RESPA Cases In The News
The following RESPA cases address the issue of violating provisions of RESPA Section 8 and HUD’s implementing regulations.
Wesley Murray: Kelly Renee Murray, Plaintiffs - Appellants v. Fidelity National Financial, Inc.; Fidelity National Title Group; Chicago Title Insurance Company; Ticor Title Insurance Company; Chicago Title Insurance Group; Fidelity National Title Insurance Company, Defendants - Appellees (January 15, 2010)
Appellants Wesley Murray and Kelly Renee Murray (the “Murrays”) were not parties to the instant suit when it was filed. Maria Arevalo and Amy Lyn Rash (“Original Plaintiffs”) filed a class action alleging that Ticor Title Insurance Company (“Ticor Title”) had overcharged them to record documents related to their residential real estate closings and that the other Defendants were also liable under theories of vicarious liability. However, it turned out that original plaintiffs had not conducted business with Ticor Title but, rather, “had dealt with a third party that promoted itself as ‘Ticor Title of San Antonio,’ despite having no authority to act for any of the Defendants.
Original Plaintiffs filed a FED. R. CIV. P. 15(a)(2) motion for leave to amend their complaint and add the Murrays, who had dealt with Defendant Chicago Title Insurance Group (“Chicago Title”), as class representatives. While that motion was pending, Chicago Title tendered a check to the Murrays’ counsel as full payment of their claim. Notwithstanding the tender, the district court granted Original Plaintiffs’ motion for leave to amend, and the Murrays were added as named representatives of the putative class. Original Plaintiffs and the Murrays filed a Second Amended Class Action Complaint.
Defendants responded with two motions challenging the subject matter jurisdiction of the district court. They filed a motion to dismiss, arguing, inter alia, that the Murrays’ claims had been mooted by the tender of payment before they became parties to the suit. They also filed a motion for summary judgment, arguing, inter alia, that Original Plaintiffs failed to establish any case or controversy against any Defendant, because none of the Defendants handled Original Plaintiffs’ real estate transactions. The district court granted Defendants’ motions. The Murrays appeal the decision dismissing their claims against Chicago Title. Original Plaintiffs have not appealed, and the Murrays have not challenged the district court’s finding that Original Plaintiffs lacked standing to sue.
Mims v. Stewart Title Guaranty Co., 2009 WL 4642631 (5th Cir. Dec. 9, 2009)
Defendant Stewart Title Guaranty (“Stewart”) appeals the district court’s order certifying a class in this case alleging violations of the Real Estate Settlement Procedure Act (“RESPA”) and related state law claims. Based on our conclusion that individual factual issues predominate the RESPA claim, we reverse the district court’s order certifying a class on that claim. Although we see no legal impediment to the certification of a class on the state law claims, given our reversal of the federal class certification, we remand to allow the district court to consider whether to exercise its discretion to retain pendent jurisdiction over those claims.
Notwithstanding our affirmance of the certification of the state class, given our reversal of the federal class certification, the district court should on remand consider whether to continue to exercise its discretionary supplemental jurisdiction over those claims. See 28 U.S.C. § 1367(c) (“The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) [allowing supplemental jurisdiction] if – . . . (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction.”). There is obviously a strong argument that the class action on the
state law claims will predominate over the individual federal claims.
Thomas A. Arthur Jr., et al. v. Ticor Title Insurance. Company of Florida, No. 08-1727, 4th Cir.; June 18, 2009
OPINION WILKINSON, Circuit Judge: Plaintiffs are homeowners in Maryland who purchased title insurance from Ticor Title Insurance Company of Florida when they refinanced their mortgages. They allege that Ticor charged them rates that were higher than the applicable rates Ticor had on file with the Maryland Insurance Commissioner. And plaintiffs claim that Ticor, by splitting these excessive charges with its local agents, violated Section 8 of the Real Estate Settlement Procedures Act (”RESPA”), 12 U.S.C. § 2607.
Because Ticor and its agents performed services in return for the charges that they collected, we conclude that plaintiffs’ theory of liability conflicts with RESPA’s statutory text and with our previous recognition that RESPA is not a price control statute, see Boulware v. Crossland Mortgage Corp., 291 F.3d 261, 265 (4th Cir. 2002). Thus, the district court properly dismissed plaintiffs’ RESPA claims. We also conclude that plaintiffs’ state-law claims warranted dismissal, primarily for want of exhaustion, and we therefore affirm the district court’s judgment. While the law is not indifferent to the abuses plaintiffs allege, plaintiffs have chosen the wrong statute and the wrong forum in which to press their case.
Homebuyers were unfairly charged fee, federal court in Birmingham rules (JAN 17, 2008)
This matter is before this Court on Plaintiff Vicki V. Busby’s (“Busby”)appeal of the district court’s denial of class certification to a class of plaintiffs seeking damages arising out of Defendant JRHBW Realty, Inc.’s, d/b/a RealtySouth (“RealtySouth”), alleged violation of Section 8(b) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et seq.
On May 26, 2004, Busby, the putative class representative, purchased a home in Jefferson, Alabama, using a federally related home loan. Busby employed a RealtySouth real estate agent who earned a sales commission based on a percentage of the purchase price. This brokerage commission, paid by the seller, was lowered from 3% to 2.5% in order to encourage the seller to accept Busby’s offer. During the closing and settlement, RealtySouth charged Busby an Administrative Brokerage Commission fee of $149 (the “ABC Fee”). The closing attorney is Ms. Busby’s current counsel. He explained the closing documents and the HUD-1 statements to Busby 2 and engaged in discussions with her concerning
the transactions.
Culpepper v. Irwin Mortgage (JULY 2, 2007)
The appellants, John and Patricia Culpepper and Beatrice Hiers, brought the present class action against appellee Irwin Mortgage Corporation (“Irwin”), a mortgage lender, pursuant to the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et. seq. The appellants alleged that Irwin’s payment of yield spread premiums to mortgage brokers — in exchange for delivering interest rates above the “par rate” — violated section 8 of RESPA, 12 U.S.C. § 2607(a).
Spicer v. The Ryland Group, Inc. (SEPT 16, 2008)
Appellant, Tanya Spicer, on behalf of herself and a putative nationwide class of individuals, appeals the district court’s order, granting a motion to dismiss in favor of Appellees, Ryland Group, Inc., that was based on the district court’s determination that defendants’ offering a discount on settlement services, conditioned upon the use of an affiliated business arrangement in this case was not a violation of the Real Estate Settlement Procedures Act, 12 U.S.C. §§2607(a) and (b). See Spicer v. Ryland Group. Inc., 523 F.Supp. 1356 (N.D. Ga. 2007).
Friedman v. Market Street Mortgage Corporation (November 7, 2007)
In this appeal, Market Street Mortgage Corporation (“Market Street”) contends that the district court erred in certifying a class of persons represented by Edward and Lori Friedman, in which the stated common question of law is whether Market Street violated subsection 8(b) of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), codified at 12 U.S.C. § 2607(b), by requiring loan borrowers to pay an escrow waiver fee for which Market Street had performed no services. Because we find that this class certification order violated the law of the case and because we also hold that subsection 8(b) does not apply to settlement fees that are alleged to be excessive, we reverse the district court’s certification order and remand the case with instructions to dismiss the Friedmans’ complaint with prejudice.
Krupa v. Landsafe Inc. (JANUARY 22, 2008)
Joel Price and Joshua and Cynthia Krupa, who sued on behalf of a class of borrowers, appeal the district court’s grant of summary judgment on their Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq., claims in favor of the defendants, Landsafe Credit, Inc. and Countrywide Home Loans, Inc.
Yeatman v. D.R. Horton, Inc., and DHI Mortgage Co.
A fraudulent market is not a free market. To ensure a free, competitive market in residential real estate, statutes 1 and regulations2 seek to prevent tying arrangements, kickbacks, fee splitting, hidden fees, etc. See Friedman v. Market Street Mortg. Corp., ___ F.3d ___, 2008 WL 739704 (11th Cir. 3/20/08); Krupa v. Landsafe, Inc., 514 F.3d 1153, 1155 (11th Cir. 2008); Busby v. JRHBW Realty, Inc., 513 F.3d 1314 (11th Cir. 2008); Mallory v. GMS Funding, LLC, 2008 WL 276578 (S.D.Ala. 1/30/08) (unpublished); 12 U.S.C. § 2607(b).
Carter, et al. v. Welles-Bowen Realty, et al. (January 23, 2009)
BARZILAY, Judge. This appeal involves the issue of whether an allegation that section 8 of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2607, has been violated confers standing even if the consumer does not allege an above-market rate charge for services, i.e. an “overcharge.” The district court, in an opinion and order granting the Defendants-Appellees’ Motion to Dismiss, held Plaintiffs-Appellants lacked standing to bring a claim under § 2607 because they did not allege any overcharge or other concrete injury. See Carter v. Welles-Bowen Realty, Inc., 493 F. Supp. 2d 921, 927 (N.D. Ohio 2007) (“Carter I”). Appellants now appeal, arguing that this court should reject the district court’s “overcharge approach” to standing. For the reasons stated below, the court reverses the decision of the district court and remands the matter to the district court for further proceedings consistent with this opinion.
Hazewood v. Foundation Fin. Group, LLC, 551 F.3d 1223, 1224 (8th Cir. October 20, 2008).pdf