Reported / Citable
Background
Oscar Harris sued Shellpoint Mortgage Servicing and Bonial & Associates in Texas state court after Shellpoint began foreclosure proceedings on a Temple, Texas, home loan. Shellpoint removed the case to federal court and sought judgment on the pleadings. The foreclosure was completed and Harris was evicted in February 2026.
Harris alleged that Shellpoint failed to answer notices seeking validation, the original promissory note, and an accounting. He asserted claims under TILA and Regulation Z, challenged the assignment of the loan, alleged a conflict of interest involving Bonial, invoked federal mail and wire fraud statutes, and brought a Texas DTPA claim. Although given time to amend, Harris did not amend his complaint or serve Bonial.
The Court’s Holding
Magistrate Judge Dan N. MacLemore recommended granting Shellpoint’s Rule 12(c) motion and dismissing all claims. The recommendation is not a final district-court ruling; the parties may object and the district judge will decide whether to adopt it.
The magistrate judge concluded that Harris abandoned his standing, fiduciary-duty, and mail- and wire-fraud claims by not defending them in response to Shellpoint’s motion. His new RESPA and Regulation X theory, raised only in his response, was not part of the operative pleading. The remaining TILA, Regulation Z, and fraudulent-assignment allegations were conclusory and did not plausibly state claims. The DTPA claim failed because Harris challenged loan servicing and foreclosure conduct, rather than goods or services he sought from Shellpoint, and thus was not a DTPA consumer. Claims against Bonial should be dismissed because it had not been served.
Key Takeaways
- A TILA claim under 15 U.S.C. § 1637(b) did not fit the alleged closed-end mortgage transaction.
- General assertions of deficient mortgage statements and a fraudulent assignment did not satisfy federal pleading standards.
- A borrower challenging post-loan servicing and foreclosure activity is not, on those allegations, a DTPA consumer.
Why It Matters
The recommendation illustrates that borrowers must plead concrete facts tying a mortgage servicer’s conduct to each statutory requirement. It also underscores that claims raised for the first time in a response generally cannot rescue an unamended complaint.