6th Cir. Holds Non-Borrower Mortgagor could not Sue Under RESPA
Home" Mortgage Banking Foreclosure Law" RESPA" sixth Cir. Holds Non-Borrower Mortgagor Could Not Sue Under RESPA
The U.S. Court of Appeals for the Sixth Circuit recently affirmed termination of a homeowner's claims under the federal Real Estate Settlement Procedures Act (RESPA), where the property owner complainant just signed the home mortgage, but not the note evidencing the loan.
The Sixth Circuit's holding enhanced that a complainant who does not have individual obligations under the loan contract is not a "customer," and therefore can not assert claims under RESPA, which extends reasons for action only to "debtors."
A copy of the opinion in Keen v. Helson is readily available at: Link to Opinion.
Couple debtors secured a loan protected by a home mortgage on their new home. Both debtors carried out the mortgage, however only the husband carried out the promissory note evidencing the loan. As is traditional, the mortgage specifically supplied that anybody "who co-signs this [home mortgage] but does not perform the [note]- i.e., the better half - "is not personally obligated to pay the amounts secured by this [home loan]"
The customers later on separated and the partner took title to the home. The other half passed away soon afterwards. Although she was not an obligor on the note, the spouse continued to pay in an effort to keep the home, however eventually fell back in her payments. After her loss mitigation efforts with the home loan's loan servicer stopped working, the home was foreclosed upon and sold to a third-party buyer.
The spouse filed match versus the servicer and third-party buyer, raising claims under various federal and state laws, consisting of a claim against the servicer under RESPA, 12 U.S.C. § 2601, et seq., and its executing regulation ("Regulation X"), 12 C.F.R. § 1024, et seq.
Home" Mortgage Banking Foreclosure Law" RESPA" sixth Cir. Holds Non-Borrower Mortgagor Could Not Sue Under RESPA
The U.S. Court of Appeals for the Sixth Circuit recently affirmed termination of a homeowner's claims under the federal Real Estate Settlement Procedures Act (RESPA), where the property owner complainant just signed the home mortgage, but not the note evidencing the loan.
The Sixth Circuit's holding enhanced that a complainant who does not have individual obligations under the loan contract is not a "customer," and therefore can not assert claims under RESPA, which extends reasons for action only to "debtors."
A copy of the opinion in Keen v. Helson is readily available at: Link to Opinion.
Couple debtors secured a loan protected by a home mortgage on their new home. Both debtors carried out the mortgage, however only the husband carried out the promissory note evidencing the loan. As is traditional, the mortgage specifically supplied that anybody "who co-signs this [home mortgage] but does not perform the [note]- i.e., the better half - "is not personally obligated to pay the amounts secured by this [home loan]"
The customers later on separated and the partner took title to the home. The other half passed away soon afterwards. Although she was not an obligor on the note, the spouse continued to pay in an effort to keep the home, however eventually fell back in her payments. After her loss mitigation efforts with the home loan's loan servicer stopped working, the home was foreclosed upon and sold to a third-party buyer.
The spouse filed match versus the servicer and third-party buyer, raising claims under various federal and state laws, consisting of a claim against the servicer under RESPA, 12 U.S.C. § 2601, et seq., and its executing regulation ("Regulation X"), 12 C.F.R. § 1024, et seq.