1. Cunningham v. M & T Bank Corp., No. 15-1412, 2016 WL 683372 (3d Cir. Feb. 26, 2016)
Claim based on alleged kickback scheme involving reinsurance fees paid on private mortgage insurance was barred by the statute of limitations.
Borrowers brought a class action lawsuit against the lender for alleged violations of RESPA’s anti-kickback and anti-fee-splitting provisions. The borrowers paid for private mortgage insurance (“PMI”) as a condition of their mortgages. The lender referred the borrowers to PMI insurers who reinsured the insurance policy with the lender’s captive reinsurer. The borrowers alleged that the Bank colluded with the PMI insurers and received funds from reinsurance agreements that required the entity to take on little or no actual risk. The trial court granted summary judgment for the lender, finding that the claims were barred by the statute of limitations. The judgment was affirmed on appeal.
2. Schonebaum v. Shellpoint Mortgage Servicing, No. 14-CV-03093, 2016 WL 1104875 (D. Colo. Feb. 29, 2016)
RESPA claim should be dismissed because the complaint did not allege that the lender divided any fee with another entity.
The borrower alleged that the lender violated RESPA by accepting charges for something other than services actually performed. However, the borrower’s complaint did not include an allegation that any fee was divided between the lender and another entity. Because a RESPA violation requires the dividing of a charge with another entity, the magistrate judge recommended that the court grant the lender’s motion to dismiss.
3. Arace v. Quicken Loans, Inc., No. 15-CV-382, 2016 WL 390088 (S.D.N.Y. Feb. 1, 2016)
Because borrower could not show a single fee that was split between two
separate entities, her RESPA claim failed.
Borrower brought a class action suit against the lender for improperly charging and splitting an unnecessary “tax service fee” in connection with her mortgage. The borrower alleged that because she lives in a building that is a cooperative and the cooperative association is responsible for paying the taxes, the lender had no reason to charge the fee. The borrower also claimed the lender split the fee with other entities, none of whom performed services in exchange for the charge. The documentation showed that the borrower was charged two separate fees that went to two separate entities; there was not a single charge that was split between two parties. Because a RESPA violation requires a fee divided by two or more parties, the court granted the lender’s motion to dismiss the claim.
4. Collins v. First Financial Services, Inc., No. 7:14-CV-288-FL, 2016 WL 589688 (E.D.N.C. Feb. 10, 2016)
Borrower’s anti-kickback claim failed because the lender performed services in connection with the loan and did not split fees with another entity.
Borrower obtained a mortgage loan with the lender FFSI. Through the course of several transactions, the loan was transferred to several different entities. The borrower alleged that the lender violated RESPA by giving or receiving fees or kickbacks while acting as the lender in the origination of the loan. However, the allegations in the complaint stated that FFSI kept all of the fees it charged. Therefore, there were no facts showing that FFSI split the fees with another entity. Furthermore, because FFSI engaged in substantial conduct regarding the loan, the fees it received were in exchange for services performed. Lender’s motion to dismiss was granted.
B. Statutes and Regulations
No RESPA statutes or regulations were retrieved this quarter.
C. Volume of Materials Retrieved
RESPA issues were identified 18 times in 15 cases (see Table 1).