4:25-cv-03004•Holland et al v. Federal National Mortgage Association et al
Holland et al v. Federal National Mortgage Association et al
4:25-cv-03004Txsd15 de mai. de 2026
Texto completo
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION David K. Holland and Valeria Holland, Plaintiffs, v. Federal National Mortgage Association, et al., Defendants. § § § § § § § § § § § § § Civil Action No. 4:25-cv-03004 MEMORANDUM AND RECOMMENDATION On November 7, 2025, Defendant LoanCare, LLC moved to dismiss Plaintiff David K. Holland’s amended complaint, invoking Fed. R. Civ. P. 12(b)(6). Dkt. 51 (moving to dismiss Dkt. 44). 1 Because Holland did not respond, the motion is deemed unopposed. See S.D. Tex. L.R. 7.4. After carefully considering LoanCare’s contentions, Holland’s live pleading, and the applicable law, it is recommended that the motion to dismiss be granted in part and denied in part. 1 Mr. Holland’s wife, Valeria Holland, did not join the amended complaint. See Dkt. 44 at 2 (explaining why Valeria was dropped). She has abandoned her claims. United States District Court Southern District of Texas ENTERED May 15, 2026 Nathan Ochsner, Clerk Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 1 of 22
2 Background This is a mortgage dispute. The following facts, which are taken as true at this stage, come from Holland’s amended complaint—which incorporates his original petition “by reference,” see Dkt. 44 at 3—and the limited universe of extrinsic items that can properly be considered. I. Factual background In July 2012, Holland purchased a home at 12902 Tamarack Bend Lane, Humble, Texas 77346 (the “Property”) with a home equity loan from Lending Solutions, Inc. Dkt. 1-3 at 7. According to Holland, at closing, Lending Solutions did not provide him a written property appraisal or signed acknowledgement of the Property’s fair market value. Dkt. 44 at 5. Holland made monthly payments of $3,088.23 to Ditech Financial until it went bankrupt. Dkt. 1-3 at 11. Around April 1, 2019, Defendant NewRez LLC (“NewRez”) acquired the servicing rights to Holland’s home equity loan, and LoanCare assumed sub-servicing duties. Dkt. 44 at 5. Soon after, NewRez issued a monthly payment statement indicating that Holland owed $25,176.07 by May 1, 2019. Dkt. 1-3 at 11, 123 (PX-22, April 16, 2019 statement). Of that total, $24,550.15 was for past-due payments owed to Ditech Financial between November 2018 and April 2019. Id. On April 24, 2019, Holland mailed NewRez a $4,400 check. Id. LoanCare responded that Holland had paid less than half of the full amount due, and his account was in Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 2 of 22
3 default. Id. at 12, 128 (PX-27, April 30, 2019 LoanCare letter regarding insufficient payment). At some point, Holland’s check was returned. Id. On May 13, 2019, Holland mailed NewRez a letter contesting its calculation and claiming he had paid Ditech Financial $29,118.05 during the disputed period—$3,941 more than he was claimed to owe. Dkt. 1-3 at 12, 129 (PX-28, Holland’s letter disputing figures in the April 16, 2019 statement). His letter attached bank statements purporting to reflect those payments. Id. Holland received no response. Id. On May 22, 2019, Holland mailed NewRez and LoanCare a letter noting that his $4,400 check was returned, referencing his initial dispute letter, and requesting that they correct his account information. Id. at 129, 138 (PX-31, May 22, 2019 letter). Holland did not receive a response. Id. at 13. A monthly statement for June 1, 2019 indicated that Holland owed $28,829.14. Id. at 13. Holland alleges that he submitted a payment of $4,367.35, but the payment was returned. Id. On May 28, 2019, LoanCare sent Holland a notice that his loan was in default because he failed to make monthly payments from September 1, 2018 to May 28, 2019. Id. at 13, 143 (PX-36, LoanCare’s May 28, 2019 letter). Holland responded by sending NewRez and LoanCare a third letter disputing that he was behind on payments and requesting corrections to his account. Id. citing PX-37, letter, and PX-38, certified mail receipt). Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 3 of 22
4 The next monthly statement, for July 1, 2019, stated that Holland now owed $32,482.21. Id. Although Holland tried to submit a $4,367.53 payment, it was returned. Id. On July 9, 2019, LoanCare sent Holland another letter stating that he was in default, which had “resulted in the initiation of foreclosure proceedings to seek resolution of the loan balance.” Id. at 14, 151 (PX-42, July 9, 2019 letter). A few days later, LoanCare confirmed that it received Holland’s notice of error and that “a detailed written response will be sent” within 30 business days. See id. at 14, 153 (PX-43, July 15, 2019 letter). Holland never received a response. Id. at 14. Instead, he received a letter from NewRez’s and LoanCare’s attorneys stating that they were retained to collect the debt. Id. at 15, 157 (PX-46, July 24, 2019 letter). On June 14, 2023, almost two years later, Holland entered into a loan modification agreement to prevent the Property’s foreclosure. Id. at 17, 77 (PX- 11, Loan Modification Agreement). In August 2023, NewRez d/b/a Shellpoint Mortgage Servicing (“Shellpoint”) became the servicer for his home equity loan. Dkt. 44 at 5. On November 15, 2024, Shellpoint filed an application for an expedited order under Texas Rule of Civil Procedure 736 to foreclose on the home equity loan. See Application for an Expedited Order Under Rule 736 On a Home Equity Loan, In re: Order for Foreclosure Concerning 12902 Tamarack Bend Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 4 of 22
5 Lane Humble TX 77346, No. 202480884 (215th Jud. Dist. Ct., Harris Cnty., Tex. Nov. 15, 2024). That application was granted. Order Granting Petitioner’s Application for Expedited Foreclosure Under Tex. R. Civ. Proc. 736, In re: Order for Foreclosure Concerning 12902 Tamarack Bend Lane Humble TX 77346, No. 202480884 (215th Jud. Dist. Ct., Harris Cnty., Tex. May 9, 2025). II. Procedural history On May 15, 2025, Holland and his wife, Valeria Holland (collectively, “the Hollands”), sued NewRez, LoanCare, Shellpoint, and the Federal National Mortgage Association in state court. Dkt. 1-3 at 5. They alleged common-law claims for breach of contract and fraud, and statutory claims under the Texas Debt Collection Act (“TDCA”), Tex. Fin. Code § 392.304; the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692; the Real Estate Settlement and Procedures Act (“RESPA”), 12 U.S.C.A § 2605, and Regulation X, 12 C.F.R. § 1024.35; the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and Regulation Z, 12 C.F.R. § 1026.23; the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 3301 et seq.; plus 12 C.F.R. § 34.43 and the Texas Constitution. See id. at 22-35. They also sought quiet title, declaratory relief, recission of their mortgage agreement, equitable redemption, and a temporary restraining order (“TRO”) and permanent injunction preventing foreclosure. Dkt. 1-3 at 22-27, 38-40. After Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 5 of 22
6 removing the suit to this Court, Dkt. 1, LoanCare filed a motion to dismiss, Dkt. 3, to which Hollands responded, Dkt. 10, and LoanCare replied, Dkt. 13. On August 21, 2025, the Hollands filed an emergency motion for a TRO and preliminary injunction to prevent the scheduled foreclosure from impairing their ability to close on a contract to sell the Property for $720,000. Dkt. 29. Defendants agreed to refrain from foreclosing so that the sale could occur. Dkt. 32. Relatedly, the parties filed a consent to the Property’s sale and agreed that the sole remaining claims would be for monetary damages. Dkt. 36; see also Dkt. 37 at 2 (order allowing closing). Accordingly, the undersigned concluded that the closing mooted the Hollands’ request for injunctive relief. See Dkt. 42 at 2 (October 10, 2025 Memorandum and Recommendation). And because the Property’s sale affected the scope of the Hollands’ claims, the Court granted their motion for leave to amend (Dkt. 20) and denied LoanCare’s motion to dismiss (Dkt. 3) without prejudice. Dkt. 42 at 2-4. David Holland, alone, filed an amended complaint. 2 Dkt. 44 at 2. Holland’s amended complaint “incorporates by reference his Original Petition” and “sets forth additional background facts and claims ….” Id. at 3. The only new claim is a common-law claim for gross negligence. LoanCare filed a motion to dismiss, Dkt. 51, which is ripe for resolution. 2 Although styled as a “Second Amended Complaint,” Dkt. 44 at 1, this is the only (and therefore the first) amended complaint. Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 6 of 22
7 Legal standard Dismissal under Rule 12(b)(6) is warranted if a party fails “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. Rather, “[t]he complaint (1) on its face (2) must contain enough factual matter (taken as true) (3) to raise a reasonable hope or expectation (4) that discovery will reveal relevant evidence of each element of a claim.” See Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009) (analyzing Twombly, 550 U.S. at 555-56). When resolving a Rule 12(b)(6) motion, the court “accept[s] all well- pleaded facts as true and view[s] those facts in the light most favorable to the plaintiffs.” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quotation omitted). Pro se pleadings are liberally construed. Butler v. S. Porter, 999 F.3d 287, 292 (5th Cir. 2021) (citing Haines v. Kerner, 404 U.S. 519, 520-21 (1972) Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 7 of 22
8 (per curiam)). But “regardless of whether the plaintiff is proceeding pro se or is represented by counsel, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.” Prescott v. UTMB Galveston Tex., 73 F.4th 315, 318 (5th Cir. 2023) (quoting Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th Cir. 2002)); see also Chhim v. Univ. of Tex. at Austin, 836 F.3d 467, 469 (5th Cir. 2016) (per curiam) (“[P]ro se plaintiffs must still plead factual allegations that raise the right to relief above the speculative level.”). Analysis I. Holland’s live pleading properly incorporated by reference his original allegations and claims. Before considering LoanCare’s arguments for dismissal, the Court must determine what claims are still part of this suit. LoanCare submits that Holland cannot rely on allegations in his original petition, maintaining that Holland has abandoned all claims not reasserted in his live amended complaint. Dkt. 51 at 3-4. Federal law says otherwise. As a general rule, an amended pleading supersedes and replaces an earlier pleading. See Clark v. Tarrant Cnty., 798 F.2d 736, 740 (5th Cir. 1986). But Federal Rule of Civil Procedure 10(c) provides that “[a] statement in a pleading may be adopted by reference elsewhere in the same pleading or in any other pleading or motion.” Fed. R. Civ. P. 10(c) (emphasis added). Together, Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 8 of 22
9 those principles mean that “[a]n amended complaint supersedes the original complaint and renders it of no legal effect unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleading.” King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (per curiam) (emphasis added); see also, e.g., Middaugh v. Interbank, 528 F. Supp. 3d 509, 537 (N.D. Tex. 2021) (amended complaint explicitly “incorporate[ed] by reference all the causes of actions alleged” in the original complaint); Adger v. TA Operating LLC, 2024 WL 5681959, at *2 (W.D. La. July 14, 2024) (same where amended complaint expressly stated that “Plaintiff otherwise maintains all claims, causes of action and allegations”). Valid incorporation by reference requires “a degree of specificity and clarity which would enable the responding party to easily determine the nature and extent of the incorporation.” New Orleans Ass’n of Cemetery Tour Guides & Cos. v. New Orleans Archdiocesan Cemeteries, 56 F.4th 1026, 1033 (5th Cir. 2023) (quoting Carroll v. Fort James Corp., 470 F.3d 1171, 1176 (5th Cir. 2006)). By its terms, however, Rule 10 does not allow a pleading to incorporate contentions in filings other than pleadings—like briefs or motions. See Fed. R. Civ. P. 10, commentary (making this observation). Holland’s amended complaint declares that it “incorporates by reference his Original Petition” and “sets forth additional background facts and claims ….” Dkt. 44 at 3 (emphasis added). This statement clearly and unambiguously Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 9 of 22
10 incorporates both the allegations and the claims in his state-court petition. See Carroll, 470 F.3d at 1176 (holding that analogous blanket incorporation clause satisfied the specificity requirement). The Court therefore must consider both the allegations and claims in the live complaint and those in the original petition that Holland incorporated. References to Holland’s prior briefing, which cannot be incorporated in a pleading, will be disregarded when resolving the motion to dismiss. See Dkt. 44 at 4 (attempting to incorporate his “Gross Negligence Brief,” Dkt. 10-1). II. Some, but not all, of Holland’s claims against LoanCare should be dismissed. As noted, LoanCare’s motion to dismiss is deemed unopposed pursuant to this Court’s local rules because Holland did not file a response. See S.D. Tex. L.R. 7.4. But “failure to oppose a 12(b)(6) motion is not in itself grounds for granting the motion.” Servicios Azucareros de Venez., C.A. v. John Deere Thibodeaux, Inc., 702 F.3d 794, 806 (5th Cir. 2012). The Court still must consider the merits of a defendant’s motion to dismiss. See, e.g., Webb v. Morella, 457 F. App’x 448, 452 n.4 (5th Cir. 2012) (per curiam); John v. Louisiana, 757 F.2d 698, 709 (5th Cir. 1985) (“[A]lthough we have endorsed the adoption of local rules that require parties to file responses to opposed motions, we have not approved the automatic grant, upon failure to comply with such rules, of motions that are dispositive of the litigation.”). Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 10 of 22
11 Viewing the amended complaint alongside the properly incorporated original petition, see supra Part I, Holland has asserted Texas common-law claims for gross negligence, breach of contract, and fraud; statutory claims under the TDCA, FDCPA, RESPA, TILA, FIRREA; a claim to homestead protections under the Texas Constitution; and a regulatory claim under 12 C.F.R. § 34.43. Holland has also narrowed and limited those claims to “monetary damages[.]” See Dkt. 44 at 2; see also Dkt. 37 at 2 (joint declaration that Plaintiff’s remaining claims seek monetary damages only). LoanCare’s motion to dismiss addresses only a few of those claims. As explained below, LoanCare is correct that the gross negligence claim is barred because Holland has not plausibly alleged that it owed him a legal duty. And because LoanCare is not a “creditor,” it is not subject to the TILA and the Texas constitutional provision that Holland invokes. Further, Holland’s FDCPA claim is barred by the statute of limitations. Those claims should be dismissed. Contrary to LoanCare’s assertions, however, Holland adequately alleged a RESPA claim premised on LoanCare’s failure to timely respond to and investigate his request for information. In addition, Holland has plausibly alleged that LoanCare is a “debt collector” covered by the TDCA. Moreover, LoanCare failed to address Holland’s claims for breach of contract, fraud, and violations of FIRREA and 12 C.F.R. § 34.43. Those claims should survive dismissal. Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 11 of 22
12 A. Holland’s gross negligence claim fails for lack of plausible duty. Holland pleads that LoanCare was grossly negligent when it “recklessly declared [him] in default, imposed unlawful charges, and initiated foreclosure proceedings based on inaccurate and incomplete data.” Dkt. 44 at 8. Among other arguments, LoanCare contends that Holland failed to plausibly allege that the elements of gross negligence are met. See Dkt. 51 at 7. Gross negligence requires a predicate finding of negligence. See Dekelaita v. BP Amoco Chem. Co., 2008 WL 2964376, at *15 (S.D. Tex. July 30, 2008) (collecting Texas decisions for this principle); Hall v. Stephenson, 919 S.W.2d 454, 467 (Tex. App.—Fort Worth 1996, writ denied) (“[A] finding of ordinary negligence is a prerequisite to a finding of gross negligence.”). To state a negligence claim, the plaintiff must show that the defendant owed the plaintiff a legal duty. See Nabors Drilling, U.S.A., Inc. v. Escoto, 288 S.W.3d 401, 404 (Tex. 2009). But under Texas law, a mortgage servicer does not owe a common law duty of care to a borrower. See Milton v. U.S. Bank Nat’l Ass’n, 508 F. App’x 326, 329-30 (5th Cir. 2013) (per curiam) (affirming dismissal of negligence claims against a mortgage servicer; “under Texas law, there is ‘no special relationship between a mortgagor and mortgagee’ that would give rise to a stand-alone duty of good faith and fair dealing” (quoting UMLIC VP LLC v. T&M Sales & Envtl. Sys., Inc., 176 S.W.3d 595, 612 (Tex. App.—Corpus Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 12 of 22
13 Christi, 2005, pet. denied))); Lerma v. CitiMortgage, Inc., 2014 WL 12599346, at *1 (S.D. Tex. Apr. 17, 2014) (dismissing borrower’s negligence claim because “a mortgage servicer does not owe a duty that would support” recovery). Holland has not alleged that LoanCare owed him a legal duty. And the facts on which Holland relies to establish gross negligence concern LoanCare’s servicing of his mortgage, which does not create an independent tort duty. See Sugarek v. Bank of Am., N.A., 2019 WL 13193216, at *9 (S.D. Tex. Sept. 11, 2019) (dismissing negligence claim against loan servicers for lack of duty). The lack of a cognizable legal duty defeats Holland’s gross negligence claim. B. Holland has not alleged that LoanCare is a “creditor” under the TILA. Holland alleges that “Defendants” violated the TILA by failing to give him “proper notice of their ownership as a new creditor within 30 days.” Dkt. 1-3 at 30; see also Dkt. 44 at 11 (seeking statutory damages for TILA violations). The relevant statute 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.” 15 U.S.C. § 1641(g)(1) (emphasis added). “By its terms, § 1641(g) applies only to ‘the creditor that is the new owner or assignee of the debt.’” Fowler v. U.S. Bank, Nat. Ass’n, 2 F. Supp. 3d 965, 982 n.55 (S.D. Tex. 2014) (quoting 15 U.S.C. § 1641(g)(1)). Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 13 of 22
14 LoanCare, however, is not the creditor who owns or was assigned Holland’s underlying debt. See Dkt. 51 at 8. Even Holland acknowledges that LoanCare merely subservices the loan. See Dkt. 44 at 5. Holland cannot pursue a TILA claim against LoanCare. C. Holland cannot pursue his Texas constitutional claim against LoanCare. Holland alleges that his home equity loan violated the Texas Constitution because he never received a written appraisal of the Property’s value at closing and the original lender, Lending Solutions, Inc., did not provide a signed acknowledgement of the Property’s fair market value. Dkt. 44 at 5, 7, 12. Because this defect was never cured, Holland seeks forfeiture of principal and interest paid. Id. at 12. LoanCare asserts that the cited provision does not apply to loan sub-servicers like LoanCare. See Dkt. 51 at 9. Subject to certain exceptions, the Texas Constitution protects a homestead from foreclosure. Tex.. Const. art. XVI, § 50(a)(1-8); Garofolo v. Ocwen Loan Servicing, LLC, 497 S.W.3d 474, 477 (Tex. 2016). Section 50 provides: The homestead of a family, or of a single adult person, shall be, and is hereby protected from forced sale, for the payment of all debts except for … (6) an extension of credit that … (Q) is made on the condition that … (ix) the owner of the homestead and the lender sign a written acknowledgement as to the fair market value of the homestead property on the date the extension of credit is made; (x) except as provided by Subparagraph (xi) of this paragraph, the lender or any holder of the note for the extension of credit shall Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 14 of 22
15 forfeit all principal and interest of the extension of credit if the lender or holder fails to comply with the lender’s or holder’s obligations under the extension of credit and fails to correct the failure to comply not later than the 60th day after the date the lender or holder is notified by the borrow of the lender’s failure to comply …. Tex. Const. Art. XVI, § 50(a)(6)(Q)(x-xi) (emphasis added). Section 50(a) “does not create substantive rights beyond a defense to foreclosure of a home-equity lien securing a constitutionally noncompliant loan” because “the terms and conditions in section 50(a)(6) ‘are not constitutional rights and obligations unto themselves.’” Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542, 546 (Tex. 2016) (quoting Garofolo, 497 S.W.3d at 478)). Instead, Section 50(a) “simply describes what a home-equity loan must look like if a lender wants to foreclose on a homestead upon borrower default.” Garofolo, 497 S.W.3d at 478. “The forfeiture provision in section 50(a)(6)(Q)(x) does not create a constitutional cause of action to access that remedy and must be litigated in the context of the borrower’s loan agreement.” Wood, 505 S.W.3d. at 551. Holland cannot maintain a claim under Section 50(a) against LoanCare. As a sub-servicer who came along years after-the-fact, LoanCare was not a “lender” who needed to “sign a written acknowledgement as to the fair market value” when the loan closed. Nor is LoanCare the “lender or holder of the note” Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 15 of 22
16 who would “forfeit all principal and interest” for failing to comply with the requirements. Section 50(a) provides no relief against LoanCare. Moreover, Holland fails to assert his Section 50(a) claim in conjunction with any cause of action. Holland cannot bring a freestanding claim for violations of that provision. See Mata v. De Pasol, 2022 WL 17722431, at *4-5 (S.D. Tex. Sept. 27, 2022) (same flaw merited dismissing Section 50 claim), adopted by 2023 WL 2226800 (S.D. Tex. Feb. 24, 2023). And foreclosure is no longer a concern because the Property has been sold. The Texas constitutional claim should be dismissed. D. Holland’s FDCPA claim is barred by limitations, but he has sufficiently alleged that LoanCare is a “debt collector” under TDCA. LoanCare contends that Holland’s FDCPA claim is untimely and that both his FDCPA and TDCA claims fail because LoanCare is not a “debt collector” under either statute. Dkt. 51 at 9-10. That is only partly true. LoanCare is correct that Holland’s FDCPA claim is barred by the operative one-year statute of limitations. See 15 U.S.C. § 1692(k). That limitations period “begins to run on the date on which the alleged FDCPA violation occurs, not the date on which the violation is discovered.” Rotkiske v. Klemm, 589 U.S. 8, 10 (2019). LoanCare stopped servicing Holland’s loan in 2023, more than a year before Holland brought this suit on May 15, 2025. See Dkt. 1-3 at 5. The FDCPA claim is therefore barred. Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 16 of 22
17 But LoanCare has not shown that Holland failed to plead a plausible violation of the TDCA, Tex. Fin. Code 392.304(a)(8) and (19). To recover, a plaintiff must show: (1) the debt is a consumer debt; (2) the defendant is a debt collector within the meaning of the TDCA; (3) the defendant committed a wrongful act in violation of the TDCA; (4) the wrongful act was committed against the plaintiff; and (5) the plaintiff was injured. Putty v. Fed. Nat’l Mortg. Ass’n, 2017 WL 5070423, at *3 (N.D. Tex. Nov. 3, 2017) (quotation omitted), aff’d, 736 F. App’x 484 (5th Cir. 2018). As its sole contention, LoanCare’s argues that Holland has not plausibly alleged that it is a “debt collector” under the TDCA. See Dkt. 51 at 9-10. LoanCare is incorrect. The only authority it cites is a case addressing the term “debt collector” under the FDCPA. See id. at 10 (citing LSR Consulting, LLC v. Wells Fargo Bank, N.A., 835 F.3d 530, 535 (5th Cir. 2016)). But “[t]he TDCA’s definition of debt collector is broader than the FDCPA’s definition.” Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 722 (5th Cir. 2013). Indeed, the relevant TDCA provision defines “debt collector” broadly to reach any “person who directly or indirectly engages in debt collection.” Tex. Fin. Code § 392.001(5) (definition of debt collector). The term “debt collection” is “an action, conduct, or practice in collecting, or in soliciting for collection, consumer debts that are due or alleged to be due a creditor.” Id. § 392.001(4). These expansive definitions confirm that “[m]ortgage servicers and their Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 17 of 22
18 assignees are debt collectors under the TDCA.” Williams v. Lakeview Loan Servicing LLC, 694 F. Supp. 3d 874, 884 (S.D. Tex. 2023); see also Miller, 726 F.3d at 723 (same principle). The only other argument that LoanCare proffers characterizes as “baseless” Holland’s allegation that LoanCare issued a foreclosure notice while subservicing the loan. Dkt. 51 at 10. LoanCare insists that “no proof is attached or provided.” Id. But the original petition did attach a July 9, 2019 letter from LoanCare accusing Holland of being in default and warning that foreclosure proceedings had been initiated “to seek resolution of the loan balance.” Dkt. 1-3 at 151. And elsewhere, the pleading explicitly accuses LoanCare of attempting to collect on the debt. See id. at 27. More fundamentally, LoanCare misconstrues the standard of review. At this stage, the analysis focuses solely on allegations, not proof. LoanCare offers no valid reason why the TDCA claim is deficient when taking Holland’s allegations as true—as the Court must do at this Rule 12(b)(6) stage. LoanCare has not articulated a valid basis to dismiss the TDCA claim. E. Holland sufficiently alleged that he sent LoanCare a Qualified Written Request to support his RESPA claim. Holland’s RESPA claim alleges that LoanCare ignored multiple Qualified Written Requests (“QWR”) and Notices of Error. Dkt. 44 at 6. LoanCare argues that Holland has not attached “proof” that he sent it a QWR Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 18 of 22
19 or Notice of Error. Dkt. 51 at 11-12. That is incorrect as a matter of fact and immaterial under the operative standard of review. RESPA requires a loan servicer to timely respond to and investigate a borrower’s request for information relating to the servicing of that loan. See Whittier v. Ocwen Loan Servicing, LLC, 594 F. App’x 833, 836 (5th Cir. 2014) (per curiam) (stating this principle); 12 U.S.C. § 2605(e); 12 C.F.R. § 1024.35. To establish a RESPA violation, a plaintiff must show that: (1) he made a QWR to a qualified loan servicer; (2) the loan servicer failed to either acknowledge the request within five days or investigate the request and answer it within thirty days; and (3) the plaintiff suffered actual damages or, alternatively, the servicer engaged in a pattern of non-compliance that which would entitle the plaintiff to $2,000 in statutory damages. See Wright v. First Nat’l Bank of Livingston, 2025 WL 736634, at *4 (E.D. Tex. Jan. 29, 2025) (citing 12 U.S.C. § 2605(e) and (f)), adopted by 2025 WL 904394 (E.D. Tex. Mar. 25, 2025). Section 2605 defines a QWR as: [A] written correspondence … that includes, or otherwise enables the servicer to identity, the name and account of the borrower; and [that] … includes a statement of the reasons for the borrower’s belief, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower. Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 19 of 22
20 12 U.S.C. § 2605(e)(1)(B). To constitute a QWR, a request must relate to the “servicing” of the loan. Id. § 2605(e)(1)(A); In re Parker, 655 F. App’x 993, 997- 98 (5th Cir. 2016) (per curiam). Holland explicitly pleaded that he sent LoanCare a QWR while it was servicing his loan—and attached a copy of the request. As asserted in the original petition, Holland sent both NewRez and LoanCare a June 18, 2019 letter contesting the amount that remained unpaid. Dkt. 1-3 at 13. He also cited and attached a copy of a letter bearing the date “08/18/2019” but included a certified mail receipt with a delivery date of June 24, 2019. Id. at 145, 147; see also Dkt. 1-3 at 13 (citing both exhibits). Resolving this inconsistency in Holland’s favor, which is necessary at this stage, the Court treats the letter as having been sent in June 2019. The contents of Holland’s letter meet all requirements for a QWR. It includes Holland’s full-name, address, and loan number, disputes Holland’s default, alleges that Holland made payments throughout the disputed months, provides bank statements purporting to show that he made these payments, and requests that Holland’s account balance be corrected. Id. at 145-46. In addition, Holland attached a letter from LoanCare acknowledging its receipt of Holland’s notice of error and promising to send him a “detailed written response” no later than thirty days “in compliance with applicable federal law ….” Id. at 153 (July 15, 2019 letter from LoanCare). According to the pleading, Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 20 of 22
21 however, Holland never received a response, much less a timely one. Id. at 14. He has plausibly stated a RESPA claim against LoanCare. In any event, LoanCare’s demands for “proof” are misplaced at this stage. Holland does not need to prove anything now. Instead, the Court must accept his allegations as true. Because Holland adequately pleaded a basis for recovery under RESPA, LoanCare is not entitled to dismissal of this claim. Recommendation For the foregoing reasons, it is RECOMMENDED that Defendant LoanCare LLC’s motion to dismiss (Dkt. 51) be GRANTED IN PART and DENIED IN PART, as follows: x Holland’s claims for gross negligence and for violations of the Truth-in-Lending Act, the Texas Constitution, and the Federal Debt Collection Protection Act should be DISMISSED WITH PREJUDICE; and x regarding Holland’s claims for breach of contract, fraud, and violations of the Real Estate Settlement and Procedures Act, the Texas Debt Collection Act, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and 12 C.F.R. § 34.43, LoanCare’s motion to dismiss should be DENIED. The parties have fourteen days from service of this Report and Recommendation to file written objections. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). Failure to file timely objections will preclude appellate review of factual findings and legal conclusions, except for Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 21 of 22
22 plain error. Ortiz v. City of San Antonio Fire Dep’t, 806 F.3d 822, 825 (5th Cir. 2015). Signed on May 15, 2026, at Houston, Texas. ______________________________ Yvonne Y. Ho United States Magistrate Judge ________________________________________ Yvooon n nn ne Y. Ho United States Magistrate Judge Case 4:25-cv-03004 Document 62 Filed 05/15/26 in TXSD Page 22 of 22
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