930 F.3d 799
6th Cir.2019Background
- Tara Keen received title to a home after her husband Nathan (the only person who signed the loan) transferred his interest to her following divorce; both signed the mortgage but only Nathan signed the loan.
- Nathan died; Keen voluntarily made mortgage payments but later defaulted and applied to the loan servicer (Ocwen) for loss-mitigation options; Ocwen denied relief and foreclosed the property, which was sold to a third-party purchaser.
- Keen sued Ocwen (and the purchaser) in federal court alleging violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., asserting Ocwen failed to properly consider her requests to avoid foreclosure.
- District court dismissed Keen’s RESPA claims, concluding she lacked a cause of action because she was not a “borrower” under § 2605(f) (she was never personally obligated under the loan).
- The Sixth Circuit affirmed, holding RESPA authorizes suits only by “borrowers” as that term is ordinarily understood—persons personally obligated on a loan—not merely mortgagees or homeowners whose property is subject to a mortgage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Keen has a cause of action under RESPA § 2605(f) | Keen: § 2605(f) should cover successors in interest/homeowners like her; CFPB regulations interpret “borrower” to include successors-in-interest | Ocwen: § 2605(f) permits suits only by persons personally obligated on the loan (actual borrowers); mere mortgagors/homeowners lack a federal cause of action | Court: Affirmed—“borrower” means someone personally obligated on the loan; Keen is not a borrower and thus lacks a RESPA cause of action |
| Whether to apply liberal construction or CFPB regs to expand “borrower” | Keen: RESPA is remedial; apply liberal construction and CFPB Regulation X (defining successors-in-interest) as persuasive | Ocwen: Text is clear; courts cannot expand statutory causes of action; post hoc regulations are not controlling where statute is unambiguous | Court: Rejected expansion; ordinary meaning controls; post-claim CFPB regs are only persuasive and cannot override clear statutory text |
Key Cases Cited
- Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) (distinguishing loans from mortgages and discussing foreclosure context)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (statutory causes of action must come from Congress; statutory interpretation governs who may sue)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (constitutional standing principles)
- Alexander v. Sandoval, 532 U.S. 275 (2001) (causes of action to enforce federal law must be created by Congress)
- Taniguchi v. Kan Pacific Saipan, Ltd., 566 U.S. 560 (2012) (use ordinary meaning/dictionaries in statutory interpretation)
- United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365 (1988) (statutory interpretation is a holistic endeavor)
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71 (2006) (identical words in a statute are presumed to have the same meaning)
- Freeman v. Quicken Loans, Inc., 566 U.S. 624 (2012) (do not expand statutes beyond text based on vague policy aims)
- Pereira v. Sessions, 138 S. Ct. 2105 (2018) (when statute supplies a clear answer, interpretive detours end)
- Barzelis v. Flagstar Bank, F.S.B., 784 F.3d 971 (5th Cir. 2015) (holding plaintiff’s legal status under the loan determines whether she is a RESPA "borrower")