More tips on RESPA law, guidelines and violations for real estate agents and loan originators from former HUD investigator and RESPA expert, Dr. Gary Lacefield.

This week Dr. Lacefield reviews two court cases against Countrywide based on RESPA claims filed by two brothers in Georgia. The court dismisses one case but refuses to dismiss the other.

View the RESPANewsUpdate.com video here. This educational video and the RESPANewsUpdate.com website were created by WebCasting.com, based in Dallas, Texas. This video is provided for free, compliments of Premier Mortgage Funding, Inc.

For more about Dr. Lacefield, visit RiskMitigation.net or GoGetRealEstate.com/Get/GLacefield.

Court Cases Filed by Two Brothers in Georgia.

Joel E. Price and Russell E. Price, et al., v. Countrywide Home Loans, (U.S. District Court for the Southern District of Georgia, Brunswick Division, Case No. Civ. A. CV205-015)

A U.S. District Court in Georgia refused to dismiss one consumer’s RESPA claim against Countrywide, but dismissed his brother’s claim because his allegations involved actions outside of the court’s jurisdiction.

The facts show that Joel Price financed a home purchase in Kingsland, Ga., with a mortgage loan from Countrywide in September 2003. His HUD-1 Settlement Statement indicated that Countrywide charged him $35 for a credit report that it performed. Joel Price’s brother, Russell Price, also financed a home purchase in Alabama through Countrywide in May 2004. Russell Price’s HUD-1 Settlement Statement also showed that Countrywide generated a credit report.

The Prices filed a putative class action complaint on the theory that, because Countrywide provided “no or nominal services” in rendering the credit reports, the company’s mark-up of service charge violates Section 8(b) of RESPA.

Countrywide filed a motion to dismiss for failure to state a claim upon which relief can be granted and for improper venue. In its motion to dismiss, arguing that Joel Price’s claim was untimely under RESPA’s one-year statute of limitations; Joel Price contended that he was entitled to avoid the limitations defense under the doctrine of equitable tolling. Countrywide also claimed that Russell Price filed his suit in the wrong district court. The company also contended it was entitled to dismissal because it provided a compensable service in arranging the credit reports.

What the court decided:
Finding that Joel Price’s claim was legally sufficient, but that the venue was improper for Russell Price’s claim, the court granted Countrywide’s motion in part, and denied it in part.

The court concluded that Joel Price’s claim was not time barred as a matter of law. “The practice of outsourcing tasks to vendors and then collecting more for the work from borrowers than is paid to the third parties, without performing a bona fide service justifying the extra expense, is an unearned fee charged in violation of Section 8(b) of RESPA,” the court stated. “Joel Price has stated a claim entitling him to relief.”

Because Russell Price’s property was located in Alabama, the court ruled that the venue was improper for his claim. “Venue is proper under RESPA ‘in the United States district court or in any other court of competent jurisdiction, for the district in which the property involved is located, or where the violation is alleged to have occurred,”‘ the court stated.