Thompson v. Bank Of America National Association

Case No. 14-10560 (5th. Cir. April 21, 2015)
5th Circuit AFFIRMED district court grant of summary judgment for bank and held the bank did not waive its right to foreclose and did not make any actionable misrepresentation. The 5th Circuit rejected a theory of waiver based on inconsistent behavior when the bank agreed to and postponed foreclosure 12 times while a modification application was pending because the deed of trust explicitly disclaims waiver. Bank also did not violate the Texas Finance Code prohibition on "misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting the consumer debt's status in a judicial or governmental proceeding" when it stated the loan modification was under review and a payment plan was being created because those statements do not relate to the character of the debt. The 5th Circuit also rejected debtor's claim that these statements violated the general catch-all clause in the Texas Finance Code that prohibits false representations or deceptive means to collect a debt because the communications were about a modification and do not concern collection of a debt under Section 392.304(a) (19) of the Texas Finance Code.
Procedural context:
In a diversity case, District court granted bank's motion for summary judgment dismissing debtors' claims that bank waived foreclosure on the basis of bank's inconsistent behavior in foreclosure process and for violations of Texas Finance Code.
Bank received a loan modification application from debtor. During process of considering application to modify loan and gather documents to support modification request, bank agreed to and did postpone foreclosure 12 times before finally foreclosing on property. During the process, debtors were told that modification was pending, that a payment plan was being prepared and additional documents were needed. After foreclosure, Debtors filed a number of state-law claims and removed to federal court and alleged that because the bank agreed to and did postpone foreclosure 12 times that the bank's actions constituted waiver. The district court granted bank's summary judgment and debtors appealed.
Reavley, Smith and Graves, Circuit Judges

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