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Thelma McCoy v. USA

Summarizing by Craig Geno

Perron v. J.P. Morgan Chase Bank, N.A.

Case Type:
Case Status:
No. 1:12-cv-01853 (7th Circuit, Jan 11,2017) Published
The Seventh Circuit affirmed the District Court’s grant of summary judgment to a mortgage lender, finding that the lender’s responses to informational requests substantially complied with RESPA and that the borrowers had not suffered any actual damages to create a RESPA claim or, established that the lender had engaged in an actionable “pattern or practice of noncompliance”. Moreover, the lender did not breach any duty of good faith or fair dealing by holding a partial payment in suspense when it did not have any obligation or agreement with the borrowers to accept the partial amount.
Procedural context:
Consumer borrower appellants took appeal to the Seventh Circuit after grant of summary judgment to their mortgage lender in RESPA suit below.
After consumers – one an attorney and one a retired IRS investigator - changed insurance companies without notifying their mortgage lender, the lender paid the necessary amounts to their new insurer and instructed the consumers to return the refund from the former insurer to the lender to replenish their mortgage escrow. The consumers failed to turn the refund over to the lender; the lender then adjusted the mortgage payment to recover the unpaid premium. The consumers refused to pay the adjusted payment and when partial payment on the loan was placed into suspense, went into default. The consumers then made written requests for information under RESPA to the lender. The lender timely responded to the first request and considered the second one a duplicate that did not require a response. The consumers filed suit against the lender for violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601-2617, and for breach of the lender’s alleged duty of good faith and fair dealing. Their suit sought over $300,000 in damages, including damages related to their divorce. One of the consumers filed a Chapter 7 case while the case was pending, making the action an asset of her bankruptcy estate and resulting in substituion of her bankruptcy trustee as plaintiff in the action. The District Court granted the lender summary judgment.
Sykes, Easterbrook, Williams

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