortgage, et al.

Bank, NA, 569 F. App’x 366, 370 (6th Cir. 2014); Smith v. Bank of America Corp., 485 F. App’x

749, 756 (6th Cir. 2012). Campbell does not cite any authority under which a court may set

aside the foreclosure sale, and we find no reason to disturb established precedent to the contrary.

Campbell therefore could not reverse the foreclosure even if she had sufficiently pleaded

irregularity and prejudice.

       The district court properly concluded that Campbell could not show an irregularity in the

foreclosure process that caused her prejudice, and that Campbell had missed her opportunity to

obtain the remedy for violations of Mich. Comp. Laws § 600.3205. Accordingly, we affirm the

dismissal of Campbell’s foreclosure claims.

                                 C. Campbell’s RESPA Claim

       Campbell argues that the district court erred in concluding that she did not adequately

plead a claim under 12 C.F.R. § 1024.41, a Consumer Financial Protection Bureau (“CFPB”)

regulation promulgated pursuant to section 1022(b) of the Dodd-Frank Act, 12 U.S.C. § 5512(b),

and the Real Estate Settlement Procedures Act (“RESPA”) 12 U.S.C. § 2601 et seq. Section

1024.41 prohibits, among other things, a loan servicer from foreclosing on a property in certain

circumstances if the borrower has submitted a complete loan modification, or loss mitigation,

application. 12 C.F.R. § 1024.41(g). The district court dismissed Campbell’s claim because the

regulation was not in effect at the time of the foreclosure, and did not retroactively apply in this

case. On appeal, Campbell argues that the district court should have retroactively applied

12 C.F.R. § 1024.41.




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       The Supreme Court has reconciled “two seemingly contradictory statements found in

decisions concerning the effect of intervening changes of the law.” Landgraf v. USI Film Prods.,

511 U.S. 244, 263–64 (1994). Usually, “a court is to apply the law in effect at the time it renders

its decision.” Id. at 264 (quoting Bradley v. School Bd. of City of Richmond, 416 U.S. 696, 711

(1974)). “Retroactivity is not favored in the law,” however, and courts should not construe laws

to have retroactive effect “unless their language expressly requires this result.”         Bowen v.

Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). Therefore, courts should apply the law in

effect at the time they decide a case unless the law has a retroactive effect on the parties.

BellSouth Telecomms., Inc., v. Se. Tel., Inc., 462 F.3d 650, 657 (6th Cir. 2006); Patel v.

Gonzales, 432 F.3d 685, 691 (6th Cir. 2005). The Supreme Court has adopted a two-part test for

determining whether a statute or regulation should retroactively apply to conduct which preceded

the law’s enactment:

       We first look to whether Congress has expressly prescribed the statute’s proper
       reach, and in the absence of language as helpful as that we try to draw a
       comparably firm conclusion about the temporal reach specifically intended by
       applying our normal rules of construction. If that effort fails, we ask whether
       applying the statute to the person objecting would have a retroactive consequence
       in the disfavored sense of affecting substantive rights, liabilities, or duties [on the
       basis of] conduct arising before [its] enactment. If the answer is yes, we then
       apply the presumption against retroactivity by construing the statute as
       inapplicable to the event or act in question owing to the absen[ce of] a clear
       indication from Congress that it intended such a result.

Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37–38 (2006) (citations and quotation marks

omitted); see also BellSouth, 462 F.3d at 658 (applying Fernandez-Vargas).

       As to the first inquiry, Nationstar argues that the regulation’s January 10, 2014 effective

date reflects an intent not to apply it to conduct occurring prior to that date. We agree. The

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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

CFPB promulgated a final rule on February 14, 2013, which amended Regulation X to include

the procedures for evaluating and responding to loss mitigation applications that are now

codified at 12 C.F.R. § 1024.41. Mortgage Servicing Rules Under the Real Estate Settlement

Procedures Act (Regulation X), 78 FR 10696-01 (February 14, 2013) (codified at 12 C.F.R. pt.

1024) (“Mortgage Servicing Rules”). Although the rule was promulgated on February 14, 2013,

the CFPB established an effective date that was almost a full year later: January 10, 2014. Id. at

10842. It chose to do so for a number of reasons. The CFPB considered comments from both

consumer groups (generally urging earlier effective dates to expedite the rule’s protections) and

industry commenters (generally urging a later effective date to allow time to comply with the

new rules), and struck a balance among those competing interests with the January 10, 2014

effective date. Id. The CFPB concluded that the effective date “will ensure that consumers

receive the protections in these rules as soon as reasonably practicable” and “afford covered

persons sufficient time to implement the more complex or resource-intensive new requirements.”

Id. The CFPB clearly heard comments from parties that would have preferred a more immediate

effective date, but instead chose to strike a compromise. If the CFPB had intended to apply the

amended Regulation X to conduct occurring before January 10, 2014, it could have ignored the

industry concerns about the time allotted for implementation and made the rule effective

immediately. It seems unlikely that the CFPB intended to retroactively apply the rule after

establishing a later effective date in large part based on industry concerns that compliance prior

to that date was not possible.




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       The CFPB also found that the January 10, 2014 effective date brought the amended

Regulation X’s effective date in line with the effective dates of other regulations that the CFPB

issued to implement provisions of the Dodd-Frank Act. The CFPB issued these regulations,

referred to collectively as the Title XIV Final Rules, over a span of ten days in January 2013.

Amendments to the 2013 Mortgage Rules Under the Equal Credit Opportunity Act (Regulation

B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act

(Regulation Z), 78 Fed. Reg. 60382-01, 60384 (October 1, 2013) (“Amendments to the 2013

Mortgage Rules”). For many of these Title XIV Final Rules, the CFPB specified that “the new

regulations would apply to transactions for which applications were received on or after

January 10, 2014,” expressly disclaiming any retroactive application of the rules. Id. at 60385

(emphasis added). Despite the different issuance dates, the CFPB instead decided to establish a

consistent effective date of January 10, 2014, believing that doing so would facilitate

compliance. Id. When the CFPB issued the new Mortgage Servicing Rules in February, it

expressly stated that the January 10, 2014 effective date allowed the CFPB to adopt “a

coordinated approach to facilitate implementation” of both the Mortgage Servicing Rules and the

Title XIV Final Rules. Mortgage Servicing Rules, 78 Fed. Reg. at 10842. It makes sense,

therefore, that if the CFPB believed that it could facilitate implementation by setting the same

effective date for both the Mortgage Servicing Rules and the Title XIV Final Rules, it also would

choose to align the two sets of rules with respect to prospective application so that the subjects of

the new regulation knew a date certain by when all new CFPB regulations went into effect.




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       The second step of the Fernandez-Vargas analysis supports our conclusion that 12 C.F.R.

§ 1024.41 should not apply retroactively. Nationstar had purchased Campbell’s house at the July

11, 2013 foreclosure sale. The date that 12 C.F.R. § 1024.41 became effective—January 10,

2014—is almost six months after Nationstar completed foreclosure on Campbell’s house. If we

retroactively applied 12 C.F.R. § 1024.41 in this case, it would both “increase a party’s liability

for past conduct, [and] impose new duties with respect to transactions already completed.”

Landgraf, 511 U.S. at 280. Retroactive application of 12 C.F.R. § 1024.41 would impermissibly

impose upon Nationstar the duty not to foreclose on Campbell’s house after she had submitted a

loss mitigation package when the foreclosure at issue in this case had been completed well

before this duty ever existed. Nationstar would be liable for a then-lawful July 11, 2013

foreclosure under a regulation that would not become effective for another six months. These

are precisely the “new legal consequences” that the Landgraf Court warned should not be

attached “to events completed before [a law’s] enactment.” Landgraf, 511 U.S. at 270.

       The two-part test from Fernandez-Vargas weighs against applying 12 C.F.R. § 1024.41

retroactively. The district court’s conclusion that the regulation did not apply retroactively was

correct, and therefore its decision to dismiss Campbell’s RESPA claim was proper.

                               D. Campbell’s Negligence Claim

       Finally, Campbell argues that Fannie Mae owed her a duty “of full participation in

HAMP, including its adherence to all HAMP requirements and adhering to the terms of the

modification agreement.” R. 1-2 at Page ID #21. HAMP is an acronym for the federal Home

Affordable Modification Program created pursuant to the Emergency Economic Stabilization


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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

Act, 12 U.S.C. § 5201, which creates incentives for lenders to offer borrowers more favorable

loan modifications. Olson, 576 F. App’x at 511–12; Wigod v. Wells Fargo Bank, N.A., 673 F.3d

547, 556–57 (7th Cir. 2012). The district court rejected Campbell’s argument, adhering to the

view held by “the vast majority of courts” that homeowners do not have a private right of action

under HAMP. R. 8 at Page ID #369 (quoting Nafso v. Wells Fargo Bank, N.A., No. 11-10478,

2011 WL 1575372, at *4 (E.D. Mich. Apr. 26, 2011)). The district court also concluded that

Campbell did not identify any Michigan state decision holding that a plaintiff may recast a

HAMP violation as a negligence claim. On appeal, Campbell argues that the district court

incorrectly applied Mik v. Federal Home Loan Mortgage Corp., 743 F.3d 149 (6th Cir. 2014)

when it concluded that Campbell could not use Nationstar and Fannie Mae’s failure to evaluate

her loan for modification as grounds for undoing the foreclosure sale. We affirm the district

court’s decision because, even if we permitted Campbell to use an alleged violation of HAMP as

a basis for her negligence claim, Campbell has failed to adequately plead duty or breach.

       Under Michigan law, the prima facie case of tortious negligence has four elements: (1) a

duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) the plaintiff suffered

damages, and (4) the breach of duty caused the damages. Haliw v. Sterling Heights, 627 N.W.2d

581, 588 (Mich. 2001); Schultz v. Consumers Power Co., 506 N.W.2d 175, 177 (Mich. 1993). In

order to satisfy the causation requirement, the plaintiff must prove both causation in fact and

legal, or proximate, causation. Skinner v. Square D Co., 516 N.W.2d 475, 479 (Mich. 1994).

“Cause in fact requires that the harmful result would not have come about but for the defendant’s

negligent conduct.” Haliw, 627 N.W.2d at 588. “On the other hand, legal cause or ‘proximate


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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

cause’ normally involves examining the foreseeability of consequences, and whether a defendant

should be held legally responsible for such consequences.”          Skinner, 516 N.W.2d at 479.

Michigan does not adhere to the doctrine of negligence per se. Zeni v. Anderson, 243 N.W.2d

270, 280–82 (Mich. 1976). Instead, the violation of a statute creates a rebuttable presumption of

negligence. Candelaria v. B.C. Gen. Contractors, Inc., 600 N.W.2d 348, 356 n.5 (Mich. Ct.

App. 1999).    Violations of rules or regulations, on the other hand, are only evidence of

negligence. Kennedy v. Great Atl. & Pac. Tea Co., 737 N.W.2d 179, 186 (Mich. Ct. App. 2007);

Johnson v. Bobbie’s Party Store, 473 N.W.2d 796, 801 (Mich. Ct. App. 1991).

       Campbell alleges that Fannie Mae breached a duty owed to her under the regulations that

establish the HAMP program. While the allegations that Fannie Mae failed to comply with

HAMP regulations may provide evidence of negligent conduct under Michigan law, Campbell

must still show that the HAMP regulations impose on servicers a duty of care owed to

borrowers. See Kennedy, 737 N.W.2d at 186 (“Plaintiff contends that defendants breached the

duty to provide a safe workplace as required by § 9 of MIOSHA, MCL 408.1009, and by

administrative regulations enacted under MIOSHA. . . . However, MIOSHA and the regulations

enacted under MIOSHA apply only to the relationship between employers and employees and

therefore do not create duties that run in favor of third parties.”). As the district court correctly

observed, Michigan courts have not recognized that such a duty exists under HAMP.                 Its

decision accords with the decisions of other Michigan federal district courts that have declined to

find a duty exists under Michigan law. E.g., Ahmad v. Wells Fargo Bank, NA, 861 F. Supp. 2d

818, 826–28 (E.D. Mich. 2012); Jovanovic v. Bank of New York Mellon, No. 13-11851, 2013


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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

WL 4042613, at *4 (E.D. Mich. Aug. 9, 2013) (observing, in a non-HAMP foreclosure action,

that tort actions based on contract require a duty “separate and distinct from the defendant’s

contractual obligations”); Mazur v. Washington Mut. Bank, F.A., No. 09-13371, 2011 WL

108926, at *7 (E.D. Mich. Jan. 10, 2011) (discussing federal lending laws other than HAMP).

       Moreover, even if Fannie Mae owed Campbell a duty of care under the HAMP

guidelines, Campbell cannot show that a breach of that duty caused her injury. When a plaintiff

seeks to use the violation of a law to establish negligence, Michigan law requires the plaintiff to

show that (1) the law was intended to protect against the result of the violation, (2) the plaintiff is

a member of the class intended to be protected by the law, and (3) the violation proximately

caused the plaintiff’s injury. Klanseck v. Anderson Sales & Serv., Inc., 393 N.W.2d 356, 360

(Mich. 1986); Vasilakis v. Trott & Trott, P.C., No. 306122, 2012 WL 5854363, at *6 (Mich. Ct.

App. Nov. 15, 2012), leave to appeal denied, 836 N.W.2d 165 (2013). Campbell’s complaint

alleges that she was harmed by “[t]he negligent actions of Defendant Fannie Mae in proceeding

with foreclosure publication and the Sheriff’s Sale without completing a proper investigation and

complying with the federal guidelines of Plaintiff’s modification evaluation.” R. 1-2 at Page ID

#21–22.     As previously discussed, however, Nationstar could still legally foreclose on

Campbell’s property even if Nationstar and Campbell had met to discuss a loan modification.

Mich. Comp. Laws § 600.3205c. The injury suffered by Campbell—foreclosure—was therefore

not “caused” by Fannie Mae’s alleged failure to adhere to HAMP guidelines.




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No. 14-1751, Campbell v. Nationstar Mortgage, et al.

       HAMP does not provide plaintiffs with a private right of action, and Campbell has failed

to plead essential elements of a negligence claim against Fannie Mae. Accordingly, the district

court properly dismissed Campbell’s negligence claim.

                                    IV. CONCLUSION

       For these reasons, we AFFIRM the judgment of the district court.




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