The courts continue to decide cases challenging the existence of a RESPA claim. In two cases this quarter, two different courts concluded that a homeowner’s assertions failed to allege claims to which REPSA applied.

A. Cases

1. Maitland v. Fishbein, 2017 WL 9485648 (E.D.N.Y. Feb. 28, 2017)

Homeowners sought to refinance their home. The homeowners claim that the mortgage broker subsequently directed them to sign blank mortgage refinance loan documents. During the course of this refinancing, the homeowners inquired into the amount of their new monthly mortgage payment and their interest rate under the mortgage agreement. The homeowners later learned that they had signed three loan notes with extremely unfavorable terms, which subsequently led to foreclosure.

The homeowners alleged the addition to the loan modification was a deception and misrepresentation, and that the increased payment was a kickback to the mortgage company based on the inflated foreclosure balance. In considering the homeowners’ RESPA claims, the

Court refused to certify class action based on allegations that mortgage company’s requirement that homeowners use an affiliated appraisal company.

court found that because their allegations did not involve the sale of any property or the requirement that title insurance be purchased from a particular title company, RESPA does not apply. Additionally, even if the homeowners had properly alleged a RESPA claim, such claims would likely be time-barred. The trial court dismissed the RESPA claim.

2. Loughlin v. Amerisave Mortgage Corp., 2018 WL 1896409 (N.D. Ga. Feb. 7, 2018); 2018 WL 1887292 (N.D. Ga. Mar. 19, 2018)

In an attempt to certify their action as a class action, the homeowners argued that the mortgage company generally required its customers to use the same appraisal management company. The homeowners further claimed that the mortgage company and appraisal management company were affiliates and owned by the same trusts and that the owners of each respective company received profit distributions, which amounted to a kickback violation. The court declined homeowner’s request to certify two classes. The first class would have been

Completing a substantial amount of business with a single escrow company does not result in a RESPA violation absent the exchange of any fee, kickback, or thing of value.

composed of the homeowners who did not receive any notice of the affiliated business relationship between the mortgage company and appraisal company. The second class would have been composed of those homeowners who received a disclosure about the affiliated business relationship. Given the depth of the individualized inquiries involved in determining each homeowners’ situation, the court denied the homeowners’ motion for class certification.

3. Taylor v. Gorilla Capital, Inc, 2018 WL 3186946 (D. Or. June 28, 2018)

The homeowners, after receiving a loan backed by a deed of trust on their home, brought suit claiming, in part, that the broker, lender, and escrow agent violated RESPA’s prohibition on steering borrowers to an escrow company of the mortgage company’s choice. The homeowner’s claims were based on the substantial amount of business referred to the escrow company from the mortgage company.

The court found that that the homeowners appeared to conflate “thing of value” with the implicit allegation that the escrow company agreed to act as the escrow agent. The court disagreed, noting that simply doing “a substantial amount of business” with a certain escrow company does not result in a violation of RESPA, as no fee, kickback, or “thing of value” was exchanged. The trial court dismissed the RESPA claim.

B. Statutes and Regulations

No RESPA statutes or regulations were retrieved this quarter.

C. Volume of Materials Retrieved

RESPA issues were identified 9 times in 6 cases (see Tables 1, 2). No RESPA legislation was retrieved this quarter.

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ARELLO Archive

The NAR/ARELLO Archive is a compilation of new types of laws collected over the past few years. This resource is helpful to guide states that may want to adopt similar laws in their state.

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Read a summary of this quarter's additions to the ARELLO archive.