A U.S. District Court in Washington, D.C., has dismissed a case brought by Shinok Park against the Bank-Fund Staff Federal Credit Union. Park alleged that the Credit Union wrongfully accelerated her home equity lines of credit (HELOCs) and initiated foreclosure proceedings on her properties. The court's decision affects Park's ability to seek relief for her claims, which stemmed from financial difficulties she faced during the COVID-19 pandemic.
The case, filed under Civil Action No. 2025-1653 on June 23, 2026, centers on two HELOC loans Park obtained in 2014. These loans were secured by her residence and a condominium she rented out. Park claimed that during the pandemic, she experienced financial hardship, leading her to seek loan modifications from the Credit Union. However, she stated that her requests were repeatedly rejected.
Park's troubles escalated when a tenant caused fire damage to her condominium in April 2021, further depleting her financial resources. Despite continuing to make payments on her loans, she alleged that the Credit Union misapplied her payments, resulting in default notices being issued against her in 2024. Park sought help from the D.C. Homeowner Assistance Fund and submitted a mortgage assistance application in early 2025, but her applications were deemed incomplete by the Credit Union.
In her amended complaint, Park outlined five claims against the Credit Union, including wrongful acceleration and foreclosure, failure to provide account information, improper rejection of her loss mitigation application, breach of contract, and failure to provide required disclosures under the Truth in Lending Act (TILA).
Judge Dabney L. Friedrich presided over the case and ruled on the Credit Union's motion to dismiss Park's claims. In her opinion, Judge Friedrich noted that Park failed to adequately plead her claims under the Real Estate Settlement Procedures Act (RESPA) and TILA. She stated, "Park has failed to plead a violation of § 1024.41. She alleges that the Credit Union 'reject[ed]' her applications by letter in May 2025. But the subject letters in fact 'closed' her loss mitigation applications based upon a determination that the applications were 'incomplete.'"
The court also found that Park did not demonstrate actual damages resulting from the alleged violations, which is a necessary element to support her claims under RESPA. The ruling emphasized that Park's allegations lacked sufficient detail to establish a plausible claim for relief.
The dismissal of Park's federal claims led the court to decline to exercise supplemental jurisdiction over her remaining state law claims. Judge Friedrich stated that the relevant factors weighed against exercising jurisdiction, noting that the case was still in the initial pleading stage and that Park would not be prejudiced by the dismissal.
As a result of the ruling, Park's claims against the Credit Union have been dismissed without prejudice, meaning she may have the opportunity to refile her claims in state court if she chooses. The court also denied Park's motions to strike exhibits attached to the Credit Union's motion to dismiss and to take judicial notice of foreclosure proceedings.
This ruling highlights the challenges faced by borrowers in navigating complex legal frameworks surrounding loan modifications and foreclosure processes, particularly during times of financial distress. It underscores the importance of providing clear and complete information when seeking relief from financial institutions.
Looking ahead, Park may consider appealing the court's decision or pursuing her claims in a related state court case. However, details regarding any potential appeal or related cases were not available in the court filing.