44 F.4th 418
6th Cir.2022Background
- Hurst and her father obtained a mortgage in 2017 and Hurst applied for a loan modification in March 2018.
- Caliber acknowledged the application, requested additional documents, and deemed the application facially complete on April 5, 2018.
- On May 1, 2018 Caliber requested more/corrected documents with a 30-day deadline; Hurst submitted materials multiple times but missed at least two required items by May 31.
- Caliber sent a notice on May 31 that the application was incomplete and initiated state-court foreclosure on June 18, 2018; Hurst incurred ~$13,922 in fees defending the foreclosure.
- Communications between Hurst and Caliber involved about 23 letters and 47 calls, during which Caliber staff gave conflicting, misleading, or untimely guidance about required documents (e.g., 4506-T and bank statements).
- Hurst ultimately received a permanent modification and the foreclosure was dismissed; she sued under RESPA/Regulation X alleging dual-tracking, lack of reasonable diligence, and inadequate notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | Hurst's foreclosure defense fees are a concrete injury supporting Article III standing | Fees cannot create standing when incurred as part of the same litigation absent other injury | Court: Hurst has standing; fees were incurred in a separate state action and are recoverable damages under RESPA |
| Dual-tracking (12 C.F.R. §1024.41(f)(2)) | Caliber foreclosed while a facially complete application was pending, violating the dual-tracking ban | Application was no longer protected after Hurst failed to provide requested info by the 30-day deadline | Affirmed: no violation — application became incomplete as of May 31, so foreclosure on June 18 did not violate the rule |
| Reasonable diligence (12 C.F.R. §1024.41(b)(1)) | Caliber failed to exercise reasonable diligence by giving conflicting/misleading guidance and not promptly identifying document defects | District court focused only on whether Caliber requested documents it already had and found no failure | Vacated & remanded: district court applied too narrow test; conflicting/misleading communications may show lack of reasonable diligence |
| Adequate notice (12 C.F.R. §1024.41(b)(2)) | Some Caliber letters failed to specify deficiencies with sufficient detail | Caliber provided the required written notice after initial application receipt and subsequent letters responded to new submissions | Affirmed: initial receipt letter satisfied the regulation; later communications about supplemental submissions do not violate §1024.41(b)(2) |
Key Cases Cited
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (Article III standing requirements)
- Uzuegbunam v. Preczewski, 141 S. Ct. 792 (2021) (limits on using litigation expenses to establish standing)
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (standing exceptions and related principles)
- Ward v. Nat’l Patient Acct. Servs. Sols., Inc., 9 F.4th 357 (6th Cir. 2021) (attorney-fee expenditures and standing analysis)
- Marais v. Chase Home Fin. LLC, 736 F.3d 711 (6th Cir. 2013) (attorney fees as actual damages under RESPA)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013) (limits on manufactured standing through anticipated expenditures)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment and evidence inferences)
- V & M Star Steel v. Centimark Corp., 678 F.3d 459 (6th Cir. 2012) (de novo review of summary judgment in the Sixth Circuit)
- Glennborough Homeowners Assoc. v. U.S. Postal Serv., 21 F.4th 410 (6th Cir. 2021) (forfeiture of standing arguments and appellate discretion)