Facts

Tom Casault and several other plaintiffs filed a putative class action against Federal National Mortgage Association aka FNMA and/or Fannie Mae, and others in connection with mortgage loans.

After plaintiffs' second amended complaint was dismissed without prejudice, plaintiffs filed a third amended complaint, in which they alleged that defendants committed fraud in connection with potential modifications of their loans.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that defendants deceptively and unfairly misled borrowers in regards to the loan modification process through offers of mortgage modification assistance. Plaintiff claimed that defendants negligently performed their duty of care to borrowers during the administration of modification review, which was part of an overall fraudulent scheme to maximize their profitability. Plaintiffs contended that defendants failed to disclose that they never intended to modify their loans, and were prohibited from doing so by the terms of the governing servicing contracts. Plaintiffs alleged that their homes were then foreclosed as a direct result of the alleged misconduct during the loan modification process. Plaintiffs brought causes of action for fraud, violation of California Business and Professions Code Section 17200 et sec., and violation of the California Rosenthal Fair Debt Collection Practices Act, California Civil Code Section 1788 et seq.

DEFENDANTS' CONTENTIONS:
Defendants moved to dismiss, arguing that plaintiffs had not plausibly alleged facts necessary to support any of the claims for relief. Defendants argued that plaintiffs' foreclosures were caused by their own failure to make payments on their mortgage loans, and not the result of any of defendants' conduct. Defendants claimed that plaintiffs failed to allege the necessary elements of all of their claims.

Result

The court dismissed the case with prejudice, finding that plaintiffs' had failed to show that the foreclosures were due to a reliance on a misrepresentation, and not due to plaintiffs' failure to pay their mortgages. The court dismissed plaintiffs' section 17200 claim because they had not experienced any injury. The court also dismissed plaintiff's Rosenthal Act claim, finding that plaintiffs had failed to provide sufficient facts to plausibly allege that defendants were debt collectors.