The U.S. Court of Appeals for the Seventh Circuit determined that a borrower may not recover damages from a servicer when the only harm alleged is that the servicer’s response to a qualified written request under RESPA did not contain information the borrower wanted.
In the case at hand, the claimants were a married couple where the wife allowed her husband to use her inheritance to purchase a home. The home was foreclosed in 2012, but the sheriff’s sale had been delayed due to various reasons. The couple attempted to reopen the foreclosure case by filing a motion alleging a number of counterclaims that purportedly arose after their initial pleading. In order to assist them in their state court case, the husband submitted a qualified written request to his loan servicer. Two days short of RESPA’s required reply date, the couple filed suit against the servicer in federal district court alleging the servicer violated RESPA when it did not submit a response to the qualified written request. The claimants alleged that they were harmed by the servicer’s delayed response because they relied on the response to challenge the four year old foreclosure judgement entered against them. The claimants also alleged that once they received the servicer’s response, it did not include the information they felt they needed to assist them in challenging the mortgage foreclosure action. While the federal case was pending, the state court dismissed the claimant’s counterclaims as untimely.
After reviewing the facts, the district court granted the servicer’s motion for summary judgment. The district court determined that the claimants had not provided any evidence that the servicer actually violated RESPA. The district court reasoned that even if the servicer failed to completely answer all of the questions posed in the qualified written request, the claimants failed to show how any of the failures had caused them any harm.
The Seventh Circuit reviewed the case de novo and affirmed the district court’s decision. In making its determination, the Seventh Circuit first considered whether the claimants had standing. The court found that though the wife’s inheritance was used to purchase the home, the wife did not have standing to bring a suit under RESPA as the wife was not named on the property’s title, the mortgage, or the note. The Seventh Circuit determined that the husband did have standing to bring the suit, but the court found that the husband did not suffer any harm from the alleged RESPA.
Finally, the Seventh Circuit affirmed the district court’s dismissal of the claimants’ state law claim challenging the foreclosure. The court explained that the claimants could not argue any alleged flaws in the state court foreclosure because the Rooker-Feldman doctrine prevented lower federal courts from exercising jurisdiction over state court judgements rendered before the district court proceedings began.
The case is Moore v. Wells Fargo Bank, N.A., No. 18-1564 (7th Cir. 2018), and the opinion can be found here.