4th Circuit: Haylett v. Wells Fargo Bank, N.A.- No Private Right of Action for HAMP Denial

Summary: After falling delinquent on their mortgage payments to Wells Fargo in early 2010, the Hayletts sought a HAMP modification. After being supplied with initial documentation, Wells Fargo requested further information from the Hayletts on March 1, 2010, allowing ten days to respond. The Hayletts provided the requested documents on March 22, 2010, but Wells Fargo denied the request and proceeded to foreclosure. The Hayletts brought suit alleging breach of implied-in-fact contract, negligence, violations of the Maryland Consumer Protection Act ("MCPA"), negligent misrepresentation, and common law fraud. All causes of action were dismissed by the district court which held that absent a Trial Period Plan (“TPP”) there was no privity of contract on which such claims could be based. On appeal, the Hayletts argued that Wells Fargo has, by agreeing to participate in HAMP, bound itself to comply with the “standard of care” in processing applications. The Court of Appeals held, however, that there was no conduct sufficient to constitute a "meeting of the minds" evidencing a contract, implied-in-fact or otherwise, with the Hayletts. Wells Fargo’s agreement with the U.S. Treasury was an agreement between the bank and the Treasury, an agreement to which the Hayletts were neither a party nor which they had authority to enforce. The MCPA claim, namely that it was a misrepresentation to require additional pay stubs when two had already been provided, failed since the Hayletts had failed to timely comply with a reasonable request. Additionally, the both the MCPA and common law causes of action, “which sounds in fraud”, is subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), including "‘the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.’" Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999). The complaint filed by the Hayletts failed to rise to this standard. For a copy of the opinion, please see: Haylett v Wells Fargo- No Private Right of Action for HAMP Denial.pdf