Isary Lopez v. Freedom Mortgage Corporation

Summary

The United States District Court for the Southern District of Texas conditionally granted Freedom Mortgage Corporation’s motion to dismiss claims arising from mortgage servicing, escrowed property taxes, and threatened foreclosure. The court dismissed the breach of contract, RESPA claim under 12 C.F.R. § 1024.39, and negligence or negligent misrepresentation claims, while allowing amendment of the RESPA claim under 12 C.F.R. § 1024.41 to plead actual damages. Plaintiff was granted until April 24, 2026, to amend that claim.

Holdings

1. A mortgagor who admits default on the underlying loan cannot maintain a breach-of-contract claim against the mortgagee or servicer based on an alleged subsequent breach of the deed of trust. Lopez therefore failed to state a breach-of-contract claim.
2. 12 C.F.R. § 1024.39 does not provide a private cause of action; Lopez's claim under that regulation therefore failed as a matter of law.
3. A plaintiff seeking relief under 12 C.F.R. § 1024.41 must plead actual damages resulting from the alleged violation. Lopez failed to plead a plausible causal relationship between the alleged violation and her damages, but the defect was potentially curable through amendment.
4. The economic-loss doctrine barred Lopez's negligence or negligent-misrepresentation claim because the alleged losses arose from the contractual mortgage relationship and were not distinct, separate, and independent from the losses recoverable under her breach-of-contract theory.
5. Requests for injunctive relief, attorney's fees, and other damages could not proceed independently because they depended on viable underlying causes of action, all of which failed at the pleading stage.
6. Leave to amend should be granted for the § 1024.41 RESPA claim because the pleading defect might be cured by alleging actual damages and causation, but amendment was not permitted for the breach-of-contract, § 1024.39, or negligence claims because those defects were incurable as pleaded.

Questions Presented

1. Whether Lopez stated a breach-of-contract claim based on alleged violations of Texas Property Code § 51.002 and foreclosure-notice requirements while she admitted that she was in default on the mortgage.
2. Whether Lopez stated a private claim under 12 C.F.R. § 1024.39.
3. Whether Lopez stated a claim under 12 C.F.R. § 1024.41 by alleging actual damages causally resulting from the alleged RESPA violation.
4. Whether the economic-loss doctrine barred Lopez's negligence or negligent-misrepresentation claim.
5. Whether Lopez's requests for injunctive relief, attorney's fees, and other damages could proceed absent a viable underlying substantive claim.
6. Whether Lopez should receive leave to amend her pleading.

Disposition

other