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Consumer Finance

Sixth Circuit Holds Non-Borrower Mortgagor Cannot Sue Under RESPA

By Christopher P. Hahn, Maurice Wutscher LLP

On July 18, 2019, in Keen v. Helson, et al, the U.S. Court of Appeals for the Sixth Circuit affirmed dismissal of a homeowner’s claims filed under the federal Real Estate Settlement Procedures Act (“RESPA”), where the homeowner plaintiff was a signatory only on the mortgage, but not the note evidencing the mortgage loan. As you may recall, RESPA only authorizes “borrowers” to sue. Because the term “borrower” is not defined under the statute, the Sixth Circuit was tasked with determining whether the plaintiff was a “borrower” with standing to bring suit under RESPA. Giving the term its ordinary meaning, the Sixth Circuit’s analysis illustrated that a “borrower” must have personal obligations on a loan, and declined to expand the term to include the plaintiff homeowner, on the basis that doing so would not be “broadly construing” RESPA, but rewriting the statute. The Sixth Circuit’s holding reinforced that a plaintiff who does not have personal obligations under the loan agreement is not a “borrower,” and thus cannot assert claims under RESPA.

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