Molosky v. Washington Mutual, Inc.
2011 U.S. App. LEXIS 25436
| 6th Cir. | 2011Background
- Moloskys obtained a mortgage from Bank of Ann Arbor; Washington Mutual later servicing the loan.
- The note included a Borrower’s Right to Prepay allowing full or partial prepayments without a prepayment charge.
- The Release provision allowed a fee for releasing the security instrument if paid to a third party and permitted under law.
- Moloskys prepaid the loan, and WaMu charged a $30 payoff-statement fee and a $14 recording fee.
- District court held state-law claims preempted by HOLA and RESPA claim nonmeritorious; one contract-based claim not preempted was remanded for consideration.
- On appeal, the court remanded only the contract claim regarding the payoff statement fee; all other state-law claims were affirmed or dismissed on preemption or failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preemption of state-law claims under HOLA reg. | Moloskys contend state laws govern payoff/recording fees. | WaMu argues HOLA and OTS regulations preempt state law. | Contract claim not preempted; state-law claims preempted or dismissed as to others. |
| RESPA applicability to post-settlement fees | Fees relate to settlement services and are within RESPA §2607. | Post-settlement fees are not settlement services under RESPA and not actionable. | RES-PA claim rejected; payoff fee not a settlement service. |
| Michigan Usury Act preemption | Usury act governs prepayment fees. | OTS preemption extends to loan-related fees. | Michigan Usury Act preempted by HOLA, claims dismissed. |
| Contract claim on payoff fee under §560.2(c) | Contract terms should be enforced despite preemption. | Contract terms survive only if not preempted; but preemption analysis controls. | Contract claim not preempted; merits require remand for further consideration. |
| Deed recording statute and consumer protection claims | Statutory claims prohibit recording fees and deceptive practices. | Federal authorization of WaMu to service loans exempts claims. | Claims fail on state-law grounds; exemptions apply; dismissed. |
Key Cases Cited
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (U.S. 1995) (contract preemption distinctions; state contract law may enforce terms.)
- In re Ocwen Loan Servicing, 491 F.3d 638 (7th Cir. 2007) (servicing vs. origination distinctions; preemption limits under §560.2(c).)
- Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) (OTS preemption framework; field preemption and servicing context.)
- United States v. Locke, 529 U.S. 89 (U.S. 2000) (strong federal presence in regulatory fields supports preemption.)
- Washington Mut. Bank v. Wimbush, 619 F.3d 632 (6th Cir. 2010) (application of HOLA preemption; federal savings associations context.)
- Cohen v. JP Morgan Chase & Co., 498 F.3d 111 (2d Cir. 2007) (RESPA settlement-service interpretation context.)
- Fidelity Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141 (U.S. 1982) (OTS preemption breadth and field occupancy.)