912 F. Supp. 2d 1320
S.D. Ala.2012Background
- Godfreys sued Nationwide Vinyl Siding & Home Improvement, LLC, First Choice Mortgage, LLC, and U.S. Bank, N.A. over a botched addition to their home.
- Nationwide and First Choice defaulted; the court entered a $180,500 default judgment against them in 2012.
- Plaintiffs pursue collection on that default while also pursuing claims against U.S. Bank in this action.
- Amended complaint asserts Counts One–Eight, including breach/negligence/state-law claims and federal claims under TILA/HOEPA and RESPA.
- HOEPA/TILA claim centers on a $4,800 payment to Nationwide at closing for a heat-pump installation.
- RESPA claim concerns failure to properly respond to a Qualified Written Request and related rescission issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $4,800 heat-pump charge is a HOEPA/TILA point and fee | Godfrey argues the payment is broker compensation or a finance charge triggering HOEPA disclosures. | U.S. Bank contends the payment is a construction cost paid to Nationwide, not broker or finance charge. | No genuine issue; $4,800 not a point/fee; loan not HOEPA high-cost. |
| Whether HOEPA/ TILA triggers require rescission/affects RESPA count | If HOEPA applies, borrower would have right to rescind; RESPA claim tied to HOEPA. | Since HOEPA/ TILA disclosures were not triggered, RESPA rescission claim fails. | RESPSA claim dependent on HOEPA outcome; Count Seven dismissed; Count Eight dismissed. |
Key Cases Cited
- Cunningham v. Nationscredit Financial Services Corp., 497 F.3d 714 (7th Cir. 2007) (HOEPA points and fees; brokers not involved where HUD-1 shows no broker)
- Curtis v. Secor Bank, 896 F.Supp.1115 (M.D. Ala. 1995) (pre-loan satisfaction costs not finance charges when lender has no involvement)
- Haynes v. Planet Automall, Inc., 276 F.R.D. 65 (E.D.N.Y. 2011) (purpose of TILA disclosures; pre-application costs and processing fees)
- Ford Motor Credit Co. v. Milhollin, 444 U.S. 555 (Supreme Court 1980) (disclosure and cost-of-credit balance in TILA interpretation)