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Case Law: Garmou v. Kondaur Capital Corp.


In the case of Garmou v. Kondaur Capital Corp., which was heard in the United States District Court, E.D. Michigan, Southern Division, the defendants’ motion for summary judgment was granted in part with respect to the plaintiff’s federal claims, and dismissed and terminated state law claims.

Here are the facts of the case:

  • Plaintiff Garmou was granted a mortgage on a Michigan property. The mortgage changed hands several times over the next 5.5 years, ending with Kondaur Capital Corporation.
  • The plaintiff was awarded a loan modification from Chase, but was still only able to make a few more monthly payments before defaulting again. The plaintiff was shortly thereafter diagnosed with cancer and began chemotherapy.
  • Unable to work, the plaintiff informed Chase of his new circumstances and was advised to submit a second loan modification application. While it was under review, he received a letter from the defendant informing him that the mortgage was held by Kondaur and that he would need to start the loan modification process over again and resubmit all documents directly to Kondaur. He was also encouraged to apply for the State of Michigan’s Hardest Hit Fund, and was initially approved to receive $30,000 in funding to help save his home from foreclosure. However, he was soon notified that he was not eligible for the program because his lender had objected on the grounds that he needed more income to qualify for the loan modification. Two days later, the defendant initiated foreclosure actions on the property. The plaintiff responded by filing a lawsuit.
  • The plaintiff alleges the following:
    • Violations of RESPA
    • Violations of Michigan foreclosure laws
    • Fraud in the inducement
    • Quiet title
    • Slander of title
    • Promissory estoppel
    • Breach of covenant of good faith and fair dealing
    • Relief from sheriff sale and /or set aside foreclosure
    • Violations of the Fair Debt Collection Practices Act (FDCPA)
    • Declaratory and injunctive relief

The defendant raised the following objections to the RESPA violations: 1) they claimed that the regulation did not apply to them because the plaintiff sought and received a loan modification in 2013 (the court disagreed), 2) the plaintiff did not send an application to Kondaur, and 3) the plaintiff did not submit his application in a timely manner before the foreclosure sale (the court sided with Kondaur).

As far as the FDCPA violations go, the court agreed that the plaintiff did not present sufficient evidence to show that the defendant violated any part of the act’s provisions. Therefore, they granted the defendant’s motion to dismiss on this count.

Having concluded that the defendant was entitled to summary judgment in the RESPA and FDCPA claims, the court terminated the remaining counts of Fraud in the Inducement, Promissory Estoppel, and Breach of Covenant as moot.