Young

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

NATALIE YOUNG,

Successor in Interest, estate of

James Weatherly

Plaintiff, Civil Action 2:26-cv-174

Judge Michael H. Watson

v. Magistrate Judge Chelsey M. Vascura

SERVBANK, et al.,

Defendants.

REPORT AND RECOMMENDATION

Plaintiff, Natalie Young, sues Defendants, Servbank and Lakeview Loan Servicing, LLC,

for violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq.

(“RESPA”), among other statutes and regulations, arising from a mortgage loan on a property

that Plaintiff inherited. This matter is before the Court for the initial screen of Plaintiff’s

Amended Complaint (ECF No. 4) under 28 U.S.C. § 1915(e)(2) to identify cognizable claims

and to recommend dismissal of Plaintiff’s Complaint, or any portion of it, which is frivolous,

malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief from

a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2). Having performed the

initial screen, for the reasons below, Plaintiff MAY PROCEED on Counts 1 (violation of

RESPA § 2605(e)) and 2 (violation of Regulation X, 12 C.F.R. § 1024.35) against Servbank, but

the undersigned RECOMMENDS that the Court DISMISS Plaintiff’s remaining claims under

§ 1915(e)(2)(B) for failure to state a claim on which relief can be granted.

I. BACKGROUND

This action concerns a mortgage loan held by Defendant Servbank as of December 15,

2025. Plaintiff’s connection to the mortgage loan is not entirely clear; the captions of the original

and Amended Complaints refer to Plaintiff as the “successor in interest” to or on behalf of the

“estate of James Weatherly,” who presumably was the original mortgagor. Plaintiff also alleges

that she is “the confirmed Successor in Interest to the mortgage loan” and refers to a “transfer

after inheritance” (Am. Compl. ¶¶ 4, 22–25, ECF No. 4.) Plaintiff alleges that she submitted a

Qualified Written Request (“QWR”) to Servbank on December 15, 2025, disputing the accuracy

of several aspects of the mortgage account. According to correspondence attached to Plaintiff’s

Renewed Motion for Temporary Restraining Order and Preliminary Injunction (ECF No. 10),

Servbank received the QWR on December 23, 2025, and sent an acknowledgement to Plaintiff

on December 26, 2025, stating that Servbank would review Plaintiff’s account and respond

within 30 business days of receiving the QWR. (Dec. 26, 2025 Letter, ECF No. 10, PAGEID

#67.) On January 22, 2026, Servbank wrote to Plaintiff again, stating that it had made diligent

efforts to investigate the QWR, but required more time to complete its investigation. Servbank

represented that it would respond by February 12, 2026. (Id. at PAGEID #72.) No further

correspondence from Servbank related to the QWR is in the record, but Plaintiff alleges that

Servbank’s eventual response failed to reflect a reasonable investigation, “was a narrative

referencing unrelated 2024 complaints, loss mitigation, and insurance cancellation claims,

ignoring the specific errors (mathematical delinquency calculation, suspense reconciliation,

escrow allocation),” and that Servbank “asserted delinquency and continued collection

foreclosure and threats.” (Am. Compl. ¶ 8–9, 11, ECF No. 4.)

In the meantime, Servbank sent a Notice of Mortgage Servicing Transfer to Plaintiff on

January 13, 2026, informing her that the servicing of the mortgage loan was scheduled to be

transferred to Loancare, LLC, on behalf of Defendant Lakeview Loan Servicing, LLC, effective

February 3, 2026. (Id. at PAGEID #52.)

Plaintiff commenced this action on February 13, 2026. (ECF No. 1.) On February 17,

2026, she amended her Complaint as a matter of course under Federal Rule of Civil Procedure

15(a)(1). (ECF No. 4.) The Amended Complaint is identical to the original Complaint, except

that Plaintiff added Lakeview Loan Servicing, LLC, as a Defendant. Neither the original nor

Amended Complaints contain any factual allegations regarding Lakeview. Because all references

to “Defendant” in the original Complaint referred to Servbank, and because the Amended

Complaint makes no changes to the body of the pleading, the Court construes the Amended

Complaint’s references to “Defendant” as continued references to Servbank only.

Plaintiff’s Amended Complaint thus contains five counts against Servbank: (1) violation

of RESPA (12 U.S.C. § 2605(e)), (2) violation of Regulation X (12 C.F.R. § 1024.35),

(3) refusal to process lawful VA unrestricted transfer after inheritance (38 U.S.C. § 3714; VA

regulations), (4) advancing foreclosure activity during pending RESPA dispute (12 U.S.C.

§ 2605; 12 C.F.R. §§ 1024.35, 1024.38), and (5) improper suspense accounting & payment

obstruction (12 C.F.R. § 1024.35).

As relief, Plaintiff seeks money damages and a “preliminary injunction halting

foreclosure if imminent,” the latter of which is the subject of a separate pending Renewed

Motion for Temporary Restraining Order and Preliminary Injunction (the “renewed motion,”

ECF No. 10). In that renewed motion, Plaintiff includes, for the first time, allegations relating to

Defendant Lakeview. Plaintiff alleges that Lakeview issued inconsistent and confusing

communications as to the status of her loss mitigation application, violating 12 C.F.R.

§§ 1024.41(b)(2)(i)(B) and (c)(2)(iv). (Id. at ¶¶ 3–15, 18–19.) Plaintiff also alleges that both

Servbank and Lakeview demanded payment for February 2026 after the date of the loan transfer

to Lakeview in violation of 12 U.S.C. § 2605(c) and 12 C.F.R. § 1024.33. In an effort to liberally

construe Plaintiff’s allegations, the undersigned considers the allegations in Plaintiff’s renewed

motion to be part of Plaintiff’s Amended Complaint.

II. STANDARD OF REVIEW

Congress enacted 28 U.S.C. § 1915, the federal in forma pauperis statute, seeking to

“lower judicial access barriers to the indigent.” Denton v. Hernandez, 504 U.S. 25, 31 (1992). In

doing so, however, “Congress recognized that ‘a litigant whose filing fees and court costs are

assumed by the public, unlike a paying litigant, lacks an economic incentive to refrain from

filing frivolous, malicious, or repetitive lawsuits.’” Id. at 31 (quoting Neitzke v. Williams, 490

U.S. 319, 324 (1989)). To address this concern, Congress included subsection (e):

(2) Notwithstanding any filing fee, or any portion thereof, that may have been paid,

the court shall dismiss the case at any time if the court determines that—

* * *

(B) the action or appeal—

(i) is frivolous or malicious; [or]

(ii) fails to state a claim on which relief may be granted . . . .

28 U.S.C. § 1915(e)(2)(B)(i) & (ii); Denton, 504 U.S. at 31. Thus, § 1915(e) requires sua sponte

dismissal of an action upon the Court’s determination that the action is frivolous or malicious, or

upon determination that the action fails to state a claim upon which relief may be granted.

To state a claim upon which relief may be granted, a plaintiff must satisfy the basic

federal pleading requirements set forth in Federal Rule of Civil Procedure 8(a). See also Hill v.

Lappin, 630 F.3d 468, 470–71 (6th Cir. 2010) (applying Federal Rule of Civil Procedure

12(b)(6) standards to review under 28 U.S.C. §§ 1915A and 1915(e)(2)(B)(ii)). Under Rule

8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the

pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Thus, Rule 8(a) “imposes legal and factual

demands on the authors of complaints.” 16630 Southfield Ltd., P’Ship v. Flagstar Bank, F.S.B.,

727 F.3d 502, 503 (6th Cir. 2013).

Although this pleading standard does not require “detailed factual allegations, a pleading

that offers labels and conclusions or a formulaic recitation of the elements of a cause of action”

is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (cleaned up). A complaint will not

“suffice if it tenders naked assertion devoid of further factual enhancement.” Id. (cleaned up).

Instead, to state a claim upon which relief may be granted, “a complaint must contain sufficient

factual matter to state a claim to relief that is plausible on its face.” Id. (cleaned up). Facial

plausibility is established “when the plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The

plausibility of an inference depends on a host of considerations, including common sense and the

strength of competing explanations for the defendant’s conduct.” Flagstar Bank, 727 F.3d at 504

(citations omitted). Further, the Court holds pro se complaints “to less stringent standards than

formal pleadings drafted by lawyers.” Garrett v. Belmont Cty. Sheriff’s Dep’t, 374 F. App’x 612,

614 (6th Cir. 2010) (quoting Haines v. Kerner, 404 U.S. 519, 520 (1972)). This lenient

treatment, however, has limits; “courts should not have to guess at the nature of the claim

asserted.” Frengler v. Gen. Motors, 482 F. App’x 975, 976–77 (6th Cir. 2012) (quoting Wells v.

Brown, 891 F.2d 591, 594 (6th Cir. 1989)).

III. ANALYSIS

A. Claims against Servbank

Plaintiff may proceed on Count 1 for violation of RESPA (12 U.S.C. § 2605(e)), arising

from Servbank’s alleged failure to timely respond to her QWR, and Count 2 for violation of

Regulation X (12 C.F.R. § 1024.35) arising from Servbank’s alleged misapplication of

payments, improper escrow and suspense handling, and failure to correct errors after notice. But

Plaintiff’s remaining claims against Servbank must be dismissed.

Plaintiff’s Count 3 is brought under 38 U.S.C. § 3714 and unspecified “VA Regulations.”

Section 3714 governs housing loan benefits for veterans. Plaintiff has not alleged that either she

or Mr. Weatherly are veterans. Nor has she alleged that the other requirements of § 3714 (e.g.,

that the mortgage loan was one made under Chapter 37 of Title 38 of the United States Code, or

that the holder of the loan was notified before the property was transferred) were satisfied.

Plaintiff therefore has not alleged facts on which the Court could rely to conclude that 38 U.S.C.

§ 3714 applies to these facts. Similarly, as to any unspecified “VA Regulations,” the Court

presumes that “VA” in this case stands for “Veterans Affairs.” Presumably either Plaintiff or Mr.

Weatherly would have to be a veteran before any VA-related regulations would apply to

Plaintiff’s situation. Because there are no allegations that either Plaintiff or Mr. Weatherly are

veterans, Plaintiff’s Count 3 must be dismissed.

Count 4 is premised on Servbank’s “advancing foreclosure activity during a pending

RESPA dispute” in violation of 12 U.S.C. § 2605 and 12 C.F.R. §§ 1024.35, 1024.38. But none

of these provisions contain a prohibition on advancing foreclosure activity. Indeed, Regulation X

expressly says that nothing in that regulation prevents a lender from moving forward with

foreclosure. 12 C.F.R. § 1024.35(i)(2). Exceptions to that provision exist only if the lender or

loan servicer has made the first notice or filing required to commence foreclosure, or has moved

for a foreclosure judgment or order of sale. See id., § 1024.35(b)(9)–(10). Here, plaintiff alleges

only that Servbank “threatened” foreclosure and created an “increased foreclosure risk.” As

Plaintiff’s allegations do not suggest that Servbank ran afoul of the relevant provisions,

Plaintiff’s Count 4 must be dismissed.

Count 5 alleges that Servbank engaged in improper suspense accounting and payment

obstruction in violation of 12 C.F.R. § 1024.35. This Count is largely redundant with Count 2

(alleging misapplication of payments, improper escrow/suspense handling, and failure to correct

errors after notice in violation of 12 C.F.R. § 1024.35), on which the Court has already permitted

Plaintiff to proceed. The only portion of Count 5 that may not be encompassed within Count 2 is

Plaintiff’s allegations of “telephone harassment” (see Am. Compl. ¶ 31, ECF No. 4); but nothing

in § 1024.35 governs telephone conduct or harassment and Plaintiff’s allegations in that vein do

not establish any regulatory violation. Count 5 must therefore be dismissed.

Finally, Plaintiff’s renewed motion alleges that Servbank improperly demanded payment

for February 2026 after the loan’s servicing was transferred to Lakeview. But the exhibit on

which Plaintiff relies for this claim, which Plaintiff characterizes as a “January 13, 2026

Servbank Notice of Mortgage Servicing Transfer effective February 3, 2026 and demand for

payment” (Renewed Motion 8, ECF No. 10) states only that if Plaintiff’s next payment is due

prior to the transfer date, it is important to make her payment as soon as possible, and that

“Servbank will continue to collect payments until February 2, 2026”—that is, Servbank would

continue to collect payments only until the transfer to Lakeview was complete. (Id. at PAGEID

#52) (emphasis added). “The general rule is that if inconsistent with the allegations of the

complaint, the exhibit controls.” Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 441 (6th Cir.

2012) (cleaned up). Thus, Plaintiff’s Amended Complaint fails to reflect any improper collection

attempt by Servbank.

B. Claims against Lakeview

The allegations in Plaintiff’s renewed motion fail to state a claim against Lakeview on

which relief can be granted. First, Plaintiff alleges that Lakeview issued inconsistent and

confusing communications as to the status of her loss mitigation application, violating 12 C.F.R.

§§ 1024.41(b)(2)(i)(B) and (c)(2)(iv) of Regulation X (Renewed Motion, ¶¶ 3–15, 18–19, ECF

No. 10.) But the correspondence attached to Plaintiff’s renewed motion reflects that Lakeview

properly notified Plaintiff that her loss mitigation application was complete as of February 13,

2026, and properly requested additional probate documentation on February 23, 2026. See 12

C.F.R. § 1024.41(c)(2)(iv) (permitting a servicer to promptly request additional information if,

after notifying the borrower that the loss mitigation application is complete, the lender discovers

that additional information is required to complete the application); see also Carrier Corp., 673

F.3d at 441 (exhibit controls over inconsistent factual allegations). Plaintiff’s allegations as to

Lakeview’s loss mitigation communications therefore fail to establish a violation of Regulation

X.

Plaintiff also alleges that Lakeview’s February 13, 2026 initial confirmation that the

application for Loss Mitigation was complete triggered protections under 12 CFR

§ 1024.41(f)(2). Plaintiff is correct on this point, but there are no allegations that those

protections (i.e., preventing Lakeview from commencing foreclosure proceedings) have not been

afforded to Plaintiff.

Finally, Plaintiff also alleges that both Servbank and Lakeview demanded payment for

February 2026 after the date of the loan transfer to Lakeview in violation of 12 U.S.C. § 2605(c)

and 12 C.F.R. § 1024.33. Even if true, any double collection violation would not be attributable

to Lakeview, who was the servicer of record after the transfer, and who was entitled to collect

monthly payments at that time.

IV. DISPOSITION

Plaintiff MAY PROCEED on Count 1 for violation of RESPA (12 U.S.C. § 2605(e)),

arising from Servbank’s alleged failure to timely respond to her QWR, and Count 2 for violation

of Regulation X (12 C.F.R. § 1024.35) arising from Servbank’s alleged misapplication of

payments, improper escrow and suspense handling, and failure to correct errors after notice. For

the reasons above, it is RECOMMENDED that Plaintiff’s remaining claims against Servbank

and Lakeview be DISMISSED under 28 U.S.C. § 1915(e) for failure to state a claim on which

relief can be granted.

The Court’s records reflect that Plaintiff submitted service copies of the Amended

Complaint, summons forms, and United States Marshal service forms to the Clerk of Court on

February 25, 2026. The Clerk is DIRECTED to issue the summons to Defendant Servbank only,

and the United States Marshal is DIRECTED to serve by certified mail, upon Defendant

Servbank only, the issued summons, a copy of the Amended Complaint, and a copy of this

Report and Recommendation.

PROCEDURE ON OBJECTIONS

If any party objects to this Report and Recommendation, that party may, within fourteen

(14) days of the date of this Report, file and serve on all parties written objections to those

specific proposed findings or recommendations to which objection is made, together with

supporting authority for the objection(s). A District Judge of this Court shall make a de novo

determination of those portions of the Report or specified proposed findings or recommendations

to which objection is made. Upon proper objections, a District Judge of this Court may accept,

reject, or modify, in whole or in part, the findings or recommendations made herein, may receive

further evidence or may recommit this matter to the Magistrate Judge with instructions. 28

U.S.C. § 636(b)(1).

The parties are specifically advised that failure to object to the Report and

Recommendation will result in a waiver of the right to have the District Judge review the Report

and Recommendation de novo, and also operates as a waiver of the right to appeal the decision of

the District Court adopting the Report and Recommendation. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

/s/ Chelsey M. Vascura

CHELSEY M. VASCURA

UNITED STATES MAGISTRATE JUDGE