Sutton v. Chung et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Ann Sutton,
Plaintiff,
v.
John Chung and Idaho Housing
& Finance Association,
Defendants.
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Civil Action H-25-2639
MEMORANDUM AND RECOMMENDATION
This case has been referred to the undersigned magistrate
judge pursuant to 28 U.S.C. § 636(b)(1). ECF No. 19. Pending
before the court are Defendants’ Motion to Dismiss, Plaintiff’s
Motion for a Preliminary Injunction, Plaintiff’s Motion to Compel
Supplemental 	Rule 	7.1 	Disclosure, 	and 	Plaintiff’s 	Motion 	for
Judicial Notice of Public SEC Filings. The court recommends that
Defendants’ Motion to Dismiss, ECF No. 32, be GRANTED, and
that Plaintiff’s Motion for a Preliminary Injunction, ECF No. 17,
be DENIED. Plaintiff’s Motion to Compel Supplemental Rule 7.1
Disclosure, and Motion for Judicial Notice of Public SEC Filings,
ECF Nos. 23 and 24, are DENIED as MOOT.
1. Background
Plaintiff Ann Sutton, proceeding pro se, alleges multiple
claims related to the pending foreclosure on her home at 15700 Del
Norte Drive, Conroe, Texas 77306 (the property). See First Am.
Compl., ECF No. 15 at 4. Sutton filed suit in this court on June 6,
2025. ECF No. 1. Sutton attached thirteen exhibits to her Original
Complaint, which she incorporated into her Amended Complaint
along with two additional exhibits. ECF Nos. 7, 15, 18. Sutton
states that Exhibit 1 attached to her Complaint is the promissory
note she executed when she purchased her residence (the Note).
United States District Court
Southern District of Texas
ENTERED
February 10, 2026
Nathan Ochsner, Clerk
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ECF No. 1 at 6. The attachment, however, appears to include only
page one of two of the Note, as well as pages one and two of ten of
the Deed of Trust that she executed when she purchased her home
(the Deed of Trust). ECF No. 7 at 3–5. In its response, IHFA
attached full copies of both the Note and the Deed of Trust. See
ECF Nos. 32-1 and 32-2. As will be discussed later, the court will
consider 	in 	its 	analysis 	the 	documents 	IHFA 	attached 	to 	its
response. 	Thus, 	the 	following 	facts 	are 	taken 	from 	Sutton’s
Amended Complaint, Sutton’s exhibits, and IHFA’s attachments.
In April 2021, Sutton obtained a loan and executed the Note
in the amount of approximately $215,023. ECF No. 15 at 4. The
Note was secured by a lien on the property, described in the Deed
of Trust. Id. The lender named in the Note was Inspire Home
Loans, Inc. Sutton alleges that, shortly after the loan’s origination,
it 	was 	transferred 	to 	Defendant 	Idaho 	Housing 	& 	Finance
Association d/b/a HomeLoanServ (IHFA). Id. Sutton alleges that
she was not properly informed of the transfer. Id. Sutton also
alleges that the “loan was further securitized or transferred into a
trust governed by a Pooling and Servicing Agreement (PSA)—
again without any notice to Plaintiff.” Id.
Between 	April 	and 	August 	2024, 	Sutton 	sent 	multiple
requests to IHFA, including a “Revocation of Power of Attorney”
and 	various 	requests 	for 	information, 	which 	she 	refers 	to 	as
“Qualified 	Written 	Requests 	and 	Debit 	Validation 	Requests”
seeking all manner of information, including evidence of IHFA’s
legal authority to collect or enforce the loan and production of the
original Note bearing a wet signature. ECF No. 15 at 4. Sutton
alleges that IHFA failed to provide a valid assignment of the Deed
of Trust, a certified copy of the original promissory Note with
proper endorsements, the name and contact information of the
current creditor, and documentation showing compliance with the
applicable PSA. Id. at 5.
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Attached as Exhibit 9 to Sutton’s Amended Complaint is a
letter from HomeLoanServ to Sutton dated July 18, 2024. ECF
No. 7 	at 	33–36. 	The 	letter 	contradicts 	many 	of 	Sutton’s 	own
allegations. The letter shows the loan number, and states that it is
a response to a request received on July 11, 2024. The letter states
that HomeLoanServ is a department of Idaho Housing & Finance
Association and is acting as servicer of the mortgage. Id. at 34. The
letter includes HomeLoanServ’s email address, mailing address,
and a phone number for Sutton to call with any questions. Id. In
answer to Sutton’s query about whether IHFA had possession of
the 	original 	promissory 	note, 	the 	letter 	states 	that
“HomeLoanServ has the original Promissory Note.” Id. The letter
further states that “HomeLoanServ is the Note Holder of [Sutton’s]
loan.” Id. HomeLoanServ explained in the letter that Sutton’s
obligation under the note had not been discharged and that her
loan was in foreclosure due to default. Id. Attached to the letter
was a copy of the original Note. Id. at 35–36. The letter encouraged
Sutton to call to “discuss possible mitigation options that may be
available for your loan to avoid a foreclosure sale.” Id. at 34.
Exhibit 10 to Sutton’s Amended Complaint is a document
titled Assignment of Deed of Trust. ECF No. 7 at 37. The document
shows that on July 18, 2024, MERS, as beneficiary under the Deed
of Trust, as well as nominee for Inspire Home Loans, Inc., assigned
its interest in the Deed of Trust to IHFA. Id. The second page of
the 	exhibit 	shows 	that 	the 	assignment 	was 	recorded 	in 	the
Montgomery County property records on July 24, 2024. Id. at 38.
IHFA initiated foreclosure proceedings. ECF No. 15 at 5.
Sutton does not allege when that took place, but it appears from
the context of the letter attached as Exhibit 9 that IHFA had not
yet begun the foreclosure process as of July 18, 2024, the date of
the 	letter. 	ECF 	No. 	7 	at 	34 	(encouraging 	Sutton 	to 	contact
HomeLoanServ to “avoid a foreclosure sale”). According to Sutton,
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IHFA does not now, and did not at the time of the initial attempted
foreclosure, 	have 	proof 	of 	its 	standing 	or 	legal 	authority 	to
foreclose. Id.
Sutton filed suit in this court on June 6, 2025. ECF No. 1.
Her Amended Complaint, the live pleading in the case, alleges
causes of action for improper servicing and foreclosure without
standing; violations of the Real Estate Settlement Procedures Act
(RESPA), the Fair Debt Collection Practices Act (FDCPA), the
Texas Property Code, the Truth in Lending Act (TILA), the Texas
Business and Commerce Code, and the Fair Credit Reporting Act
(FCRA); fraud and fraud in the factum; and unjust enrichment.
ECF No. 15 at 6–15. Sutton seeks declaratory, injunctive, and
monetary relief. Id. at 13–17. Sutton asserts her claims against
IHFA and John Chung, who is the Chief Financial Officer of IHFA.
The court refers to Chung and IHFA together as IHFA.
IHFA has moved to dismiss all of Sutton’s claims for failure
to state a claim. ECF No. 32. Sutton did not respond to the pending
motion, but the court considers in its analysis her response to
IHFA’s prior motion to dismiss, ECF No. 20.
2. Legal Standards
Rule 12(b)(6) authorizes the court to dismiss a complaint for
“failure to state a claim upon which relief can be granted.” Fed. R.
Civ. P. 12(b)(6). Under Rule 12(b)(6), the court determines whether
the plaintiff’s complaint contains “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable 	inference 	that 	the 	defendant 	is 	liable 	for 	the
misconduct alleged.” Calogero v. Shows, Cali & Walsh, L.L.P.,
970 F.3d 576, 580 (5th Cir. 2020) (quoting Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)). “The plausibility standard is not akin to a
‘probability 	requirement,’ 	but 	it 	asks 	for 	more 	than 	a 	sheer
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possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S.
at 678.
Courts accept “all well-pleaded facts as true” and “view[]
them in the light most favorable to the plaintiff.” Allen v. Walmart
Stores, L.L.C., 907 F.3d 170, 177 (5th Cir. 2018) (quoting Jones v.
Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). “A plaintiff need only
plausibly allege facts going to the ultimate elements of the claim
to survive a motion to dismiss.” Cicalese v. Univ. of Tex. Med.
Branch, 924 F.3d 762, 768 (5th Cir. 2019). “Factual allegations
must be enough to raise a right to relief above the speculative level
. . . on the assumption that all allegations in the complaint are true
(even 	if 	doubtful 	in 	fact).” 	Twombly, 	550 	U.S. 	at 555. 	“[A]
well-pleaded complaint may proceed even if it strikes a savvy judge
that actual proof of those facts is improbable[.]” Id. at 556.
Only statements of fact are to be taken as true. “Threadbare
recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.
Conclusory allegations are “disentitled . . . to the presumption of
truth.” Iqbal, 566 U.S. at 681. Thus, the court, in reviewing the
plaintiff’s complaint, may neither “accept conclusory allegations”
nor 	“strain 	to 	find 	inferences 	favorable 	to 	the 	plaintiffs.”
Southland Sec. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 361
(5th Cir. 2004).
The court liberally construes pro se pleadings. Erickson v.
Pardus, 551 U.S. 89, 94 (2007). When a plaintiff’s complaint fails
to state a claim, the court should generally give the plaintiff a
chance to amend the complaint under Rule 15(a) before dismissing
the action with prejudice, unless doing so would be futile. See Great
Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d
305, 329 (5th Cir. 2002); see also Ayers v. Johnson, 247 F. App’x
534, 	535 	(5th 	Cir. 	2007) 	(“[A] 	district 	court 	acts 	within 	its
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discretion when dismissing a motion to amend that is frivolous or
futile.”).
3. Analysis
To determine whether a 	claim survives a 	Rule 	12(b)(6)
motion to dismiss, the court’s inquiry is usually limited to “(1) the
facts set forth in the complaint, (2) documents attached to the
complaint, and (3) matters of which judicial notice may be taken
under Federal Rule of Evidence 201.” De Leon v. Munoz, No. 24-
40215, 2025 WL 957500, at *7 (5th Cir. Mar. 31, 2025). Documents
that a defendant attaches to a motion to dismiss are considered
part of the pleadings if they are referred to in the complaint and if
they are central to plaintiff’s claim. Collins v. Morgan Stanley
Dean Witter, 224 F.3d 496, 498–99 (5th Cir. 2000); De Leon, 2025
WL 957500, at *7.
Sutton attached portions of the Note and Deed of Trust to
her Original Complaint. ECF No. 7. Sutton incorporates those
exhibits into her Amended Complaint. ECF No. 15 at 20. As
mentioned, IHFA attached full copies of the Note and Deed of
Trust to its Amended Motion to Dismiss. Because the Note and
Deed of Trust are both referred to and are central to Sutton’s
claims, the court considers the full versions of those documents as
submitted by IHFA.
A. Standing to Foreclose
Before turning to each specific cause of action Sutton alleges
in her Amended Complaint, the court will address an issue that
Sutton 	raises 	throughout 	her 	pleadings—whether 	IHFA 	has
standing to foreclose on Sutton’s property. Sutton bakes into all of
her causes of action the notion that IHFA lacks standing. This
argument is based on a misunderstanding of Texas law.
The 	Fifth 	Circuit 	has 	addressed 	and 	rejected 	Sutton’s
arguments in Martins v. BAC Home Loans Servicing, L.P., 722
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F.3d 	249, 	253 	(5th 	Cir. 	2013). 	There, 	Plaintiff 	presented 	an
argument 	“conflating 	ownership 	of 	a 	note 	with 	constitutional
standing.” Martins, 722 F.3d at 252–53. Plaintiff also argued that
the servicer could not foreclose on her home mortgage loan because
(1) the assignment was defective, and (2) even if it was a valid
assignment of the mortgage, the servicer was only assigned the
mortgage, and not the promissory note. Id. at 252–56.
The Fifth Circuit found that Plaintiff’s argument merged
two common theories on which mortgagees in wrongful-foreclosure
cases often attempt to rely: the “show-me-the-note”1 theory and the
“split-the-note” theory. Martins, 722 F.3d at 253. The show-me-
the-note theory “posits that to foreclose, a party must produce the
original note bearing a ‘wet ink signature.’” Id. The split-the-note
theory is that the foreclosing “party must hold both the note and
the deed of trust.” Id. at 254.
The court rejected both theories. It held that in Texas, “[t]he
original, signed note need not be produced in order to foreclose.”
Martins, 722 F.3d at 254. Additionally, it held that “where the
foreclosing party is a mortgage servicer, and the mortgage has
been properly assigned[, t]he party to foreclose need not possess
the note itself.” Id. at 255.
In 	Martins, 	the 	evidence 	showed 	“a 	signed, 	notarized
assignment document [from MERS to Defendant] that had also
been recorded by the county clerk.” Id. at 252. The court found that
Plaintiff’s argument failed, and that there was “no doubt” that the
mortgage was transferred. Id. at 252–53.
The 	same 	is 	true 	here. 	Much 	like 	the 	homeowner’s
arguments in Martins, Sutton’s arguments merge common legal
theories and principles. Sutton attached to her complaint the
1 According to Sutton, she is not asserting a “show-me-the-note” theory. ECF No. 20 at 3.
Rather, she challenges “whether Defendants possess enforceable rights under Texas law.” Id.
Sutton argues that if the Note and Deed are split, the lien may be void. Id.
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Assignment 	of 	the 	Deed 	of 	Trust, 	which 	was 	recorded 	in
Montgomery County. ECF No. 7 at 37–38. The Assignment states
that MERS assigned and transferred the Deed of Trust for the
property to IHFA. Id. at 37. Sutton’s mortgage was transferred to
IHFA. IHFA need not produce the wet-ink signature to foreclose.
Martins, 722 F.3d at 253–54. Also, Sutton’s argument under the
“split-the-note” 	theory 	is 	not 	supported 	under 	Texas 	law. 	Id.
at 256.
The 	court 	turns 	to 	each 	count 	of 	Sutton’s 	Amended
Complaint.
B. Count 1: “Improper Servicing and Foreclosure
without Standing”
Sutton alleges multiple state and federal statutory causes of
action in “Count 1” of her Amended Complaint, which is titled
“Improper 	Servicing 	and 	Foreclosure 	without 	Standing.” 	In
addition to her standing theory, Sutton also alleges that IHFA
failed 	to 	respond 	to 	her 	requests 	for 	various 	documents 	and
information (including a copy of the Assignment of the Deed of
Trust, the original wet-ink promissory note, the name and contact
information of the current loan owner, and documentation showing
compliance with the PSA). ECF No. 15 at 6–7. She alleges that
IHFA has violated the Real Estate Settlement Procedures Act
(RESPA), the Fair Debt Collection Practices Act (FDCPA), and
Texas Property Code § 51.002.
i. 	RESPA 12 U.S.C. § 2605(e)
Sutton alleges that IHFA violated RESPA § 2605(e). ECF
No. 15 at 6–7. Sutton alleges that she submitted multiple Qualified
Written Requests to IHFA under RESPA and that IHFA failed to
adequately respond to her requests. ECF No. 15 at 6–7. In Sutton’s
“Notice of Intent to Sue,” attached to her Complaint, she states
that IHFA provided her with a copy of the Note and account
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statements. ECF No. 7 at 23. Sutton also includes a response from
IHFA to her July 11, 2024, request for information. ECF No. 7
at 33–36. In that response, IHFA informed Sutton that it holds her
Note and included a copy of the Note with the letter. Id. It appears
that most of the documents and information that Sutton complains
about not receiving are actually attached to her pleadings.
To state a viable claim under § 2605(e), a plaintiff must show
that their correspondence met the requirements of a QWR, that
defendant failed to make a timely response, and that this failure
caused plaintiff actual damages. Williams v. Wells Fargo Bank,
N.A., 560 F. App’x 233, 241–42 (5th Cir. 2014). Sutton has not
sufficiently alleged any element of her claim.
To allege the first element of her claim, Sutton must allege
that her correspondence met the requirements of a QWR. To
qualify as a valid QWR, a request must relate to the “servicing” of
the loan. 12 U.S.C. § 2605(e)(1)(A); In re Parker, 655 F. App’x 993,
997–98 	(5th 	Cir. 	2016). 	“Servicing” 	means 	“receiving 	any
scheduled periodic payments . . . and making the payments of
principal 	and 	interest[.]” 	12 	U.S.C. 	§ 	2605(i)(3). 	A 	borrower’s
request is not a valid QWR where it seeks “proof of [the servicer’s]
authority to collect payments under the promissory note and deed
of trust[.]” In re Parker, 655 F. App’x at 997–98. Also, because the
request must relate to servicing, general requests for information
are insufficient and do not qualify as QWRs. Hollenshead v. Bank
of Am., N.A., No. 18-CV-724, 2020 WL 4615096 (E.D. Tex. May 19,
2020), R. & R. adopted, 2020 WL 3496335 (E.D. Tex. June 29,
2020). “Courts routinely find that such letters cannot support a
RESPA claim under § 2605(e).” Abor v. Planet Home Lending LLC,
No. 24-CV-2205, 2025 WL 2945855, at *9 (N.D. Tex. Sept. 17,
2025).
Sutton’s requests to IHFA do not relate to the servicing of
the loan and are not valid QWRs. In her requests, Sutton seeks to
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“verify the legitimacy of the loan transfer” and asks IHFA for proof
of ownership and standing. See, e.g., ECF No. 7 at 8, 19; see also
Sutton’s Exhibits 3–6, ECF No. 7 at 8–26. Such requests are not
QWRs. In re Parker, 655 F. App’x at 997–98; Abor, 2025 WL
2945855, at *9. As such, Sutton has not alleged the first element
of her RESPA claim.
Assuming that Sutton’s letters were valid QWRs, Sutton has
failed to show the second element of her RESPA claim, which
requires her to show that IHFA failed to make a timely response.
As discussed, there is no requirement for IHFA to provide a wet-
ink signature. Sutton’s Exhibit 9 shows that IHFA did respond to
her requests. IHFA told her that it held the Note, that she was in
default, and that she should contact HomeLoanServ. ECF No. 7
at 34. The letter provided contact information and the company’s
hours of operation. Id. IHFA also attached to its Amended Motion
to Dismiss another letter sent on July 25, 2024, containing the
same information as the July 18, 2024 letter. ECF No. 32-3. Sutton
did not respond to the Amended Motion, so the court considers the
second letter in its analysis.
As to the third element, “to survive a motion to dismiss
under Rule 	12(b)(6)[,] a 	plaintiff must allege actual 	damages
resulting from a violation of § 2605.” Avila v. JPMorgan Chase
Bank, N.A., No. H-14-3502, 2015 WL 1648940, at *3 (S.D. Tex. Apr.
13, 2015) (citing 12 U.S.C. § 2605(f)(1)(A)). In other words, a
plaintiff must plead facts sufficient “to establish a causal link
between the financing institution’s violation and their injuries.”
Wilson v. Deutsche Bank Tr. Co. Ams., 2020 WL 3452298, at *7
(N.D. Tex. June 24. 2020) (citing Law v. Ocwen Loan Servicing,
L.L.C., 	587 	F. 	App’x 	790, 	795 	(5th 	Cir. 	2014)). 	Conclusory
allegations of actual damages are not sufficient. Thomas v. Ocwen
Fin. Corp., No. 19-685, 2020 WL 13413468, at *3 (S.D. Tex. Feb.
27, 2020) (citing Avila, 2015 WL 1648940, at *3).
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Sutton does not allege facts sufficient to establish a causal
link between IHFA’s alleged failure to adequately respond and
Sutton’s 	injuries. 	Sutton 	makes 	general 	conclusory 	assertions
throughout her Amended Complaint that IHFA’s conduct caused
her harm. Sutton’s complaint alleges that she suffered emotional
distress 	and 	mental 	anguish 	(including 	confusion, 	financial
uncertainty, anxiety, and “loss of confidence in the 	mortgage
process”), harmed credit, financial harm, misapplied payments,
and litigation expense. ECF No. 15 at 8, 10, 12, 14. It appears that
Sutton has all of the documents and information she complains
about not receiving, so it is unclear how she suffered any damages
at all. Litigation fees and expenses are not actual damages under
RESPA. Cross v. Bank of New York Mellon, 790 F. App’x 647, 648
(5th Cir. 2020).
A court may award up to $2,000 in statutory damages under
RESPA if the defendant engaged in a “pattern or practice of
noncompliance.” 12 U.S.C. 2605(f)(1)(B). Sutton does not allege
any facts showing that IHFA engaged in a pattern or practice of
noncompliance. Cf. Allen v. Wells Fargo Bank, Nat’l Ass’n, No.
3:16-CV-0249, 2017 WL 3421067 (N.D. Tex. Aug. 9, 2017). Sutton’s
conclusory assertion that IHFA’s “conduct reflects a pattern of
improper 	servicing 	practices, 	deception, 	and 	disregard 	for
consumer protection laws[,]” ECF No. 15 at 5, 7, is insufficient to
state 	a 	claim 	for 	statutory 	damages 	under 	RESPA. 	Sutton’s
pleading is insufficient to state a claim for a violation of RESPA,
and IHFA’s motion should be granted as to Sutton’s RESPA claim.
ii. FDCPA 15 U.S.C. § 1692g
Sutton alleges that IHFA violated multiple provisions of the
FDCPA, 15 U.S.C. § 1692g. ECF No. 15 at 6–7. Her claim appears
to rest on the “split-the-note” and “show-me-the-note” theories,
which the court has already addressed. She states that IHFA’s
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conduct 	violates 	“FDCPA, 	for 	attempting 	to 	collect 	without
validating the debt.” ECF No. 15 at 7. As discussed, however, IHFA
provided a valid response to Sutton’s requests for information and
IHFA has authority to foreclose.
The court also notes that Sutton has not shown that IHFA
falls within the scope of the FDCPA. Section 1692g of the statute
imposes certain obligations on debt collectors. A “debt collector”
under the FDCPA is “any person . . . who regularly collects or
attempts to collect . . . debts owed or due or asserted to be owed or
due another.” 15 U.S.C. § 1692(a)(6). However, mortgage lenders
and 	servicers 	are 	generally 	not 	“debt 	collectors” 	within 	the
meaning of the FDCPA. Montgomery v. Wells Fargo Bank, N.A.,
459 F. App’x 424, 428–29 n.1 (5th Cir. 2012); Perry v. Stewart Title
Co., 756 F.2d 1197, 1208 (5th Cir. 1985). A mortgage lender or
servicer may be a debt collector for purposes of the FDCPA if it
becomes a mortgage lender or servicer after the debt was in
default. Smith v. First Choice Loan Services Inc., No. 20-CV-00321,
2020 WL 5759967, at *3 (N.D. Tex. Sept. 28, 2020). IHFA does not
fall within the definition of “debt collector” based on the pleadings
before the court, given that IHFA was the servicer before the
default occurred. IHFA’s motion should be granted as to Sutton’s
FDCPA claim.
iii. 	Texas Property Code § 51.002
Sutton argues that IHFA violated the Texas Property Code
§ 51.002 by attempting to foreclose without lawful authority. ECF
No. 15 at 7. Again, based on Sutton’s own pleadings, IHFA appears
to have authority to foreclose. In any event, § 51.002 does not
create a private right of action.2 Carey v. Fargo, No. 15-1666, 2016
2 “[C]ourts have construed claims for violation of section 51.002 as claims for wrongful
foreclosure[.]” See Carey, 2016 WL 4246997, at *3 (collecting cases). Sutton has not alleged
that any foreclosure sale has taken place. Thus, she does not state a claim for wrongful
foreclosure. See Bishop Glob. Family Tr. v. Select Portfolio Servicing, Inc., No. 25-CV-0560,
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WL 4246997, at *3 (S.D. Tex. Aug. 11, 2016) (citing Ashton v. BAC
Home Loans Servicing, L.P., No. 13-810, 2013 WL 3807756, at *4
(S.D. Tex. July 19, 2013)). IHFA’s motion should be granted as to
Sutton’s claim under the Texas Property Code § 51.002.
C. Count 2: Truth in Lending Act Violations and
Lack of Standing to Enforce the Note and Deed
of Trust3
i. 	TILA 15 U.S.C. § 1641
Sutton 	alleges 	that 	IHFA 	violated 	TILA 	by 	failing 	to
“identify the true owner or provide documentation establishing
[its] lawful authority to collect on or enforce the loan.” ECF No. 15
at 7–8. Sutton alleges that “Defendant has also presented itself as
the lender in mortgage documents and communications despite
not funding the loan, and has never produced a certified copy of a
properly endorsed, wet-ink original promissory note.” ECF No. 15
at 	8. 	Sutton 	brings 	her 	claims 	under 	15 	U.S.C. 	§§ 1641(f)(2)
and (g).4
TILA § 1641(f) requires that, upon written request by the
obligor, 	“the 	servicer 	shall 	provide 	the 	obligor, 	to 	the 	best
knowledge of the servicer, with the name, address, and telephone
number of the owner of the obligation or the master servicer of the
obligation.” TILA § 1641(g) provides that “not later than 30 days
after the date on which a mortgage loan is sold or otherwise
transferred or assigned to a third party, the creditor that is the
new owner or assignee of the debt shall notify the borrower in
writing of such transfer[.]” Again, Sutton’s claims are undermined
by the very documents she attached to her Amended Complaint.
IHFA/HomeLoanServ 	is 	the 	holder 	of 	the 	note; 	IHFA 	is 	the
2025 WL 1918848, at *3 (S.D. Tex. July 10, 2025) (holding that a foreclosure sale is a
precondition to recovery for wrongful foreclosure).
3 The court addressed Sutton’s standing arguments above and need not address them again.
4 Sutton also generally cites 15 U.S.C. § 1601 et seq. ECF No. 15 at 8.
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assignee of the deed of trust; and all of that information has been
provided to Sutton. Again, to the extent that Sutton’s TILA claim
is 	based 	on 	the 	“split-the-note” 	and/or 	“show-me-the-note”
theories, the court has already disposed of those theories. Sutton
has failed to plead a TILA claim.
The court also notes that claims under § 1641(f) and (g) must
be brought within one year and 30 days after the assignment of
which plaintiff allegedly did not receive notice. 15 U.S.C. § 1640(e);
Beltran v. Fed. Home Loan Corp., No. 23-CV-3999, 2025 WL
1843726, at *3 (S.D. Tex. Apr. 21, 2025). Sutton alleges that
“[s]hortly after origination [which occurred in April 2021], the
contract was transferred to Defendant Home Loan Serv, to which
Plaintiff 	was 	not 	notified 	beforehand 	nor 	properly 	informed
afterward.” ECF No. 15 at 4. To the extent that Sutton alleges lack
of notice of an assignment that took place in 2021, her claim, which
she brought in June 2025, is time-barred. IHFA’s motion should be
granted as to Sutton’s TILA claim.
ii. Texas Business and Commerce Code § 3.204
Sutton alleges that IHFA violated the Texas Business and
Commerce Code § 3.204(a) because “an allonge [must] be ‘firmly
affixed’ to the original instrument to be valid.” ECF No. 15 at 8.
However, Chapter 3 of the Texas Business and Commerce Code
does not apply to a mortgage note. Tex. Bus. & Com. Code § 3.104,
cmt. 2 (“Article 3 is not meant to apply to contracts for . . . the sale
or lease of real property . . .”); Bables v. Citimortgage, Inc., No. 16-
CV-104, 2016 WL 1450201, at *2 (E.D. Tex. Apr. 13, 2016), R. & R.
adopted, 2016 WL 2962681 (E.D. Tex. May 23, 2016); Clapp v.
Wells Fargo, Nat’l Ass’n, No. 14-CV-035, 2014 WL 1677805 (N.D.
Tex. Apr. 28, 2014). In any event, it appears that the allonge was
firmly affixed to the Note. See ECF No. 32-1 at 2–3. Again, to the
extent that Sutton’s claim under section 3.204 is based on the
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“split-the-note” 	and/or 	“show-me-the-note” 	theories, 	the 	claim
fails. IHFA’s motion should be granted as to Sutton’s claim under
the Texas Business and Commerce Code § 3.204.
D. Count 3: Violation of the Fair Credit Reporting
Act
Sutton alleges that IHFA violated the FCRA, 15 U.S.C.
§ 1681s-2(b), when it “reported the loan as delinquent, despite
being notified of Plaintiff’s active dispute regarding the debt’s
validity and Defendant’s legal authority to collect or enforce it.”
ECF No. 15 at 9–10.
“When a credit reporting agency notifies a ‘furnisher’ of
credit information of a consumer dispute, the furnisher must
‘conduct an investigation,’ ‘report the results of the investigation,’
and ‘modify 	. . . 	delete . 	. . 	or . . 	. permanently 	block’ any
inaccuracies.” Schultz v. HomeBridge Fin. Services, Inc., No. 24-
50193, 2025 WL 1467431 (5th Cir. May 22, 2025) (quoting 15
U.S.C. § 1681s-2(b)(1)(A)–(E)). “Liability under the FCRA attaches
only after the furnisher of credit information has received notice of
a dispute from a credit reporting agency[.]” Id.
Sutton’s Amended Complaint is entirely conclusory. She
merely tracks the elements of the statute without providing any
facts. She does not say when or how she notified a credit reporting
agency of any dispute. She does not say when or how a credit
reporting agency notified IHFA of a dispute. She does not show
that any information provided by IHFA to any credit reporting
agency was inaccurate. She does not show how she was harmed by
any failure on IHFA’s part. IHFA’s motion to dismiss Sutton’s
FCRA claim should be granted.
E. Count 4: Fraud and Fraud in the Factum
The 	gist 	of 	Sutton’s 	fraud 	claims 	is 	that 	IHFA 	made
misrepresentations when it held itself out as having authority to
collect payments on the loan and then to foreclose on the Note and
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Deed of Trust. She also claims to have been defrauded when IHFA
failed 	to 	provide 	accurate 	information. 	She 	states 	that
“Defendant’s objective was to extract payments without proving
standing, while avoiding public disclosure of the loan’s securitized
status.” ECF No. 15 at 11. In other words, Sutton is merely re-
casting her statutory claims as fraud. Again, IHFA had and now
has authority to foreclose. Sutton’s own documents demonstrate
this.
To allege a claim of fraud under Texas law, a plaintiff must
allege: (1) a material misrepresentation; (2) the representation
was false; (3) the defendant either knew the representation was
false or recklessly asserted it without knowledge of its truth; (4)
the defendant intended that the plaintiff should act upon the
representation; 	(5) 	the 	plaintiff 	acted 	in 	reliance 	on 	the
representation; and (6) the plaintiff was injured as a result. Harris
Cnty. Tex. v. MERSCORP Inc., 791 F.3d 545, 558 (5th Cir. 2015)
(quoting Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of
Am., 341 S.W.3d 323, 337 (Tex. 2011)). Fraud in the factum is a
misrepresentation about the nature of a writing that a person
signs with neither knowledge nor reasonable opportunity to obtain
knowledge 	of 	its 	character 	or 	essential 	terms. 	Henderson 	v.
IberiaBank, No. 21-CV-3212, 2022 WL 2792218, at *9 (N.D. Tex.
June 23, 2022), 	R. 	& R. 	adopted, No. 21-CV-3212, 2022 WL
2790644 (N.D. Tex. July 15, 2022), aff’d, No. 22-10773, 2023 WL
2733414 (5th Cir. Mar. 31, 2023).
Sutton’s complaint does not allege facts to support a claim
for fraud, fraud in the factum, or fraud in the inducement. Her
claims are conclusory and rebutted in their entirety by her own
documents.
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F. Count 5: Unjust Enrichment
Sutton alleges a claim for unjust enrichment. According to
Sutton, IHFA “received and retained funds paid by Plaintiff that
it had no legal right to collect.” ECF No. 15 at 12–13. Again, IHFA
had authority to collect on the note and to foreclose. There are no
facts to support a claim for unjust enrichment. Moreover, under
Texas law, “an unjust enrichment claim is ‘unavailable when a
valid, express contract governing the subject matter of the dispute
exists[.’]” Matter of KP Eng’g, L.P., 63 F.4th 452, 457 (5th Cir.
2023). 	Because 	there 	is 	a 	valid, 	express 	contract 	governing
Sutton’s loan, IHFA’s motion should be granted as to Sutton’s
unjust enrichment claim.
G. Count 6: Declaratory and Injunctive Relief
Because the court finds that all of Sutton’s claims should be
dismissed, 	she 	cannot 	obtain 	declaratory 	or 	injunctive 	relief.
IHFA’s motion should be granted as 	to Sutton’s requests for
declaratory and injunctive relief.
H. Leave to Amend is Denied
“Dismissing an action after giving the plaintiff only one
opportunity to state his case is ordinarily unjustified.” Davoodi v.
Austin Indep. Sch. Dist., 755 F.3d 307, 310 (5th Cir. 2014) (quoting
Jacquez v. Procunier, 801 F.2d 789, 792 (5th Cir. 1986)). If the
plaintiff seeks leave to amend, she “must give the court at least
some notice of what . . . her amendments would be and how those
amendments would cure the initial complaint’s defects.” Scott v.
U.S. Bank Nat’l Ass’n, 16 F.4th 1204, 1209 (5th Cir. 2021) (citation
omitted). The court may deny leave “[i]f the plaintiff does not
provide a copy of the amended complaint [or] explain how the
defects could be cured[.]” Id. (citation omitted). The court may also
deny leave to amend when amendment would be futile or when the
plaintiff chooses to stand on her complaint and argues that it
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satisfies 	the 	pleading 	requirements. 	See 	Khoury 	v. 	Thota,
No. 20-20578, 2021 WL 3919248, at *4 (5th Cir. Sep. 1, 2021)
(affirming the district court’s denial of leave to amend when the
plaintiff 	chose 	to 	stand 	on 	his 	complaint 	and 	argued 	that 	it
satisfied the pleading requirements); Wimm v. Jack Eckerd Corp.,
3 F.3d 137, 139 (5th Cir. 1993) (discussing futility of amendment
as justification for denying leave to amend).
Here, Sutton amended her complaint after IHFA filed its
first Motion to Dismiss. Sutton has neither requested to amend her
complaint for a second time nor has she responded to IHFA’s
pending Motion to Dismiss. The court has no reason to believe that
Sutton could further amend her First Amended Complaint to
remedy its defects. Amendment would be futile. Therefore, any
request for leave to amend is denied.
I. 	Motion for a Preliminary Injunction
Because the court finds that all of Sutton’s claims should be
dismissed, she cannot obtain a preliminary injunction. Sutton’s
Motion 	for 	a 	Preliminary 	Injunction, 	ECF 	No. 	17, 	should 	be
DENIED.
J. Remaining Motions
Sutton’s 	remaining 	motions, 	the 	Motion 	to 	Compel
Supplemental Rule 7.1 Disclosure and Motion for Judicial Notice
of Public SEC Filings, ECF Nos. 23 and 24, do not affect the court’s
analysis and are DENIED as MOOT.
4. Conclusion
The court recommends that Defendants’ Motion to Dismiss,
ECF 	No. 	32, 	be 	GRANTED, 	and 	Plaintiff’s 	Motion 	for 	a
Preliminary 	Injunction, 	ECF 	No. 	17, 	be 	DENIED. 	Plaintiff’s
Motion to Compel Supplemental Rule 7.1 Disclosure, and Motion
for Judicial Notice of Public SEC Filings, ECF Nos. 23 and 24, are
DENIED as MOOT.
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The 	parties 	have 	fourteen 	days 	from 	service 	of 	this
Memorandum and Recommendation to file written objections. 28
U.S.C. 	§ 636(b)(1); 	Fed. 	R. 	Civ. 	P. 	72. 	Failure 	to 	timely 	file
objections will preclude appellate review of factual findings or legal
conclusions, 	except 	for 	plain 	error. 	See 	Thomas 	v. 	Arn, 	474
U.S. 140, 147–49 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276–
77 (5th Cir. 1988).
Signed at Houston, Texas, on February 10, 2026.
______________________________________
Peter Bray
United States Magistrate Judge
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