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					    Case 1:08-cv-01857        Document 30        Filed 02/14/2008      Page 1 of 32



                   IN THE UNITED STATES DISTRICT COURT
                  FOR THE SOUTHERN DISTRICT OF ALABAMA
                            SOUTHERN DIVISION

MINNIE A. LINDSAY and ARTHUR             )
WALKER , on behalf of themselves and all )
others similarly situated,               )
                                         )
        Plaintiffs,                      )          CASE NO.: 07-859-KD-M
                                         )
vs.                                      )
                                         )
AMERIQUEST MORTGAGE                      )
COMPANY, INC., et al.                    )
                                         )
        Defendant.                       )

          PLAINTIFFS’ RESPONSE TO MOTION TO DISMISS OF LFC

                                 RELEVANT FACTS

The Lindsay Transaction

       On or about December 15, 2006, Ms. Lindsay entered into a loan transaction with

Ameriquest Mortgage Company (AC ¶ 12). It was a “federally related” loan transaction

as described at 12 U.S.C. §§ 2601 et seq. (“RESPA”). (AC ¶ 9). The defendant LFC

acted as closing agent for Ms. Lindsay’s loan. (AC ¶ 45). Incident to the transaction

Ms. Lindsay was charged $450.00 for “settlement or closing fee”, $175.00 for “abstract

or title search”, $200.00 for “signing fee”, $25.00 for “wire fee”, $30.00 for “delivery

fee”, $100.00 for “recording fees”, $35.00 for “recording service fee”, (AC ¶ 46). The

$450.00 “settlement or closing fee” paid by Ms. Lindsay fully compensated LFC for all

the services it performed or arranged regarding her loan. All of the other charges listed

above were padded and marked up by LFC (AC ¶ 48). LFC paid a third party to render a

title report regarding our property at a cost of less than $100.00 then without performing

any additional compensable work LFC added the additional charges (AC ¶ 49).
    Case 1:08-cv-01857        Document 30       Filed 02/14/2008      Page 2 of 32



Additional amounts were also added to the notary fee, the signing fee, wire fee and

delivery fee. (AC ¶¶ 50 and 51). Her recording fee was also marked up. The actual

recording fee paid to the probate court was only $58.00 and Ms. Lindsay was charged

$100.00 representing a markup of $42.00 (AC ¶ 52). Finally, she was also charged

$35.00 for a “recording service fee” that was also unearned, that is no compensable

service was performed by LFC in exchange for the recording service fee. (AC ¶ 54). As

a matter of fact, each of the fees complained of were padded and duplicative because the

settlement or closing fee fully compensated for any and all services it performed or

arranged regarding the Lindsay transaction (AC ¶ 55).

The Walker Transaction

       Mr. Walker’s transaction was closed by LFC on January 23, 2007. Walker paid

$150.00 for “settlement or closing fee” and this fee fully compensated LFC for all

services it performed or arranged in the Walker transaction (AC at ¶¶ 56 and 57). Walker

was also charged $175.00 for “abstract or title search.” He alleged that LFC paid a third

party to render a title report on this property at a cost of less than $100.00 and then

without performing any additional service marked the charge up an additional $75.00.

He was also charged a “signing” fee of $200.00, a wire and delivery fee. These fees were

also marked up without the performance of any additional service by LFC (AC at ¶¶ 58

through 62).   LFC also sold Walker a title insurance policy issued through United

General Title Insurance Company. He was charged $275.00 for the lender’s policy even

though the legal rate as determined by United’s rates filed and approved by the Alabama

Insurance Department was only $$145.00. (AC at ¶¶ 63 through 67) Finally he was also

charged $88.00 for “recording fees” when the actual cost of the recording fee was $53.00.




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LFC performed no compensable service for the additional title insurance premium or the

additional $45.00 he was charged for recording fees. (AC at ¶ 68) Just as in the Lindsay

transaction each of the fees mentioned above were padded and are duplicative of the

settlement and closing fee which compensated LFC in full for all the services it

performed or arranged regarding Mr. Walker’s loan. (AC at ¶ 70.)

                                  ARGUMENT
                          MOTION TO DISMISS STANDARD

          A new motion to dismiss standard was recently announced by the United States

Supreme Court in Bell Atlantic Corporation v. Twombly, 127 S.Ct. 1955, May 21st 2007.

Twombly dealt with a complaint which made non-specific conclusory allegations that the

defendant had violated anti-trust laws which the Court found did not put the defendant on

notice of what actual conduct it was charged with.

          The Eleventh Circuit Court of Appeals in Watts v. Florida International

University, 495 F.3d 1289 (August 17th 2007), held that the Twombly decision means that

“A formulaic recitation of the elements of a cause of action will not do.” citing

Twombly at 127 S.Ct. 1955, 1965 167 L.Ed. 2d 929 (2007) and that “[f]actual allegations

must be enough to raise a right to relief above the speculative level.” Id.

          No such defect exists here: LFC has been put on notice by the complaint exactly

which charges it has wrongfully made, the amount of the wrongful fees, the statute which

has been violated, and the damages sought. LFC’s argument reads like a common-law

demurer, and cannot be seriously advanced to complain that it is unable to ascertain what

the complaint against it is. Applying the correct standard, the instant motion is due to be

denied.

                   LINDSAY’S CLAIMS ARE NOT TIME BARRED



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       LFC states in its brief, at pp 3-4, that Ms. Lindsay’s claims time barred. They are

not barred and LFC knows it. In Case Number: 07-160, Edwards v. Lenders First Choice

et al., a class action in which LFC is represented by the same counsel, now pending in

this district, almost identical allegations have been made regarding the practices of LFC.

The Edwards case was flied on March 2nd 2007.

       It is well settled law that “commencement of a class action suspends the

applicable statute of limitations as to all asserted members of the class who would have

been parties had the suit been permitted to continue as a class action.” American Pipe &

Construction Co. v. Utah, 414 U.S. 538, 554 (1974); see also Crown, Cork & Seal Co. v.

Parker, 462 U.S. 345, 350 (1983). Therefore Lindsay’s claims are not time bared as LFC

suggests.

 PLAINTIFFS HAVE STATED A CLAIM FOR VIOLATION OF SECTION 8(b)
  OF RESPA WHICH PROHIBITS THE ACCEPTING OF UNEARNED FEES

       RESPA was enacted in 1974 to address what Congress perceived as “abusive”

practices which “unnecessarily” increased the settlement costs borne by consumers in

connection with mortgage loans out of concern over predatory lending practices in the

housing industry. RESPA is a consumer protection statute that regulates the real estate

settlement process. See 12 U.S.C. § 2601(a); Hardy v. Regions Mortg., Inc., 449 F.3d

1357 (11th Cir. 2006). As a remedial consumer protection statute, the purpose of RESPA

is “to ensure that consumers throughout the Nation are . . . protected from unnecessarily

high settlement charges caused by certain abusive practices that have developed in some

areas of the country.” 12 U.S.C. § 2601(a). As Congress has indicated, “[i]t is the

purpose of [RESPA] to effect certain changes in the settlement process for residential real




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estate that will result . . . in the elimination of . . . fees that tend to increase unnecessarily

the costs of certain settlement services.” 12 U.S.C. § 2601(b).

        Pleading a RESPA violation under Section 8(b) is not difficult. There is no

heightened pleading standard or requirement. In Sosa v. Chase Manhattan Mortg. Corp.,

348 F.3d 979, (11th Cir. 2003) the 11th Circuit Court instructs us, at 984, that “[t]o state a

claim under the applicable part of subsection 8(b) of RESPA, the borrowers must allege

that Chase [or here LFC] accept[ed] any portion, split or percentage of any charge ... for

the rendering of a real estate settlement service ... other than for services actually

performed. 12 U.S.C. § 2607(b).” The borrowers here have done so.

        The problem with the plaintiff’s pleading in Sosa is apparent from a reading of the

Sosa’s complaint. It was truly deficient. (A copy of the Amended Class Action Complaint

from Sosa is attached hereto as Exhibit A). The plaintiffs in Sosa apparently tried to

plead a disclosure violation and used language such as:

        “Defendant never disclosed to plaintiff that defendant retained any portion of
    the courier fees.” Exhibit A, ¶14.

       “Defendant intentionally or negligently created the misimpression that the
    courier fees were for charges assessed, collected for and paid to third parties that
    provided courier services. Defendant created such impression to earn secret
    profits by deceiving plaintiffs and the Class into believing that the courier fees
    were paid to third parties.” Exhibit A, ¶15.

        “Defendant’s unfair and deceptive collection of courier fees deprived
    plaintiffs and the Class of the ability to negotiate fees that they reasonably
    believed were paid to other parties.” Exhibit A, ¶16.

        The Sosa Amended Complaint contained two counts. Count One referred to

§8(b) of the Real Estate Procedures Act and Count Two was a state law claim for unjust

enrichment. In Count One of the Sosa Complaint the plaintiffs pled as follows:

“Defendant paid only a portion of the courier fee charged to plaintiff to a third party for



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courier services.” ¶35. “Defendant retained a portion of the courier fees charged to

plaintiffs.” ¶36. “Defendant’s conduct constitutes §8(b) of RESPA.” ¶37. “Plaintiffs

and the Class have suffered damages as a result of defendants’ violation of §8(b) of

RESPA.”

       Although the Sosa Complaint mentions and refers to § 8(b) of the Real Estate

Settlement Procedures Act in several places, nowhere in it is there any allegation that any

fee was for “other than services performed” or an allegation that a fee or a portion of a

fee unearned and retained. The plaintiffs here have pled the RESPA violation correctly as

shown above.

       A careful reading of Sosa also confirms the fact that the Circuit Court interprets

the statute to mean that a single fee can be split into earned and unearned portions. In

other words, a service provider can violate Section 8(b) by accepting a fee if any portion

of it is unearned. “[T]he payment must be made for some reason other than in exchange

for services actually rendered… A culpable provider could accept the entire fee, knowing

that part of it was not for services actually performed, however. In such a case the

provider could be liable as an acceptor, but the consumer would not be liable as the giver

of the unearned portion of the fee.” Sosa at 983. Here, LFC is that “culpable provider.”

       It is difficult to guess at what additional facts must be pled to give LFC proper

notice of what is charged, even under Twombly .

                           OVERCHARGES v. MARKUPS

       LFC says that Plaintiffs have alleged that they were overcharged and that

overcharges are legal. The dichotomy between an overcharge and a mark-up is not

helpful in analyzing these cases. Forcing the Plaintiffs’ allegations into one category or




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the other is too narrow a construction of the statute. The statute does not outlaw mark-

ups, nor does it legitimize overcharges. The statute outlaws charges for settlement

services not actually performed. Stated another way, unearned charges are illegal in

RESPA regulated transactions. So long as the Complaint alleges a fee was charged for

something other than for services rendered, a cause of action has been stated.

       LFC distorts this concept of “overcharges” in an attempt to shield itself from

liability for practices which amount to nothing less than stealing money from borrowers.

Take, for example, the recording fees. LFC is marking these up, even though it was

already paid for any arrangement by its settlement fee. Certainly it knew or could have

discerned what the actual filing fees were at the time that the charges were made, yet

LFC or its employees included in addition to the Lindsay recording fee and additional

$42. As if that was not enough, LFC also charged Lindsay a “recording service fee” of

$35. What could LFC’s excuse for that be? Perhaps the LFC will say that Lindsay’s

recording needed some servicing.

       LFC attempts to convince this Court that the decisions which refuse to recognize

a RESPA claim for “overcharges” somehow immunizes it for this behavior. However,

because the essence of this the mark-ups is the collection of “duplicative” and unearned

fees. The practice clearly falls within the “abusive” practices prohibited in Section 8(b).

This is illustrated by a close look at the statute, HUD’s regulations and policy statements,

and a closer examination of the cases discussing “overcharges.”

       Two cases cited by LFC, Kruse v. Wells Fargo Home Mortg., Inc., 383 F.3d 49

(2d Cir. 2004) and Santiago v. GMAC Mortg. Group, Inc., 417 F.3d 384, 390 (3d Cir.

2005), do not stand for the proposition that a service provider may charge whatever it




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wants, even an illegal title insurance rate, as long as some service is provided. Both those

cases, like Sosa, reaffirm that position taken by HUD that Section 8(b) prohibits the

marking up a settlement charge such that a provider is receiving a fee “other than for

services rendered.” On the other hand, both those opinions state, in contradiction to

HUD’s position, that Section 8(b) does not allow for a cause of action for “overcharging”

i.e., charging an amount in excess of the “reasonable” value of services provided.

       The Second Circuit in Kruse addressed two alleged violations: (1) That the

lender’s underwriting fee violated Section 8(b) because the lender provided that service

itself at a cost of $20; over 25 times the amount of the fee was charged to plaintiff; and

(2) That the lender’s charge for “tax service” violated Section 8(b) because that charge

exceeded what the lender paid a third party vendor and the lender failed to provide any

additional services. The Kruse Court held that the first allegation amounted only to a

claim for “overcharging” which the Court held was not a cognizable claim under RESPA.

The court held that Section 8(b) does not require a parsing out of what fees are

“reasonable” and which ones are “unreasonable” fees. Id. at 56.

       The Kruse court, as in Sosa, held that Section 8(b) prohibits the retention of a fee

other than for services rendered. If the lender paid the tax service provider less than it

charged the borrower and did not perform additional services, that charge was “marked-

up” in violation of Section 8(b). Id. at 61-62.

       The Third Circuit in Santiago v. GMAC Mortg. Group, Inc., 417 F.3d 384, 390

(3d Cir. 2005), reached the same result as Kruse court. In Santiago, the plaintiff attacked

three fees: (1) an $85 “tax service fee”; (2) a $20 “flood certification fee”; and (3) a $250

“funding fee.” The district court dismissed the entire case and the Third Circuit reversed.




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As in Sosa and Kruse, the Santiago court stated that Section 8(b) prohibited the marking

up of a fee such that a charge is accepted other than for services rendered. Id. at 389.

Therefore, the dismissal of the complaint was in error to the extent that the complaint

alleged a mark-up. Id.

       Like the court in Kruse, the Santiago court refused to recognize a claim under

Section 8(b) for charging more than the “reasonable” value of the services rendered.

To accept Santiago’s reading would require dividing charges for services provided into
“reasonable” and “unreasonable” portions - that is, the portion for “services rendered”
and the portion for “no services rendered.” Not only does Section 8(b) not make this
distinction, but there is no other language in the body of the statute that instructs how to
define the reasonable and unreasonable portions of a charge.
Id. at 387. However, the Santiago court endorsed HUD’s view that Section 8(b) prohibits

the marking up of a settlement fee, i.e., accepting an amount other than for services

performed. Id. at 389.

       In Krupa v. Landsafe, Inc.--- F.3d ----, 2008 WL 169692 C.A.11 (Ga.), 2008, the

Eleventh Circuit recently explained its holding in Sosa saying, “In Sosa the plaintiffs

claimed that the mortgage company, Chase Manhattan, violated the anti-markup

provision because “Chase charged borrowers $50 for courier or messenger fees,” it “paid

only a portion of that fee to third-party contractors,” and “Chase ‘created the

misimpression’ that the fees were entirely paid to the third parties.” Id. We affirmed the

dismissal of the plaintiffs’ complaint because they did not allege that “the portion of the

charge that Chase retained was accepted ‘other than for services actually performed,’ i.e.,

that Chase performed no services that would justify its retention of a portion of the fee.”

Id.” As stated above the plaintiffs here have made such an allegation.

       A Court in this district recently found that an allegation of the acceptance of an

unearned portion of a title insurance premium by a settlement agent states a claim for a



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RESPA violation. In Mallory v. GMS Funding, LLC et al., Slip Opinion, 2008 WL

276578 S.D. Ala., 2008, the District Court did not dismiss the Mallorys’ complaint

because it found an allegation that a disputed illegal surcharge was added to a legal title

insurance premium and that no service was rendered for the surcharge stated a claim.

The complaint alleges that the filed rate established the maximum legal rate for the policy
at $179. An agreement between U.S. Title and the title insurer also required U.S. Title to
charge only the filed rate of $179, which included both the cost of the policy and U .S.
Title’s commission from the insurer. U.S. Title performed tasks in connection with the
issuance of the policy, but it was compensated for those tasks through other fees imposed
on the plaintiff at closing, including the closing fee ($175), abstract fee ($37.50), and
handling fee ($75). Under these circumstances, the $76.85 charged the plaintiff beyond
the filed rate did not compensate U.S. Title for services actually performed under Section
8(b). U.S. Title split the $76.85 with the title insurer.
        …

But the complaint also alleges that the $76.85 charge violates Section 8(b) because the
defendant was already compensated for its services in connection with the title policy by
payments it received from the plaintiff under other line items on the HUD-1, such that the
$76.85 was not for such services. The defendant, which neither acknowledges nor
addresses this portion of the plaintiff’s claim, has not shown entitlement to its dismissal.
Id. At 2.

       The Plaintiffs have made precisely the same allegations here: That LFC was fully

compensated for any services it provided through its settlement fee yet still tacked on

additional unearned charges. The Mallory Court also spoke to LFC’s argument that

Walker must exhaust his administrative remedies Under the Alabama Insurance Code

saying in footnote 3, “This conclusion obviates the consideration of the defendant’s

alternate grounds that the plaintiff’s claim is barred by the filed rate doctrine, by failure to

exhaust state administrative remedies, and by the doctrine of primary jurisdiction.”

        “Congress passed RESPA in order to reduce the costs consumers pay to settle

their real estate transactions.” Sosa at 981. Section 8(b) is aimed at furthering the




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Congressional goal of forbidding the collection of unearned fees. Section 8(b) of RESPA

provides as follows:

No person shall give and no person shall accept any portion, split, or percentage of any
charge made or received for the rendering of a real estate settlement service in connection
with a federally related mortgage loan other than for services actually performed.
12 U.S.C. § 2607(b).

       The pertinent language of the statute may be summarized as, “no person shall

accept any portion of any charge other than for services actually performed” or this “no

person shall accept any percentage of any charge other than for services actually

performed.” Restated in the context of this case, LFC may not mark up fees such as

those for “title search” and recording because others performed those services and LFC

had already been fully compensated by its closing fee. LFC cannot charge more than the

filed rate for title insurance and then try to hide behind § 2607(c) either because its

entitlement to a commission for the sale of title insurance is not unconditional. It must be

earned. Section 2607(c) says, “Nothing in this section shall be construed as prohibiting

(1) the payment of a fee … (B) by a title company to its duly appointed agent for services

actually performed in the issuance of a policy of title insurance[.]” (Emphasis added.)

       The Plaintiffs’ claims do not allege an overcharge claim rejected in Santiago and

Kruse. The Complaint does not allege the Walker was charged more than a “reasonable”

amount for title insurance or any other fee. The Complaint alleges that Walker was

charged for the title insurance based on published rates, and then charged something extra

in addition to the legal rate. Plaintiffs also alleged that fees for services performed by

others were marked up where no additional service was provided.

                     HUD UNEQUIVOCALLY INTERPRETS
                  SECTION 8(b) TO PROHIBIT LFC’S CONDUCT




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       “It is HUD’s position that Section 8(b) proscribes the acceptance of any portion or

part of a charge other than for services actually performed. Inasmuch as Section 8(b)’s

proscription against ‘any portion, split, or percentage’ of an unearned charge for

settlement services is written in the disjunctive, the prohibition is not limited to a split. In

HUD’s view, Section 8(b) forbids the paying or accepting of any portion or percentage of

a settlement service—including up to 100%—that is unearned, whether the entire charge

is divided or split among more than one person or entity or is retained by a single person.

Simply put, given that Section 8(b) proscribes unearned portions or percentages as well

as splits….” 2001-1 SOP; 66 Fed. Reg. at 53,058.

       Before HUD’s pronouncement above some courts that held Section 8(b) of

RESPA was not applicable to overcharges. See Echevarria v. Chicago Title and Trust

Co., 256 F.3d 623 7th Cir, July 05, 2001 and Willis v. Quality Mortgage U.S.A., Inc., 5

F.Supp.2d 1306, 1308-09 (M.D.Ala.1998). RESPA contains an express delegation of

congressional authority: the act authorizes the Secretary of HUD “to prescribe such rules

and regulations, to make such interpretation, and to grant such reasonable exemptions for

classes of transactions, as may be necessary to achieve the purposes of this chapter.” 12

U.S.C. § 2617(a).

       It was in compliance with its congressional directive and in response to the then-

recent court rulings of Willis and Echevarria, that the Department of Housing and Urban

Development on October 18, 2001 issued its 2001-1 Statement of Policy clarifying

“Lender Payments to Mortgage Brokers, and Guidance Concerning Unearned Fees Under

Section 8(b).” 2001-1 SOP; 66 Fed. Reg. 53,052.




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         The 2001-1 SOP reiterated HUD’s “long-standing” position that it was a violation

of Section 8(b) and HUD’s implementing regulations “for one settlement service provider

to charge the consumer a fee where no, nominal or duplicative work is done, or the fee is

in excess of the reasonable value of goods or facilities provided or the services actually

performed.” 2001-1-SOP; 66 Fed. Reg. at 53,052.

         In the 2001 Policy Statement, HUD clarified that Section 8(b) could be violated in

at least the following three ways:

(1)      Two or more persons split a fee for settlement services, “any portion of
         which is unearned”; or

(2)      One settlement service provider marks up the cost of the services
         performed or goods provided by another settlement service provider
         without providing additional actual, necessary and distinct services, goods,
         or facilities to justify the additional charge; or

(3)      One settlement service provider charges a fee where no, nominal or
         duplicative work is done or the fee is in excess of the reasonable value of
         goods or services provided.

         66 Fed. Reg. at 53057. (Emphasis added)

         Most of Plaintiffs’ claims fall under the second and third numbered provisions

above, whereby “one settlement service provider marks-up the cost of the services

performed or goods provided by another service provider without providing additionally

actual, necessary, and distinct services, goods, or facilities to justify the additional

charge” and/or “one settlement service provider charges the consumer a fee where no,

nominal or duplicative work is done…”

         The claim for excessive fees for title insurance could fall under any of the three.

HUD regards these three scenarios as “legally indistinguishable.” See 2001-1 SOP p. 20.




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       HUD’s interpretation is not only a plausible one which comports with the plain

language of the statute, it is, the only reasonable reading. The phrases “any portion” and

“any percentage” are not superfluous. If a settlement charge is made, any part of which is

unearned, including the whole, then that portion of the charge for which no service is

actually performed is an unearned fee and illegal.

       The conclusion that RESPA may be violated by accepting an unearned portion of

a settlement service fee is further supported by the regulations. 24 CFR § 3500.14(c)

provides:

        No person shall give and no person shall accept any portion, split, or percentage
of any charge made or received for the rendering of a settlement service in connection
with a transaction involving a federally-related mortgage loan other than for services
actually performed. A charge by a person for which no or nominal services are performed
or for which duplicative fees are charged is an unearned fee and violates this Section. The
source of the payment does not determine whether or not a service is compensable. Nor
may the prohibitions of this part be avoided by creating
an arrangement wherein the purchaser of services splits the fee. (Emphasis added.)

       HUD reiterated its interpretation of Section 8(b) of RESPA in 1996 as follows:

 HUD believes that Section 8(b) of the statute and the legislative history make clear that
no person is allowed to receive ‘any portion’ of charges for settlement services, except
for services actually performed. The provisions of Section 8(b) could apply in a number
of situations: (1) where one settlement service provider receives an unearned fee from
another provider; (2) where one settlement service provider charges the consumer for
third-party services and retains an unearned fee from the payment received; or (3) where
one settlement service provider accepts a portion of a charge (including 100% of the
charge) for other than services actually performed.
61 FR 29249

LFC MAY NOT JUSTIFY UNEARNED FEES WITH VAGUE ASSERTIONS
THAT IT PERFORMED SOME OTHER SERVICE IN RETURN FOR THE FEE

       LFC does not deny that it has marked up fees for settlement services rather it

argues that it performed additional services in return for the marked-up portion of the fees

at issue. (Doc. 6, Memo. Mot. Dismiss at pp. 2, 4-6 and 9.) This is not relevant to the




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pleading issue presented by LFC=s Motion to Dismiss, but at most creates a factual issue

to be litigated. Edwards v. Accredited Home Lenders, et al, slip op., (Doc. 61) p. 16; CV-

07-00160 (S.D. Alabama October 23, 2007)(A copy of this opinion is attached hereto as

Exhibit “B”) In connection with the disputed charges LFC says in its brief on page 5 that

it performed services such as: “obtaining services from third parties,” “serving as a title

insurance agent,” “in connection with the title search,” “obtaining the services of a

notary.”

          LFC offers no evidence in support of its contention that it performed these other

services and even if it did this is not the time for evidence. The allegation of the Plaintiffs

is that LFC was fully compensated by its closing fee and that there were no compensable

services performed in exchange for the disputed portion of these fees. By making the

statements above LFC has admitted that the disputed services were indeed performed by

others.

          All of the items paid by LFC must be separately disclosed on the HUD-1

settlement statement which also must disclose to whom they were paid. See 24 CFR

Appendix A to Part 3500, Instructions for Completing HUD-1 and HUD-1A Settlement

Statements. The instructions say in pertinent part:

The settlement agent shall complete the HUD - 1 to itemize all charges imposed upon the
Borrower and the Seller by the Lender and all sales commissions, whether to be paid at
settlement or outside of settlement, and any other charges which either the Borrower or
the Seller will pay for at settlement….

          These instructions were clarified by HUD in 2000 in a letter from one of HUD’s

general counsels to the Massachusetts Bankers Association. (Attached hereto as Exhibit

“C”.) It states in relevant part:

HUD-1 Questions



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(4) Does the fee paid to the borrower’s own attorney need to be listed on the HUD-1?
The bank does not require (this attorney).

Answer: An item should be listed on the HUD-1 if it is required by the lender or if it is
to be paid for at closing or settlement. The Instructions provide that the HUD-1 shall
itemize all charges imposed upon the borrower and the seller by the lender and all sales
commissions, whether to be paid at settlement or outside of settlement, and any other
charges which either the borrower or the seller will pay for at settlement. Charges to be
paid outside of settlement shall be included on the HUD-1 and HUD-1A but marked
“P.O.C.” (Paid Outside of Closing) and shall not be included in computing totals.
“P.O.C.” items should not be placed in the borrower or seller columns, but rather on the
appropriate line next to the columns and should not be used in computing totals. For all
items except for those paid to and retained by the lender, the name of the person or firm
ultimately receiving the payment should be shown.

Questions Relating to Title Charges

(1) Is it required to indicate anywhere on the HUD-1 the actual dollar amount of the
commission earned by the settlement agent (closing attorney) for issuing a title insurance
policy?

Answer: Yes. The Instructions specifically state that the HUD-1 must “itemize all
charges imposed upon the borrower and the seller by the lender and all sales
commissions, whether to be paid at settlement or outside of settlement.” (See
Instructions)(Italics added).

 (2) Is it a requirement that line 1113 be completed indicating what services the closing
agent did to earn his/her commission for the title insurance policy?

Answer: The Instructions clarify that payments to settlement agents are to be detailed on
lines 1101 through 1106 in accordance with the services performed by the agent in the
transaction. If an attorney acts as the agent, the total amount of the payment should be
listed on line 1107, along with entries on the blank line immediately below to identify
item numbers of the services listed which are covered by that overall fee. If line 1107 is
already being used to disclose the fees and services of the attorney in representing any of
the parties to the transaction, then line 1113 should be used to disclose the commission
(and those services covered by the commission) that the attorney is earning in his or her
role as title agent in the transaction. (See Instructions).

(3) If a closing agent bundles services under line 1107, must they indicate under line
1107 the items 1101-1106 that were included in the fee shown in 1107?

Answer: Yes, the HUD-1 form is clear in this regard. (See Instructions).




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   Case 1:08-cv-01857         Document 30         Filed 02/14/2008       Page 17 of 32



(4) If the fee listed on 1108 is for the cost of the title insurance policy, does the closing
agent need to list any other numbers (1101-1106) beneath line 1108?

Answer: Yes, the HUD-1 form is clear in this regard. As per the Instructions, line 1108
should list the overall fee for the policy and the blank line beneath it should disclose the
item numbers of the services which are covered in the overall fee. (See Instructions).

       Exhibit “D” attached hereto is a true and correct copy of a HUD-1 settlement

statements prepared by LFC and given to the Plaintiffs at the closing of their real estate

transactions. According to the settlement statement no third parties were involved in the

title charges. LFC admits however that it used third parties for various services in its brief

but none were disclosed on the Plaintiffs’ settlement statements. Nor was there disclosed

any fees for “arranging” any services. LFC’s argument is nothing less than a subterfuge.

What LFC is arguing is that it can label a charge as one thing, and then justify it as if it

were another. According to its argument RESPA would allow LFC to charge $1,000.00

for a recording fee or title insurance as long as it performed or even arranged or obtained

some other service.

       RESPA requires meaningful disclosure of settlement services and charges, and

HUD has prescribed the uniform HUD-1 settlement statement as the primary vehicle for

furnishing a full explanation of settlement service charges. 12 U.S.C. § 2603; See also 24

C.F.R. § 3500 App. A (“This form is to be used as a statement of actual charges and

adjustments to be given to the parties in connection with the settlement.”)(emphasis

added). Use of the term “actual charges” evidences HUD’s requirement for preciseness as

to service and charge.

       RESPA’s goal of meaningful disclosure cannot be achieved unless each

settlement service is listed separately with a corresponding statement of the amount the

provider will charge for that service. That is why settlement services and charges must be



                                             17
      Case 1:08-cv-01857          Document 30          Filed 02/14/2008   Page 18 of 32



unbundled and listed individually on the HUD-1. LFC’s suggestion that the mark-ups

covered other services would be another RESPA violation and is contrary to RESPA’s

goal of meaningful disclosure. Also, as shown below LFC’s illegal mark-ups also render

the Truth-in-Lending Act1 (TILA) disclosures on loans it closes inaccurate.

          LFC asserts that it performed some service for the disputed fees. Its argument

exposes its belief that any service it may or may not have performed is available to justify

any settlement charge it assessed, and ignores RESPA’s and TILA’s disclosure

requirements. If the Court were to accept LFC’s attempted subterfuge, it would destroy

RESPA’s and TILA’s disclosure schemes. In the future, all a lender or service provider

would have to do to justify an unearned fee is claim that the fee was actually

compensation for another service or several services listed on the HUD-1 settlement

statement.

          LFC’s argument is can be paraphrased as: “Yes, it’s true, others performed the

abstract and title search for less than we charged the Plaintiffs, we also marked–up the

recording fees and we charged more than the legal rate for title insurance, but we did

close the loans, write the title insurance policy and provide some service, so we can

charge whatever we want to and disclose the charges any way we see fit.” If this is

allowed there will be nothing left of RESPA and TILA disclosure requirements. Any

judicial decision that accepts LFC’s vague statement that it performed obtained or

arranged other services in exchange for the mark-ups would be in effect a judicial veto of

not only RESPA’s disclosure requirements but those of TILA as well.

          LFC’s suggestion that it is charging for “obtaining” or “arranging,” when

considered in light of other services it may have performed and charged for, raises the
1
    The interplay between TILA and RESPA is expanded upon below.


                                                 18
   Case 1:08-cv-01857        Document 30         Filed 02/14/2008      Page 19 of 32



question of duplicative fees. That is, a fee charged purportedly for one service that is

really compensated for by another settlement charge. What did LFC do for the

“settlement or closing fee?” What excuse could LFC possibly have for charging more

than the legal rate for title insurance when commissions are already included in the filed

title insurance rate? These charges are duplicative and unearned. Duplicative fees are

illegal under RESPA Section 8(b). In Schneider v. Citicorp Mortg., Inc., 982 F.Supp. 897

(E.D.N.Y. 1997), the court held that the plaintiffs stated a claim for violation of section

8(b) of RESPA where the complaint alleged that defendant charged plaintiffs an

application fee of $125 that was duplicative of other charges. Schneider, 982 F.Supp. at

901. HUD correctly defines duplicative charges for the same service as unearned fees.

See 24 C.F.R. § 3500.14. The Schneider court also held that defendants’ disclosure of the

premium payment in the HUD-1 settlement statement did not eliminate RESPA liability.

982 F.Supp. at 902.


   IF THE COURT FINDS THE STATUTE IS AMBIGUOUS, THEN IT IS
CONSTRAINED BY ELEVENTH CIRCUIT PRECEDENT TO GIVE CHEVRON
       DEFERENCE TO THE HUD 2001-1 STATEMENT OF POLICY

       If the Court were to determine that the statutory language of Section 8(b) is

ambiguous as to Congress’s intent, then the Court would have to defer to the

interpretation of HUD as reflected in the 2001-1 SOP. The Supreme Court set forth the

analysis a court should conduct to determine whether to give administrative deference to

government agency’s rules and regulations issued pursuant to a statutory mandate in

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

       When statutory language is uncertain or ambiguous, Chevron deference is

appropriate where Congress has provided an express delegation of authority to an agency



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    Case 1:08-cv-01857             Document 30            Filed 02/14/2008          Page 20 of 32



“to make rules carrying the full force of law, and the agency interpretation claiming

deference was promulgated in the exercise of that authority.” United States v. Mead

Corp., 533 U.S. 218 (2001). Enacting RESPA, Congress granted HUD authority to

“prescribe such rules and regulations, to make such interpretations…as may be necessary

to achieve the purposes of this chapter.” 12 U.S.C. § 2617(a).

        In that vein, the Eleventh Circuit engaged in a rigorous Chevron analysis of the

2001-1 SOP in Heimmermann v. First Union Mortgage Corporation, holding that HUD’s

2001-1 SOP should be granted Chevron deference, saying “[w]e conclude, therefore, that

the 2001-1 SOP is within the realm of agency interpretations that carry the force of law

and are due broad deference.” Heimmermann, 305 F.3d at 1261

        The Eleventh Circuit concluded its holding with the admonition “that because the

power to issue interpretations is expressly delegated in RESPA, the 2001-1 SOP carries

the full force of law.” 305 F.3d at 1261. The Heimmerman decision is a binding

precedent upon this Court and thus requires deference to HUD’s 2001-1 SOP. While

Heimmerman dealt with the propriety of yield spread premiums,2 the Court’s reasoning

as to the appropriate deference to be given the 2001-1 SOP is equally applicable to this

case. The Second Circuit case of Cohen v. J.P. Morgan Chase & Co., 2007 WL 2231106,

decided August 6, 2007 is directly on point with the instant case and decidedly in

Plaintiff’ favor. Like this case, Cohen challenged an unearned fee. At her mortgage

closing, Chase presented Cohen with a closing statement that included a charge for a

$225 “post-closing fee” which she paid. In her complaint, Cohen alleged that Chase had

charged her a fee for which “no … work was done.” Cohen v. J.P. Morgan Chase & Co.,


2
  “Yield Spread Premiums” are settlement charges paid to a broker for bringing a lender a loan at an
interest rate that is higher than the lenders’ par rate.


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    Case 1:08-cv-01857              Document 30            Filed 02/14/2008           Page 21 of 32



2007 WL 2231106, at I (2nd Cir. Aug. 6, 2007). Such an allegation was adequate as a

pleading of the claim.

         The Second Circuit described the fee as an “undivided unearned fee” and focused

its interpretive attention on Section 8(b)’s phrase “any portion, split or percentage of any

charge.” The Cohen court determined that the statutory phrase “any portion, split or

percentage of any charge” can be interpreted to include an undivided unearned fee

explaining, “we must consider whether the expansive modifier ‘any’ when paired with

the nouns ‘portion, split or percentage,’ can plausibly be construed to include an

undivided charge. We conclude that it can.” Cohen at *5.

         The Second Circuit proceeded to engage in a rigorous Chevron analysis including

an exhaustive examination of the of RESPA’s statutory history and concluded that

HUD’s 2001-1 SOP interpretation was reasonable and deserving of Chevron deference.

Cohen, at *7.

         Plaintiff, Walker, is not challenging the “reasonableness” of the title insurance

fee, nor does his claim require the Court to determine the reasonable cost of the title

policy provided. Likewise, his claims do not require the Court or the jury to make any

subjective judgment as to what the fees should be. This RESPA claims is based on the

fact the fee charged for title insurance policy exceed the objective legal rate set for the

issuance of the policy. Where a governing body has established the legal rate for a

service, that rate defines, per se, the legal rate that may be charged. Taffet v. Southern

Co., 967 F.2d 1483 (11th Cir. 1992); Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17 (2nd Cir.

1994).3 The Alabama legislature and the Department of Insurance as well as other states


3
  Several district courts have held that there is no RESPA Section 8 violation for allegedly excessive title
insurance rates where those rates complied with the applicable filed rate. Moore v. Radian Group, Inc.,


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    Case 1:08-cv-01857             Document 30            Filed 02/14/2008           Page 22 of 32



have already determined what can be charged for the policy. Plaintiff in this case alleges

a mark-up in violation of Section 8 because the charge paid for the policy exceeds what,

by operation of law, could have been paid for the “services actually performed.” 12

U.S.C. 2607(b). Put another way, by operation of the applicable filed rate, LFC could

have performed no services which could justify the part of the title insurance charge

which exceeded that filed rate. Section 2607(b) prohibits the splitting of fee, “any portion

of which is unearned.” 2001-1 SOP. Because a portion of the fee collected and split

between LFC and its underwriter was unearned, LFC has violated RESPA. To the extent

LFC paid, accepted or split any portion of a charge that exceeds that legal rate, the charge

is necessarily “other than for services actually performed” and, therefore, a violation of

Section 2607(b).

         In Morrisette v. Novastar Home Mortgage, et al., Case No. 1:06-cv-00578-WS-B,

United States District Court for the Southern District of Alabama, a case similar to the

one at bar, this Court adopted arguments similar to those made here by LFC and

dismissed the plaintiffs’ RESPA claims asserted against the title insurance company.

Plaintiff respectfully submits that the Morrisette case was wrongly decided. The

Morrisette court held that the complaint alleged an “overcharge,” something the court

held was not actionable, but did not allege a “mark-up” which is a RESPA violation. The

court went on to declare that a mark-up “occurs only when someone who has performed

no services tacks on a surcharge to the charge of someone who did provide services.”

Morrisette, slip op., p. 6. These conclusions are wrong for a number of reasons.



233 F. Supp. 2d 819 (E.D. Texas 2002); Steven v. Union Planters Corp., 2000 WL 33128256 (E.D. Pa.
2000); Morales v. Attorneys’ Title Ins. Fund, Inc., 983 F.Supp. 1418 (S.D. Fla. 1997). The facts of this
case present the “flip side of that coin”: title insurance premiums charged in excess of the filed rate.



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   Case 1:08-cv-01857         Document 30         Filed 02/14/2008       Page 23 of 32



       First, as explained herein, HUD does not distinguish between an “overcharge”

and a “mark-up” and the distinction is a false one, at least as applied to the claims in this

case. The notion that RESPA does not prohibit an “overcharge” is derived from opinions,

such as Kruse and Santiago, which were issued cases in which the plaintiffs were

attacking the subjective reasonableness of the fee. Unlike these so-called “overcharge”

cases, the Complaint in the case at bar does not claim an excessive fee as compared to the

provider’s internal costs. The cost of the title insurance to the borrower was set and

defined by state law. What it cost LFC or it agent to issue the policy is not relevant. The

precise value of the policy was defined in the same way the courier fee was defined in

Sosa. Thus, the Plaintiffs’ Complaint does allege that “[LFC] . . . took [the title insurer’s]

fee and added a little extra without doing anything.” Morrisette, slip op. at 6. See

Compl, ¶ 14. The Complaint further alleges LFC split the “little extra” with title

insurance company. Id.

       Emphasis on the “overcharge” language found in Kruse and Santiago incorrectly

takes the focus away from the plain language of Section 2607(b), which should be the

lodestar of the any analysis of Plaintiffs’ claims. That provision prohibits unearned fees:

the charging of a fee “other than for services actually performed.” Nowhere does that

provision use the terms “overcharge” or “mark-up.” Plaintiff has alleged that LFC

collected a prohibited unearned fee when it split with its underwriter amounts which

exceeded the legal rate for those services. Regardless of the significance, if any, of the

term “overcharge” as it pertains to the claims in Kruse and Santiago, Plaintiffs’ claims in

this case are premised on the precise language and plain meaning of Section 2607(b).




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   Case 1:08-cv-01857          Document 30      Filed 02/14/2008      Page 24 of 32



Plaintiff is entitled to explore the true nature of the charge through discovery, and to

prove the allegations of her Complaint.

        Another flaw in the Morrisette decision is that it can not be reconciled with the

HUD 2001 Policy Statement which, in this Circuit, must be given the “full force of the

law.”   Heimmermann, 305 F.3d at 1261. The Morrisette court correctly recognized the

2001 Policy Statement as “contrary” to the position advanced by the defendant but

nevertheless adopted that position. Morrisette, slip op. at 3. As stated above, the 2001

Policy Statement states that a service provider violates Section 2607(b) when it splits a

fee “any portion of which unearned” or imposes a charges a fee were “no, nominal or

duplicative work is done. . ..” 2001 Policy Statement (emphasis provided). This is much

more expansive interpretation of the practices prohibited by Section 2607(b) and directly

conflicts with the court’s statement that a mark-up “occurs only when someone who has

performed no services tacks on a surcharge to the charge of someone who did provide

services.” Morrisette, slip op., p. 6.

        Because Plaintiffs’ claims in this case are premised on the language of Section

2607(b) and the binding regulatory interpretations of HUD, the motion to dismiss should

be denied. Finally, HUD’s considerable expertise regarding residential mortgage

settlements bolsters the conclusion that HUD’s interpretation and the 2001-1 SOP are

entitled to deference.

   RESPA CLAIMS REGARDING TITLE INSURANCE MARK-UP ARE NOT
    BARRED BY THE FILED-RATE DOCTRINE OR BY THE ALABAMA
                       INSURANCE CODE

        Finally LFC argues that the Plaintiffs’ claims are barred by the “filed-rate”

doctrine or the Alabama Insurance Code. LFC claims that the filed-rate doctrine prohibits




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   Case 1:08-cv-01857         Document 30        Filed 02/14/2008        Page 25 of 32



the enforcement of RESPA rights because such enforcement is inconsistent with a state

rate-setting regulatory scheme. Specifically, LFC argues that, by operation of the filed-

rate doctrine, the RESPA claims are barred by the Alabama Insurance Code’s bar on

private suits to enforce its provisions.    Ala. Code      27-25-9(b).    LFC claims this

prohibition on private enforcement prevents Plaintiff from suing under RESPA for mark-

ups of the charges relating to title insurance premiums. By operation of the filed-rate

doctrine and this state law, says LFC, Plaintiff is prohibited from bringing a claim under

RESPA, but must instead resort to administrative complaint filed with the Alabama

Insurance Department.

       This argument is based on several flawed premises. Not the least of these is the

notion that federal rights and protections, such as those granted to consumers under

RESPA, can be preempted by operation of a state statute so that the ability to enforce

such federal right depends on the statutory framework of the state in which a plaintiff

resides. This flies in the face of the basic principles of our federal system, including the

Supremacy Clause of the United States Constitution, as well as clear on-point precedent

in this circuit. This is discussed at length below. Further, the filed-rate doctrine simply

does not apply in this case because Plaintiff is not challenging that rate as unreasonable

or otherwise improper. Had LFC actually charged the filed-rate, then the filed-rate

doctrine might have some application to a claim that the rate was marked-up. However,

LFC’s charge exceeded the filed rate and Plaintiff alleges that this constitutes an illegal

mark-up under RESPA. Plaintiff has no issue with the filed rate itself. This is also

discussed at length below.




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   Case 1:08-cv-01857         Document 30           Filed 02/14/2008     Page 26 of 32



       In its attempt to apply the filed-rate doctrine, LFC pretends that Plaintiff is

somehow challenging the rate that LFC was required to charge for its product. That is

simply not the case. Nowhere in the Complaint do Plaintiffs allege that the rate approved

and filed with the Alabama Department of Insurance, is unreasonable or otherwise

inappropriate. Plaintiff has no problem with the rate that LFC is required to charge by

Alabama’s Insurance Code. Plaintiff alleges that the amount of the charge which LFC

represented as a title insurance premium exceeded the filed rate. Plaintiff alleges that the

title insurance charge is marked-up in violation of § 2607(b) because that charge

exceeded the true cost of the service provided (title insurance).

       This is an action (as against LFC) brought solely under RESPA Section 2707(b)

which prohibits the charging for a settlement service “other than for services actually

performed.” The key issue is whether the amount charged to the Plaintiff exceed the cost

of the service performed, i.e., the issuance of a title insurance policy. Schneider v.

Citicorp Mortgage, Inc., 982 F.Supp. 897, 901 (E.D. N.Y. 1997). As is plain from the

allegations in the Complaint, the role of the approved filed rate for LFC’s policy

establishes the true cost of the title insurance policy for which the Plaintiff was charged.

Plaintiff alleges that she was charged a fee in excess of the regulatorily established cost

of the insurance coverage. Plaintiff alleges that the cost of the policy is set as a function

of the Insurance Code. The filed rate is evidence of the true cost of the coverage.

Because the amount charged as an insurance premium exceeded rate submitted to and

approved by the DOI, that amount charged exceeded the cost of the policy. Because the

RESPA claim is not challenging the filed rate as unreasonable or otherwise improper, the

filed rate doctrine has no application here.




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   Case 1:08-cv-01857          Document 30          Filed 02/14/2008   Page 27 of 32



        Even if Plaintiffs’ claims depend entirely on the filed and approved rate as

evidence of the true cost of the title insurance policy, the filed-rate doctrine would have

no place here. See Robinson v. Fountainhead Title Group Corp., 447 F.Supp.2d 478

(D.Md 2006) (rejecting filed rate doctrine defense to RESPA claim where there was no

challenge to the approved rate but rather a claim that the approved rate should have been

charged). The Eleventh Circuit clarified that the filed-rate doctrine applies to “bar

recovery by those who claim injury by virtue of having paid a filed rate.” Taffet v.

Southern Company, 967 F.2d 1483, 1488 (11th Cir. 1992), citing Keogh v. Chicago &

Northwestern Ry., 260 U.S. 156 (1922). In fact, the central question in the Taffet case

(which is relied upon heavily by LFC) is whether the plaintiffs had a “legal right to have

been charged a lower rate than they actually were charged.” 967 F.2d at 1488. The court

held that because they were charge the filed rate, they had no right to claim they should

have been charged a lower one. Id.; see also Hill v. Bellsouth Telecommunications, Inc.,

364 F.3d 1308, 1315 (“causes of action in which the plaintiff attempts to challenge the

terms of a filed tariff are barred by the filed rate doctrine.”)

        LFC cites the case of Morales v. Attorneys’ Title Ins. Fund, 983 F. Supp. 1418,

1426 (S.D. Fla. 1997), as support for their filed rate argument. However, in Morales, the

plaintiffs claimed that the title insurer was violating RESPA by splitting fees with its

agent, even though it complied with Florida’s filed rate statute. Id., at 1424. “In a

nutshell, the common theory running through the plaintiffs’ cases is that, despite

ostensive compliance with Florida’s applicable laws and regulations, the defendants

have violate RESPA.” Id.        (Emphasis added).The court found that because the fee




                                               27
   Case 1:08-cv-01857          Document 30          Filed 02/14/2008      Page 28 of 32



charged and the commissions paid to the agent were expressly authorized by Florida’s

statute, the filed rate doctrine barred the plaintiffs’ challenge.

        The case at bar is completely different. Here, Plaintiff is not challenging the rates

set by the Alabama Department of Insurance. Plaintiff alleges that the charge she paid,

represented on plaintiffs HUD-1 as a title insurance premium, exceeded those rates. Had

LFC actually charged the rates approved by the Alabama Department of Insurance, the

Plaintiff would be in a completely different position.           The filed rate is not being

challenged here. Rather, the filed rate is accepted by Plaintiff as the measure of the true

cost of the services provided. That cost, to the plaintiff, is defined by the Alabama

Department of Insurance and, as alleged by her is evidence that the charging of a fee in

excess of that rate is a mark-up prohibited by RESPA Section 2607(b).

        The situation presented in case at bar is most similar to the one addressed in

Robinson v. Fountainhead Title Group Corp., 447 F.Supp.2d 478 (D.Md. 2006). In that

case Plaintiff alleged that a RESPA Section 2607 violation occurred because, although

the rate charged was consistent with the filed rate, the wrong filed rate was charged.

Plaintiff argued that the defendants created a sham company so that they could charge a

different and higher rate than the filed rate of the actual insurer. The court rejected the

filed rate defense because there was no challenge of the rate approved under state law.

    . . . New Defendants maintain that Plaintiff does not have standing to pursue her
    claim because she has not alleged an overcharge and is merely challenging the
    reasonableness of a filed rate. Plaintiff asserts that she has alleged an overcharge.
    Plaintiff reasons that her title insurance premium payment of $669.00 to
    Assurance, although consistent with the rate Assurance filed with the Maryland
    Insurance Administration, was nonetheless greater than the title insurance
    premium Fountainhead could have charged under its filed rates. (Citations to the
    record omitted). Plaintiff also argues that the $50.00 fee she paid for Title
    Insurance Binder Preparation is not part of a filed rate.




                                               28
   Case 1:08-cv-01857         Document 30         Filed 02/14/2008      Page 29 of 32



   The Court finds that Plaintiff has alleged an overcharge. Unlike Morales, where
   the plaintiffs alleged that as a result of illegal kickbacks they were overcharged
   for title insurance, in the present case, Plaintiff is not challenging Assurance’s fee
   in and of itself, but in comparison to Fountainhead’s fee. The question is not
   whether Assurance’s fee is reasonable, but whether Plaintiff should have instead
   paid the filed rate of Fountainhead. In addition, Plaintiffs’ allegations concerning
   the binder fee are undoubtedly not covered by the filed rate doctrine and
   constitute an overcharge claim.

Id. at 487-488.

       Although the facts are different, the same distinction drawn by the Robinson court

is appropriate here. As in Robinson, there is no challenge to the reasonableness of the

filed rate. Instead, Plaintiff challenges the rate that was actually imposed. Under these

circumstances, the filed rate doctrine has no application and does not bar Walker’s

RESPA claim.

                       THE RESPA AND TILA CONNECTION

       Why do HUD and RESPA require that all settlement charges be itemized? In

RESPA covered transactions TILA allows the substitution of the HUD-1 settlement

statement for the “itemization of the amount financed” required by 15 U.S.C. § 1638(a).

(See 12 C.F.R. § 226.18 footnotes 40 and 41.) When a lender, such as Ameriquest,

requires the use of a settlement agent, such as LFC, charges made by LFC for its work,

the “settlement fee,” are Finance Charges under TILA. See 12 CFR §§ 226.4(a)(1)(i) and

226.4(a)(2)(i). This is significant as explained below.

       TILA, 15 U.S.C. § 1601 et, seq., was enacted to “assure a meaningful disclosure

of credit terms so that the consumer will be able to compare more readily the various

credit terms available to him and avoid the uninformed use of credit.” It also standardizes

the manner in which costs associated with covered loans are calculated and disclosed.

TILA defines a” finance charge” in general as “the sum of all charges, payable directly or



                                             29
   Case 1:08-cv-01857         Document 30         Filed 02/14/2008       Page 30 of 32



indirectly by the person to whom the credit is extended, and imposed directly or

indirectly by the creditor as an incident to the extension of credit.” 15 U.S.C. § 1605(a).

The statute, Regulation Z and commentary expand on this definition and enumerate

exceptions to the general rule. For example, in the case of a consumer mortgage

transaction, such as we have here, if the creditor requires the use of a settlement agent,

like LFC, the settlement agent’s fee is included in the finance charge and therefore must

be incorporated in the calculation of the applicable Annual Percentage Rate (APR). See

Reg. Z § 226.4(a)(i). Other “real estate related fees” such as fees for title examination,

abstract of title, title insurance, notary and credit report fees are excluded from the

finance charge only if they are “bona fide and reasonable.” Reg. Z § 226.4(c)(7).

Recording fees, likewise, are excluded from the finance charge calculation only if they

“actually are or will be paid to public officials.” Reg. Z § 226.4(e)(1). This is clearly why

LFC’s entire fee must be disclosed in one place i.e. line 1101 of the HUD-1 statement.

Undoubtedly this is also the reason HUD requires that the actual cost of the recording fee,

notary fee, abstractor’s fee and title examination fee be placed on the appropriate lines on

the settlement statement. When LFC adds additional amounts to these otherwise

excludable fees they are no longer “bona fide and reasonable.” This causes the APR to be

understated and the TILA disclosures become meaningless because LFC has concealed

fees that it retains (finance charges) in the excludable title charges. We would expect

discovery to show that LFC gives a low ball price for “Settlement or closing” fees to

lenders with the expectation that it can pad the title charges to make up the difference.

The lenders go along with this because helps them hold down the APR and look more

competitive because some of the Finance Charge is hidden in the title fees.




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   Case 1:08-cv-01857         Document 30         Filed 02/14/2008      Page 31 of 32



                                     CONCLUSION

       Finally, Plaintiffs’ averments that LFC was fully compensated by its settlement

fee and that it performed no service in return for the disputed portions of the other fees

must be accepted as true on a motion to dismiss and the motion to dismiss Count One

should be denied.

                                              /s/ Earl P. Underwood, Jr.
                                              EARL P. UNDERWOOD, JR.
                                              (UNDEE6591)
                                              Attorney for Plaintiffs
                                              Post Office Box 969
                                              Fairhope, Alabama 36533
                                              Telephone:     (251) 990-5558
                                              Facsimile:     (251) 990-0626
                                              E-Mail:        epunderwood@alalaw.com



                                  CERTIFICATE OF SERVICE

        I hereby certify that on February 14, 2008, I electronically filed the foregoing
with the Clerk of the Court using the CM/ECF system which will send notification of
such filing to the following:

Stephen J. Bumgarner
Burr & Forman LLP
3400 Wachovia Tower
420 North 20th St.
Birmingham AL 35203

Gregory C. Cook
Jennifer Blair Hoover
Balch & Bingham
1710 6th Ave N
P.O. Box 306
Birmingham AL 35201-0306

C. Lee Reeves
Sirote & Permutt, P. C.
P.O. Box 55727
Birmingham AL 35255-5727




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   Case 1:08-cv-01857        Document 30      Filed 02/14/2008      Page 32 of 32



Knox McLaney
McLaney & Associates, P.C.
509 S. Court St.
Montgomery AL 36104

Kenneth J. Riemer
Kenneth J. Riemer, Attorney at Law
P.O. Box 1206
166 Government St.
Mobile AL 36633

                                           /s/ Earl P. Underwood, Jr.
                                           Earl P. Underwood, Jr.




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                  IN THE UNITED STATES DISTRICT COURT FOR THE
                         SOUTHERN DISTRICT OF ALABAMA
                               SOUTHERN DIVISION

JONATHAN and SHARRON EDWARDS,                    )
                                                 )
        Plaintiffs,                              )
                                                 )
vs.                                              )    CIVIL ACTION NO. 07-0160-KD-C
                                                 )
ACCREDITED HOME LENDERS, INC.,                   )
LENDER’S FIRST CHOICE;                           )
LENDER’S FIRST CHOICE AGENCY                     )
OF ALABAMA, INC., and UNITED                     )
GENERAL TITLE INSURANCE                          )
COMPANY,                                         )
                                                 )
        Defendants.                              )

                                       REVISED ORDER1

        This matter is before the court on defendant Lender’s First Choice Agency of Alabama,2

Inc.’s motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and

brief in support (doc. 13),3 plaintiffs’ response and exhibits (docs. 25, 26), and defendant’s reply

(docs. 33, 34); and United General Title Insurance Company’s motion to dismiss pursuant to

Rule 12(b)(6) of the Federal Rules of Civil Procedure and memorandum in support (docs. 35,



        1
       This order replaces the order dated October 16, 2007 (Doc. 59). The clerk is directed
to WITHDRAW document 59.
        2
          Lender’s First Choice Agency of Alabama argues that Lender’s First Choice, Inc., is an
inactive Florida corporation not involved in the transaction at issue. Plaintiffs respond that
without discovery they cannot respond to this allegation. However, for purposes of this motion
to dismiss Lender’s as used in this order shall refer to both entities.
        3
          Plaintiffs moved the court for oral argument on Lender’s motion to dismiss. (Doc. 46).
Local Rule 7.3 gives the court discretion to rule on any motion without oral argument. Upon
review of the pleadings and exhibits, the court finds that oral argument would not substantially
assist the court in resolving the issues presented in the motion to dismiss. Accordingly, the
request for oral argument (doc. 46) is denied.
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36), United’s notice of additional authority (doc. 49), plaintiffs’ response in opposition (doc.

50),4 United’s reply (doc. 54), plaintiffs’ notice of filing additional authority (doc. 55), and

United’s response to the notice (doc. 56). Upon consideration of the pleadings and for the

reasons set forth herein, defendant Lender’s’ motion to dismiss (doc. 13) is GRANTED in part

and United’s motion to dismiss (doc. 35) is GRANTED.



       I.      Background

       On or about June 16, 2006, plaintiffs’ real estate transaction was closed and they obtained

a residential real estate mortgage and loan from Accredited Home Lenders, Inc., doing business

as Home Funds Direct. Lender’s acted as the closing agent. United provided title insurance in

connection with the loan. Plaintiffs allege that Lender’s acted as agent for Accredited Home and

United in regard to the closing.

       At the closing, plaintiffs paid $275 as a premium for title insurance which was collected

by Lender’s and shown on the HUD Settlement Statement. In their amended complaint,

plaintiffs allege that the premium should not have exceeded $155, the rate set by the Alabama

Department of Insurance. Plaintiffs allege that the amount in excess of $155 was a charge other

than for services actually performed.

       Also at the closing, plaintiffs paid a recording fee of $88 which was disclosed on the

HUD Settlement Statement as a charge by Lender’s. However, plaintiffd allege that the actual


       4
         In their response, plaintiffs requested oral argument on United’s motion to dismiss.
(Doc. 50). Local Rule 7.3 gives the court discretion to rule on any motion without oral
argument. Upon review of the pleadings and exhibits, the court finds that oral argument would
not substantially assist the court in resolving the issues presented in the motion to dismiss.
Accordingly, the request for oral argument is denied.

                                                  2
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recording fee was $53. Plaintiffs’ further allege that the $88 recording fee was an illegal,

marked-up recording fee in excess of the actual amount and services actually performed.

        Plaintiffs bring Count II against Lender’s alleging that Lender’s violated § 2607(b) of the

Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq and related federal

regulations, by giving or accepting a portion or split of charges made or received for a real estate

settlement service, i.e., the $275 charge for title insurance and the $88 charge for recording fee,

other than for services actually performed. Plaintiffs bring Count III against United alleging that

United violated § 2607(b) by giving or accepting a portion, split or percentage of the $275

charge for title insurance, other than for services actually performed. Plaintiffs also bring Count

IV against Lender’s and United on behalf of a class of similarly situated borrowers for violations

of RESPA. (Doc. 9) Lender’s now moves to dismiss Counts II and V pursuant to Rule 12(b)(6)

of the Federal Rules of Civil Procedure because plaintiffs fail to state a claim under RESPA.

United now moves to dismiss Counts III and IV on similar bases, also arguing that the plaintiffs

failed to state a claim under RESPA.



        II.     Standard of review

        Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a defendant may move

to dismiss a complaint because the plaintiff has failed to state a claim upon which relief may be

granted. See FED. R. CIV. P. 12(b)(6). A Rule 12(b)(6) motion questions the legal sufficiency of

a complaint; therefore, in assessing the merits of a Rule 12(b)(6) motion, the court must assume

that all the factual allegations set forth in the complaint are true. See, e.g., United States v.

Gaubert, 499 U.S. 315, 327 (1991); Powell v. Lennon, 914 F.2d 1459, 1463 (11th Cir.1990).


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Also, all factual allegations are to be construed in the light most favorable to the plaintiff. See,

e.g., Brower v. County of Inyo, 489 U.S. 593, 598 (1989). Rule 8(a)(2) of the Federal Rules of

Civil Procedure generally sets the benchmark for determining whether the allegations in a

complaint are sufficient to survive a Rule 12(b)(6) motion. Moreover, “[w]hile a complaint

attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a

plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than

labels and conclusions, and formulaic recitation of the elements of a cause of action will not do.”

Bell Atlantic Corp. v. Twombly, — U.S. —, 127 S. Ct. 1955, 1964-65 (2007) (citations omitted).

Rather, “stating such a claim requires a complaint with enough factual matter (taken as true) to

suggest” the required element. Id. at 1965. “The Court has instructed us that the rule . . .

‘simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence

of’ the necessary element.” Watts v. Fla. Nat’l Univ., No. 05-13852, 2007 U.S. App. WL

2331029, at *5 (11th Cir., Aug. 17, 2007) (quoting Bell Atlantic Corp. v. Twombly, 127 S. Ct. at

1965). “It is sufficient if the complaint succeeds in ‘identifying facts that are suggestive enough

to render [the element] plausible.’” Id.



       III.    Analysis

               A.      RESPA

       Plaintiffs allege that defendants have violated § 2607(b) of RESPA. The section

captioned “Splitting Charges”, provides that

       No person shall give and no person shall accept any portion, split, or percentage
       of any charge made or received for the rendering of a real estate settlement
       service in connection with a transaction involving a federally related mortgage
       loan other than for services actually performed.

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12 U.S.C. § 2607(b). The operative language “other than for services actually performed”

explains that if a service is actually performed and a fee is given or accepted, § 2607(b) is not

violated. See Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 979, 984 (11th Cir. 2003)

(affirming a Rule 12(b)(6) dismissal for a claim under § 2607(b) because the plaintiff failed to

allege that the defendant did not perform any services and thus accepted a portion of a real estate

settlement charge “other than for services actually performed”). Moreover, “Section 8(b)

addresses the practice of being paid at all for doing nothing, not the practice of being paid too

much for doing something.” Morrisette v. Novastar Home Mortgage, Inc., 484 F. Supp 2d 1227,

1230 (S. D. Ala., 2007) (italics in original).

       The language of § 2607(b) precludes its interpretation as a price-control statute; thus no

violation of RESPA would exist regardless of whether the fee or charge paid by the borrower

exceeds the fee or charge actually incurred so long as a service is performed. Id. at *3; see Kruse

v. Wells Fargo Home Mortgage, Inc., 383 F. 3d 49, 57 (2nd Cir. 2004) (holding that “nothing in

[§ 2607(b)] authorizes courts to divide a ‘charge’ into what they or some other person or entity

deems to be its ‘reasonable’ and ‘unreasonable’ components. Whatever its size, such a fee is

‘for’ the services rendered by the institution and received by the borrower.”); Boulware v.

Crossland Mortgage Corp., 291 F. 3d 261, 268 (4th Cir. 2002) (“RESPA was meant to address

certain practices, not enact broad price controls.”); Krzalic v. Republic Title Co., 314 F. 3d 875,

880-881 (7th Cir. 2002) cert. denied, 539 U.S. 958, 123 S.Ct. 2641 (2003) (“[RESPA] is not a

price-control statute”); Haug v. Bank of America, N.A., 317 F. 3d 832, 836 (8th Cir. 2003) (“[A]n

overcharge, standing alone, does not violate Section 2607(b)”). In sum, the statute prohibits

kickbacks and illegal mark-ups. See Haug, 317 F. 3d at 836 (“Section 8(b) is an anti-kickback


                                                 5
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provision.”); Weizeorick v. ABN AMRO Mortgage Group, Inc., 337 F. 3d 827, 830 (7th Cir.

2003) (recognizing § 8(b) as “an anti-kickback measure.”); Santiago v. GMAC Mortgage Group,

Inc., 417 F. 3d 384, 390 (3rd Cir. 2005) (concluding that the “text of Section 8(b) of RESPA does

not support a cause of action for overcharges by settlement service providers” but finding that

the section “clearly allows for a cause of action for markups”).



       B.      The Complaint

       The court must accept as true all well-pleaded facts in the complaint and all reasonable

inferences therefrom. See, e.g., Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (11th Cir.

2006) (“At the motion to dismiss stage, all well-pleaded facts are accepted as true, and the

reasonable inferences therefrom are construed in the light most favorable to the plaintiff.”). The

amended complaint contains the following factual allegations:

              13. [Lender’s] acted as the closing agent for the Plaintiff’s loan and at all
       relevant times acted as agent for Accredited.

               14. Defendant United issued the title insurance policy underwritten in
       connection with the Plaintiffs’ loan. At all relevant times, [Lender’s] acted as
       agent for United with respect to the issuance of that policy, as well as the
       calculation, imposition and collection of the charge reflected on Line 1108 of
       Plaintiffs’ HUD Settlement Statement.

               15. Plaintiffs were charged $275.00 for the cost of the title insurance
       policy issued by United through its agent [Lender’s]. This charge is reflected on
       Line 1108 of the Plaintiffs’ HUD Settlement Statement.

               16. The legal rate, as determined by Alabama state law, for that policy was
       $155.

               17. Plaintiffs were also charged $88 for “recording fees.” This charge is
       reflected on Line 1201 of the HUD Settlement Statement. The actual cost for
       recording the mortgage was $53.


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(Doc. 9, ¶ 13-17).

       22. The $275 charge imposed on Plaintiffs for title insurance premium was not
       bona fide or reasonable because that amount exceeds the amount allowed by the
       Alabama Department of Insurance (DOI) by at least $120 and therefore exceeds
       the value of the insurance provided. Pursuant to the rate filed and approved by
       the DOI the charge was, by operation of law, illegal, marked-up, non-bona fide
       and was, therefore, a fee incident to the extension of credit and an unearned
       payment for other than services performed. Also, upon information [and] belief,
       the $275 charge exceeded the charge which could have been collected as a title
       insurance premium pursuant to the agreement between [Lender’s] and the
       insurance company for who it served as agent. [Lender’s] was compensated for
       the tasks it actually performed in connection with the issuance of the title
       insurance policy through other fees imposed upon the Plaintiffs, including but not
       limited to the closing fee ($450), “abstract” fee ($175) and the commission
       [Lender’s] received as title insurance agent. Therefore, the Line 1108 charge, or
       at least a portion thereof, constituted a charge other than a fee for services
       actually performed within the meaning of 12 U.S.C. § 2607(b).

       24. Upon information and belief, [Lender’s’] practice is to charge $275 as a “title
       insurance premium” without regard to the amount of the coverage, the amount of
       the loan or the actual cost of the policy. As a result, [Lender’s] engages in a
       pattern and practice of charging fees, ostensibly for “title insurance,” which are in
       excess of the actual amount of the insurance and services actually performed.

       25. Upon information and belief, [Lender’s] practice is also to charge a flat rate
       for “recording fee” without regard to the actual cost associated with recording the
       mortgage instrument. As a result, [Lender’s] engages in a pattern and practice of
       charging fees, ostensibly for “recording fee,” which are in excess of the actual
       amount of the [recording fee] and services actually performed.

(Doc. 9, ¶ 22; ¶ 24-25).

       Plaintiffs also refer to the title insurance charge as “marked up” and exceeding “the

value of the services actually provided or performed” and allege that the “fact that those charges

were marked up, illegal, excessive and otherwise improper, was unknown to, and unknowable

by, Plaintiffs and members of the class.” (Doc. 9, ¶ 26). Plaintiffs also allege defendants

concealed “the fact that the charges imposed on Plaintiffs for . . . ‘title insurance’ and ‘recording

fees’ were marked up”... and that defendants concealed “the fact that borrowers were being

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charged illegal marked-up premiums.” (Doc. 9, ¶ 29).

       In Count II, plaintiffs allege that Lender’s fees for title insurance and the recording fee

were paid by plaintiffs in connection with their loan and were “imposed in connection with the

providing of a real estate settlement service”. (Doc. 9, ¶ 40). Plaintiffs allege that Lender’s

charge for title insurance exceeded the rate allowed by the Alabama Department of Insurance

and the amount agreed upon between Lender’s and United, and that the excess amount

“constituted a charge other than a fee for services actually performed within the meaning” of §

2607(b) and was illegal. (Doc. 9, ¶ 41). Plaintiffs allege that the excess amount above the

recording fee actually paid to the Probate Court, “constituted a charge other than a fee for

services actually performed” and was illegal. (Doc. 9, ¶ 42).

       In Count III, plaintiffs allege that the title insurance fee paid to Lender’s and United for

providing title insurance, was paid in connection with their loan and “was a charge imposed in

connection with the providing of a real estate settlement service . . . .” (Doc. 9, ¶ 48). As with

Lender’s, plaintiffs allege that the amount of the fee in excess of the amount allowed by the

Alabama Department of Insurance or as agreed between United and Lender’s, “constituted a

charge other than a fee for services actually performed within the meaning of 12 U.S.C. §

2607(b)” and was illegal. (Doc. 9, ¶ 49). They also allege that United violated RESPA by giving

or accepting a portion of the excess amount because it was “made or received for a real estate

settlement service other than for services actually rendered.” (Doc. 9, ¶ 50, 51).



       C.      Title Insurance claim against Lender’s and United

       United argues that by issuing a title insurance policy albeit for a charge in excess of the


                                                  8
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filed rate, it provided a service and RESPA does not provide a remedy for overcharges for

services actually performed. United also argues that the claim should be dismissed as

unexhausted because plaintiffs failed to request a hearing before the Alabama Commissioner of

Insurance to address the dispute regarding the title insurance fee.5

       In a similar manner, Lender’s argues that the claims are due to be dismissed because the

plaintiffs failed to allege that Lender’s performed no services for the charges received, but to the

contrary allege that services were performed. Lender’s also argues that because RESPA § 8(b) is

not a price control statute, the plaintiffs’ counts alleging that it charged more than the filed rate

for title insurance, i.e., overcharged, does not state a cause of action and should be dismissed.6

       Plaintiffs respond that their factual allegations state a claim that Lender’s violated

RESPA’s prohibition against illegal mark-ups by tacking on additional charges to the true costs

of services actually performed but without performing any additional services for those tacked-

on charges. They allege that Lender’s imposed and accepted a portion, split or percentage of the

unearned, tacked-on fee or charge for title insurance because Lender’s fully compensated itself,



       5
         United also argues in the alternative, that the overly-broad class definition should be
stricken to the extent that there are claims asserted which accrued prior to April 5, 2006 because
the applicable statute of limitations period under RESPA is one year. Because the motion is
decided on another issue, the court need not address this argument.
       6
          Lender’s also raises the “filed rate doctrine” and the “primary jurisdiction doctrine” as
grounds to dismiss plaintiffs’ claim regarding the title insurance charge. Lender’s argues that
because the title insurance rate, i.e., the “filed rate”, was set by a regulatory agency, the Alabama
Insurance Commission, pursuant to Alabama law, and because Alabama law prohibits a private
cause of action, plaintiffs have no claim under RESPA regarding the title insurance fee charged
in excess of the filed rate. Lender’s also argues that “primary jurisdiction” to handle a filed rate
claim is vested with the Alabama Department of Insurance. Thus, Lender’s alleges that
plaintiffs have failed to exhaust their state law administrative remedies, and their suit is
premature.

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including commissions, for the services actually performed in that regard through the charge for

title insurance approved by the Alabama Insurance Commission, the filed rate, and other

itemized charges reflected on the HUD Settlement Statement. They assert that the “fact that a

portion of a fee is attributable to a service provided does not shield a defendant from violating

[RESPA] when another ‘portion’ of the fee is accepted ‘other than for services actually

performed’” and if the “complaint alleges a fee was charged for something ‘other than for

services actually performed’ a cause of action has been stated.” (Doc. 25).

       Plaintiffs also respond that they have sufficiently alleged a cause of action against United

because they plead that United, through its agent Lender’s, took the title insurance premium as

established by the filed rate $155 and added a charge of $120 which does not represent any work

performed, i.e, an illegal mark-up, and thus they have alleged a payment for something other

than services actually performed. Plaintiffs argue that the filed rate doctrine precludes a finding

that the part of the fee in excess of the filed rate, a portion or split of which they allege United

received, could be for services actually provided because the filed rate establishes the per se

legal fee for the services actually provided.7

       Plaintiffs also argue that they are not challenging the reasonableness of the title insurance

fee, thus their claim does not fall under the Alabama Insurance Commission, but instead their

claim is based on the fact that the fee charged exceeded the applicable filed rate, i.e., the



       7
           Plaintiffs argue that because the filed rate is established by the Alabama Department of
Insurance, “[t]he true cost is established, not by some determination by the Court as to what is
reasonable, but as a matter of law by function of the applicable filed-rate.” (Doc. 50, p. 17).
Plaintiffs rely on Taffet v. Southern Co., 967 F. 2d 1483 (11th Cir. 1992) for the premise that
“[w]here a governing body has established the legal rate for a service, that rate defines per se,
the legal rate that may be charged.” (Id.)

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“objective legal rate set for the issuance of the policy” by the Alabama Department of Insurance

and the “true cost of the coverage”, and thus the difference was a fee for something other than

“services actually performed” in violation of RESPA. Additionally, plaintiffs argue that

Lender’s’ right to earn a commission on the title insurance premium does not bar a RESPA claim

because discovery will show that the commission was included in the filed rate.

       A similar circumstance was addressed in Morrisette, 484 F. Supp 2d 1227. In Morrisette,

title insurance was provided by Transnation Title Insurance Company through its agent Swafford

Settlement Services, Inc. and Swafford acted as the closing agent on the mortgage with Novastar.

Plaintiffs claimed a violation of RESPA § 2607(b) because the charge for title insurance

reflected on the HUD Settlement Statement was $221 but the filed rate was $161. Plaintiffs

claimed that the difference was a fee for other than services actually performed within the

meaning of § 2607(b). The District Court granted Transnation’s motion to dismiss based upon a

finding that the charge was an overcharge8 and not a markup and that “whether described as

unreasonable (as a charge above a filed rate presumably would be) or illegal, what the plaintiffs

challenge is the amount of a fee charged by the provider of services that actually provided the

services and that did not split the fee with any person or entity that did not provide services.” Id.

at 1230.

       Plaintiffs argue Morrisette was wrongly decided because it adopted a definition of

prohibited activities which was more restrictive than dictated by the statute and regulations.

Plaintiffs also argue that their case can be distinguished from Morrisette because they have


       8
        “An overcharge. . . aris[es] out of settlement services provided by the lender itself but
charged to consumers seeking home mortgages for substantially more than the provider’s cost.”
Morrisette, 484 F. Supp. at 1229 quoting Kruse, 383 F. 3d at 53 (internal quotations omitted).

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alleged what the court held was missing in Morrisette - that Lender’s took a fee charged by

someone else (United’s premium) and “added a little extra without doing anything.” (Doc. 25).

However, the court is persuaded by the reasoning in Morrisette. United provided title insurance

through Lender’s as its agent and Lender’s acted as closing agent on the mortgage for

Accredited. As in Morrisette, there was an “overcharge” above the filed rate for title insurance.

However, there is no allegation that Lender’s split any portion of the fee with any person or

entity that did not provide services. As noted in Morrisette, the “plaintiff’s beef is not that

Transnation performed no services but that it was paid too much for those service - i.e., that it

overcharged for the policy”. Id. at 1229. In the complaint in the present case, plaintiffs allege

that Lender’s and United accepted a portion, split or percentage of a charge other than for

services actually performed, i.e., the tacked-on fee, but the complaint does not allege that no

services were provided by Lender’s or United. Rather, the complaint alleges that Lender’s

received a fee that violates Alabama law, for such services.

       As discussed in Morrisette, “nothing in the language of [Section 8(b)] authorizes courts

to divide a ‘charge’ into what they or some other person or entity deems to be its ‘reasonable’

and ‘unreasonable’ components. Whatever its size, such a fee is ‘for’ the services rendered by

the institution and received by the borrower.” Morrisette, 383 F. Supp. 2d at 1229 quoting Kruse,

383 F. 3d at 56 and Santiago,417 F. 3d at 387, (Section 8(b) does not allow a court to divide a

fee into a reasonable part, as to which services were rendered, and an unreasonable remainder, as

to which services were not rendered). A markup occurs “‘when the provider outsources the task

of providing the service to a third-party vendor, pays the vendor a fee for the service, and then,

without providing an additional service [to that of the vendor], charges homeowners seeking


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mortgages a higher fee for the settlement service than that which the provider paid to the

third-party vendor.’” Morrisette, 484 F.3d at 1229 quoting Kruse, 383 F.3d at 53; see Sosa, 348

F.3d at 981. In other words, when “someone who has performed no services tacks on a

surcharge to the charge of someone who did provide services” a mark-up exists. Morrisette, 484

F.3d at 1231. However, in this circumstance, plaintiffs allege that both Lender’s and United

have performed a service, i.e., providing title insurance, thus the complaint alleges an overcharge

but not a mark-up. Therefore, taking as true the allegations in the complaint, the court finds that

Lender’s and United’s motions to dismiss as to the title insurance claim are due to be granted.

       Plaintiffs also argue that this court must follow Eleventh Circuit precedent and give full

force of law to the Department of Housing and Urban Developments regulatory interpretations of

§ 2607(b). Plaintiffs argue that the Congressional intent behind enacting § 2607(b) was to

eliminate fees for which no services were performed or no goods were furnished and that

Congress designated HUD as the implementing agency with authority to generate regulations

and interpretations of RESPA. Plaintiffs argue that HUD’s regulations found at 24 C.F.R. §

3500.14(c)9 and the 2001 HUD Statement of Policy, 66 Fed. Reg. 53052 (Oct. 18, 2001)10 which


       9
          “No person shall give and no person shall accept any portion, split, or percentage of
any charge made or received for the rendering of a real estate settlement service in connection
with a transaction involving a federally related mortgage loan other than for services actually
performed. A charge by a person for which no or nominal services are performed or for which
duplicative fees are charged is an unearned fee and violates this section. The source of the
payment does not determine whether or not a service is compensable. Nor may the prohibitions
of this Part be avoided by creating an arrangement wherein the purchaser of services splits the
fee.” 24 C.F.R. § 3500.14(c).
       10
            HUD clarified that violations may occur in at least the following three circumstances:

       (1) Two or more persons split a fee for settlement services, “any portion of which
       is unearned”; or

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states that a violation occurs when a settlement service provider “splits a fee ‘any portion of

which is unearned’ or imposes [or] charges a fee where no work was done or nominal, or

duplicative work was done support their position and are binding on this court. (Doc. 25).

       Plaintiffs rely upon two Eleventh Circuit opinions wherein deference was given to a

different section of the 2001 HUD Statement of Policy. (Docs. 25, 55). In Heimmermann v.

First Union Mortgage Corp., 305 F.3d 1257, 1259 (11th Cir. 2002) cert. denied, 539 U.S. 970,

123 S. Ct. 2641 (2003) and Culpepper v. Irwin Mortgage Corp., 491 F. 3d 1260, 1272 (11th Cir.

2007) (Culpepper IV), the circuit court deferred to and applied the 2001 HUD SOP regarding

yield spread premiums to determine whether the yield spread premiums as plead were illegal

payments under RESPA. In Culpepper IV, the Eleventh Circuit relied upon the decision in

Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782

(1984) (setting forth standards for deferring to a federal regulations) and noted the Supreme

Court’s statement that “where Congress has delegated authority to an agency to elucidate a

provision of a statute, the agency's rules carry the full force of law and are given controlling

weight unless they are arbitrary, capricious, or manifestly contrary to the statute”. 491 F.3d at

1269 n.4.

       Plaintiffs assert that in Culpepper IV, the Eleventh Circuit made a blanket ruling that the



       (2) One settlement service provider marks up the cost of the services performed or
       goods provided by another settlement service provider without providing
       additional actual, necessary and distinct services, goods, or facilities to justify the
       additional charge; or
       (3) One settlement service provider charges a fee where no, nominal or
       duplicative work is done or the fee is in excess of the reasonable value of goods
       or facilities provided or the services actually performed.

66 Fed. Reg. 53052, 53057.

                                                 14
     Case 1:08-cv-01857 Document 30-2     Filed 10/23/2007 Page of 17
    Case 1:07-cv-00160-KD-C Document 61 Filed 02/14/2008 Page 1515 of 17



2001 HUD SOP applies to all RESPA claims and thus should apply in this case. 491 F. 3d at

1272. However, a careful reading of Culpepper IV indicates that the circuit court did not expand

the decision to apply the 2001 HUD SOP to cases other than those involving yield spread

premiums. Instead, the circuit court stated that it had “adopted the 2001 SOP as the law in our

circuit on the question of [Yield Spread Premium] liability under RESPA”. 491 F. 3d at 1269.

Thus, the court did not adopt the 2001 HUD SOP as controlling for all liability under RESPA.

       Moreover, the court is convinced by the reasoning of the Second Circuit in Kruse that

any statement included in the 2001 HUD SOP which allows for a claim for overcharges is not

supported by the text of section 8(b). Kruse, 383 F. 3d at 55-57 (“We conclude that section 8(b)

clearly and unambiguously does not extend to overcharges.”)



       D.      Recording fee claim against Lender’s

       Lender’s argues that because plaintiffs allege that services were actually performed in

connection with a real estate closing, plaintiffs’ claim that Lender’s charged an excessive amount

for the recording fee is not a claim for a mark-up or a kick-back but instead is a claim for an

overcharge which should be dismissed. Lender’s states that plaintiffs cannot separate or

subdivide the recording fee charge into unearned and earned portions by deducting the actual

recording fee paid to Probate Court from the recording fee charged to plaintiffs, and allege that

receipt of the difference was “other than for services actually performed” and thus illegal.

       Lender’s also makes two factual arguments in support of its motion to dismiss. First

Lender’s alleges that it arranged for recording of the mortgage and thus performed a service.

Lender’s further states that settlement agents commonly collect more or less than the actual


                                                15
     Case 1:08-cv-01857 Document 30-2     Filed 10/23/2007 Page of 17
    Case 1:07-cv-00160-KD-C Document 61 Filed 02/14/2008 Page 1616 of 17



recording fee because fees vary and change and although Lender’s kept the overage in escrow, it

refunded the difference as is its normal practice.

       Plaintiffs allege that Lender’s charged an illegal, marked-up recording fee and thus

violated RESPA. In that regard, Lender’s did obtain the service of a third party vendor, i.e. the

Probate Court where the documents were recorded. In some instances, charging more for

recording than the recording fee (a service provided by the Probate Court) would violate

RESPA, e.g. where no additional work was performed by Lender’s. The issue of whether

Lender’s provided additional services in this case is not subject to resolution through a motion to

dismiss. First, there is a factual dispute as to whether more than the recording fee was actually

intended to be retained by Lender’s. Second, there is a factual issue as to whether additional

services were performed by Lender’s. Accordingly, Lender’s motion to dismiss as to the

recording fee is DENIED.11

       IV.     Conclusion

       Taking as true all factual allegations as discussed herein and viewing them in the light

most favorable to plaintiffs, the court finds that plaintiffs have failed to allege that Lender’s and

United performed no services in return for the title insurance fee charged. Thus, Lender’s’ and




       11
           The court recognizes that paragraphs 24 and 25 are practically identical in the
allegations made regarding the title insurance fee and the recording fee. However, the difference
in the outcome on the motion to dismiss is based on the factual allegations in the complaint. The
factual allegations relevant to the title insurance can only be construed as an overcharge
allegation. The factual allegations regarding the recording fee leave open issues of fact as to
whether services were performed by Lender’s. “It is sufficient if the complaint succeeds in
‘identifying facts that are suggestive enough to render [the element] plausible.’” Watts v. Fla.
Nat’l Univ., No. 05-13852, 2007 U.S. App. WL 2331029, at *5 (11th Cir., Aug. 17, 2007)
(quoting Bell Atlantic Corp. v. Twombly, 127 S. Ct. at 1965).

                                                  16
     Case 1:08-cv-01857 Document 30-2     Filed 10/23/2007 Page of 17
    Case 1:07-cv-00160-KD-C Document 61 Filed 02/14/2008 Page 1717 of 17



United’s motions to dismiss as to the title insurance fee is GRANTED.12 Because the

individual claims are due to be dismissed, those claims raised on behalf of a putative class as to

the title insurance fee are also due to be dismissed.

       The court further finds that plaintiffs have sufficiently alleged a claim against Lender’s as

to the recording fee. Therefore, Lender’s motion to dismiss as to the recording fee claim is

DENIED.

       DONE and ORDERED this the 23rd day of October, 2007.



                                              s/ Kristi K. DuBose
                                              KRISTI K. DuBOSE
                                              UNITED STATES DISTRICT JUDGE




       12
         Count II against Lender’s contains both the title insurance and the recording fee claims.
Count III against United contains only the title insurance claim. Count IV contains the class
claims as to Lender’s and United for title insurance claim and as to Lender’s for the recording
fee claim.



                                                 17
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 1 of Page 1 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16




                           IN THE UNITED STATES DISTRICT COURT
                          FOR THE SOUTHERN DISTRICT OF FLORIDA
                                      MIAMI DIVISION

                               Case No. 02-20285-CIV-SEITZ/GARBER

    JACQUELINE SOSA and CAROL HUNTINGTON,
    individually and on behalf of all others similarly situated,

           Plaintiffs,

    v.

    CHASE MANHATTAN MORTGAGE
    CORPORATION, a foreign corporation,

           Defendant.
    _ _ _ _ _ _ _ _ _ _ _ _ _ _---.:1

                            AMENDED COMPLAINT - CLASS ACTION

           Plaintiffs Jacqueline Sosa and Carol Huntington, individually and on behalf of all others

    similarly situated, make the following allegations against Defendant Chase Manhattan Mortgage

    Company ("Defendant") and states as follows:

                                            INTRODUCTION

           1.      This class action arises from Defendant's unlawful scheme to earn secret profits by

    deceiving parties to real estate transactions. Defendant assesses and collects money from parties to

    real estate transactions for purported messenger and courier fees (messenger fees and courier fees are

    collectively referred to herein as "courier fees"). Rather than paying all of such fees to third-party

    couriers -- as one would reasonably expect based on the title under which the money was assessed

    and collected - Defendant keeps a significant portion ofthe money collected as a secondary-income

    stream or secret-profit source.

           2.      Defendant's unfair and deceptive practice violates Section 8(b) of the Real Estate
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 2 of Page 2 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                    Case No. 02-20285-CIV-SEITZ/GARBER

   Settlement Procedures Act.

           3.     Plaintiffs seek for themselves and all others who fell victim to Defendant's scheme,

   damages consisting of, inter alia, the difference between the total amount of courier fees paid by

   class members less the total amount ofmoney actually paid by Defendant to third-parties for courier

   fees.

                                           JURISDICTION AND VENUE

           4.     This Court has jurisdiction over this dispute pursuant to 28 USC §§ 1331 and 1367,

   and 12 USC §2614.

           5.     Venue is proper in this District because the conduct from which this cause of action

   arises occurred here.

                                                            PARTIES

           6.     PlaintiffJacqueline Sosa is a resident ofMiami-Dade County, Florida, is over the age

   of eighteen (18) years, and is otherwise suijuris.

           7.     Plaintiff Carol Huntington is a resident of Miami-Dade County, Florida, is over the

   age of eighteen (18) years, and is otherwise suijuris.

           8.     Defendant Chase Manhattan Mortgage Company is a foreign corporation with its

   principal place of business in Columbus, Ohio.

                                             GENERAL ALLEGATIONS

           9.     On November 7, 2001, Plaintiff Sosa purchased real property located at 15430

   Southwest 77th Avenue, Miami, Florida 33157. The settlement statement for the transaction includes

   charges to PlaintiffSosa for messenger fees that total $162.50, including a fifty-dollar ($50.00) fee

   charged by Defendant. See Settlement Statement attached hereto as Exhibit A at Line 818. Plaintiff


                                                           -2-
                                                   Wites & Kapetan, P.A.
                                1761 W. Hillsboro Blvd., Suite 403, Deerfield Beach, FL 33442
                                        Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 3 of Page 3 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                    Case No. 02-20285-CIV-SEITZ/GARBER


   Sosa paid the messenger fee 1 to Defendant.

           10.     On March 12, 2002, PlaintiffHuntington refinanced real property located at 2150 San

   Souci Boulevard, PHFl, Miami, Florida 33180. The settlement statement for the transaction

   includes a charge to Plaintiff Huntington for a courier fee in the amount of fifty dollars ($50.00)

   charged by Defendant. See Settlement Statement attached hereto as Exhibit B at Line 808. Plaintiff

   Huntington paid the courier fee to Defendant.

           11.     Defendant is a party to contracts with multiple local and national couriers, such as

   Federal Express, Airborne Express, United Parcel Service and others, pursuant to which Defendant

   pays significantly discounted rates for such courier services.

           12.     Defendant paid only a portion ofthe courier fees charged to Plaintiffs to third-parties

   for courier services.

           13.     Defendant retained a portion of the courier fees charged to Plaintiffs.

           14.     Defendant never disclosed to Plaintiffs that Defendant retained any portion of the

   courier fees.

           15.     Defendant intentionally or negligently created the misimpression that the courier fees

  were for charges assessed, collected for and paid to third parties that provide courier services.

  Defendant created such impression to earn secret profits by deceiving Plaintiffs and the Class into

  believing that the courier fees are paid to third parties.

           16.     Defendant's unfair and deceptive collection ofcourier fees deprived Plaintiffs and the

  Class of the ability to negotiate fees that they reasonably believed were paid to third parties.

           17.     Defendant's practice of overcharging parties to real estate transactions for services


        1       As set forth in paragraph one above, Plaintiffs will refer to "courier fees" and
  "messenger fees" collectively as "courier fees" in this complaint.
                                                           -3-
                                                   Wites & Kapetan, P.A.
                                1761 W. Hillsboro Blvd.• Suite 403, Deerfield Beach, FL 33442
                                        Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 4 of Page 4 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                    Case No. 02-20285-CIV-SEITZ/GARBER


   provided by third parties violates Section 8(b) of the Real Estate Settlement Procedures Act

   ("RESPA"), 12 USC 2607(b). Section (8b) ofRESPA prohibits the giving or accepting of any

   portion, split, or percentage of any charge other than for goods or facilities provided or services

   performed; it is intended to eliminate unearned fees."                    RESPA Statement of Policy 2001-1:

   Clarification ofStatement ofPolicy 1999-1 Regarding Lender Payments to Mortgage Brokers, and

   Guidance Concerning Unearned Fees Under Section (8b), 24 CFR Part 3500, Docket No. FR-4714-

   N-01. RESPA's prohibition includes cases where "one settlement service provider marks-up the cost

   of the services performed or goods provided by another settlement service provider without

   providing actual, necessary, and distinct services, goods, or facilities to justify the additional charge."

   [d.

           18.     Defendant's conduct in charging parties to real estate transactions fees for courier

   services in excess ofwhat Defendant paid to third parties for such services is part ofan ongoing and

   secret scheme that Defendant failed to disclose to Plaintiffs or any Class Member.

           19.    Defendant's practice as described in this complaint violates RESPA and gives rise to

   claims for unjust enrichment regardless of whether such practice was intentional or the result of

   negligence.

          20.     Neither Plaintiffs nor any Class Member were able to discover Defendant's practice

   as Defendant failed to disclose the practice to any person or entity.




                                                           -4-
                                                   Wites & Kapetan, P.A.
                                1761 W. Hillsboro Blvd.• Suite 403, Deerfield Beach, FL 33442
                                        Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 5 of Page 5 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                   Case No. 02-20285-CIV-SEITZ/GARBER

                                        CLASS ACTION ALLEGATIONS
                                                 THE CLASS

           21.    Plaintiffs bring this action in their own behalf and in a representative capacity on

   behalf of all persons nationwide that paid courier fees to Defendant in excess of the amount that

   Defendant paid to third parties for such courier services during the time period commencing on the

   date Defendant began such practice through the present (the "Class Period"). Plaintiffs seek

   certification ofa nationwide class pursuant to Rule 23(b)(2) and (3), Fed.R.Civ.P.

                                                       NUMEROSITY

           22.    The members ofthe Class are so numerous that joinder ofall members is impractical.

   While the exact number ofClass members is unknown to Plaintiffs at this time, Plaintiffs believe in

   good faith that the Class includes hundreds of thousands, if not millions, of persons nationwide.

                                                        TYPICALITY

           23.    Plaintiffs' claims are typical of absent Class members' claims. Plaintiffs and the

   Class have sustained identical damage, and their claims arise from the same factual background and

   legal theories as set forth in paragraphs 1- 21 above and 23-43 below.

                                     ADEQUACY OF REPRESENTATION

           24.    Plaintiffs will fairly and adequately protect the Class' interests and have retained

   counsel competent and experienced in class-action litigation. Plaintiffs' interests are coincident

   with, and not antagonistic to, absent Class members' interests because by proving their individual

   claims they will necessarily prove Defendant's liability as to the Class' claims. Plaintiffs also are

   cognizant of, and determined to, faithfully discharge their fiduciary duties to the absent class

  members as the Class Representative.




                                                           -5-
                                                  Wites & Kapetan, P.A.
                               1761 W. Hillsboro Blvd., Suite 403, Deerfield Beach, FL 33442
                                       Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 6 of Page 6 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                       Case No. 02-20285-CIV-SEITZIGARBER

                                                           SUPERORITY

            25.       A class action is superior to other available methods for the fair and efficient

   adjudication ofthis controversy. The expense and burden ofindividual litigation effectively makes it

   impossible for individual Class members to seek redress for the wrongs complained of herein.

                                                       MANAGEABILITY

            26.       There are no unusual difficulties likely to be encountered in the management of this

   action as a class suit that could not be managed by this Court. The advantages of maintaining the

   action as a class suit far outweigh the expense and waste of judicial effort that would result in

   hundreds of separate adjudications of these issues for each class member because the basic class

   wide liability issues will be determined at the first stage of a bifurcated proceeding. A simple notice

   and second stage claims process will follow. The second stage will provide Defendant an opportunity

   to challenge such documentation and/or assert any affirmative defense.

            27.       Class treatment further insures uniformity and consistency in results and will provide

   optimum compensation of Class members for their injuries and deterrence of Defendant and other

   similar businesses from engaging in such wrongful acts in the future.

                                     PREDOMINANCE AND COMMONALITY

            28.       The questions of law and fact common to the claims of each Class member

   overwhelmingly predominate over any questions oflaw or fact affecting only individual members of

   the Class. Questions oflaw and fact common to the Class include, but are not necessarily limited to,

   the following: 2


           2       The list of common questions of law and fact is not intended to be exhaustive; by
   setting forth this argument, Plaintiffs do not waive their right to assert additional claims against
   Defendant or raise additional common questions of fact.

                                                              -6-
                                                      Wiles & Kapetan. P.A.
                                   1761 W. Hillsboro Blvd., Suile 403, Deerfield Beach, FL 33442
                                           Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 7 of Page 7 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                   Case No. 02-20285-CIV-SEITZ/GARBER




                  A. Whether Defendant charged courier fees to Plaintiffs and the Class;

                  B. Whether Defendant paid the entire courier fee charged to each Plaintiff
                      and Class Member to a third-party that provided Courier services;

                  C. Whether Defendant retained a portion of the courier fee charged to and
                     collected from each Plaintiff and Class Members;

                  D. Whether Defendant's practice of charging to and collecting from
                     Plaintiffs and Class Members an amount for courier fees in excess ofthe
                     amount paid by Defendant to third-parties for courier services violates
                     Section 8(b) of RESPA;

                  E. Whether Defendant was unjustly enriched by its practice of charging to
                     and collecting from Plaintiffs and Class Members an amount for courier
                     fees in excess ofthe amount paid by Defendant to third-parties for courier
                     services;

                  F. Whether Plaintiffs and Class Members suffered damages; and

                  G. The extent of injuries suffered by Plaintiffs and Class Members.

          29.     Plaintiffs and the Class' claims also arise from a common factual background,

   including, but not necessarily limited to, the following:

                  A. Plaintiffs and the Class are all parties to real estate transactions in which
                     Defendant served as the lender;

                  B. Defendant charged Plaintiffs and the Class a fee for courier services;

                  C. Plaintiffs and the Class all paid a fee to Defendant for courier services; and

                  D. Defendant did not disclose on the HUD-I or in any other document to Plaintiffs
                     or the Class that it would pay only a portion of the fee charged for courier
                     services to a third party and would keep the remainder ofthe fee as a unearned or
                     secret profit.




                                                          -7-
                                                  Wites & Kapetan, P.A.
                               1761 W. Hillsboro Blvd., Suite 403, Deerfield Beach, FL 33442
                                       Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 8 of Page 8 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                     Case No. 02-20285-CIV-SEITZIGARBER

                                             COUNT 1-
                            VIOLATION OF SECTION 8(8) OF THE REAL ESTATE
                              SETTLEMENT PROCEDURES ACT, 12 USC 2607(b)


            30.     Plaintiffs reallege the allegations set forth above in paragraphs 1 through 29 as if set

    forth herein in full.

            31.     "The purpose of [the Real Estate Settlement Procedure Act ("RESPA") is [inter alia]

   to effect changes in the settlement process for residential real estate that will result - (1) in more

   effective advance disclosure to home buyers and sellers of settlement costs; [and] (2) in the

   elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain

   settlement services."

            32.     Section 8(b) ofRESPA prohibits a settlement service provider from marking up the

   charges for services provided by third parties, including, but not limited to, charges for courier and

   courier services.

            33.     On November 7, 2001, Plaintiff Sosa purchased real property located at 15430

   Southwest 77th Avenue, Miami, Florida 33157. The settlement statement for the transaction includes

   charges to Plaintiff Sosa for courier fees that total $162.50, including a fifty-dollar ($50.00) fee

   charged by Defendant. See Settlement Statement attached hereto as Exhibit A at Line 818. Plaintiff

   Sosa paid the courier fee to Defendant.

            34.     On March 12, 2002, PlaintiffHuntington refinanced real property located at 2150 San

   Souci Boulevard, PHFl, Miami, Florida 33180. The settlement statement for the transaction

   includes a charge to Plaintiff Huntington for a courier fee in the amount of fifty dollars ($50.00)

   charged by Defendant. See Settlement Statement attached hereto as Exhibit B at Line 808. Plaintiff

   Huntington paid the courier fee to Defendant.

                                                            -8-
                                                    Wiles & Kapetan, P.A.
                                 1761 W. Hillsboro Blvd., Suile 403, Deerfield Beach, FL 33442
                                         Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 9 of Page 9 of 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 16

                                                                    Case No. 02-20285-CIV-SEITZIGARBER

           35.     Defendant paid only a portion ofthe courier fees charged to Plaintiffs to a third-party

   for courier services.

           36.     Defendant retained a portion of the courier fees charged to Plaintiffs.

           37.     Defendant's conduct violates Section 8(b) ofRESPA.

           38.     Plaintiffs and the Class have suffered damages as result of Defendant's violation of

   Section 8(b) of RESPA.

                                                     COUNT 11-
                                                UNJUST ENRICHMENT

           39.     Plaintiffs reallege the allegations set forth above in paragraphs 1 through 29 as ifset

   forth herein in full.

           40.     Plaintiffs and Class Members conferred a benefit upon Defendant by paying courier

   fees charged by Defendant.

           41.     Defendant voluntarily accepted the benefits conferred by Plaintiffs and Class

   Members.

           42.     Defendant's retention of the benefits conferred by Plaintiffs and Class Members is

   unjust because such benefit was procured through unlawful and deceptive means. Specifically,

   Defendant deceived and tricked Plaintiffs and Class Members by retaining as a secret profit a portion

   of the money charged to and collected from Plaintiffs and Class Members for courier and courier

   fees rather than paying such amount in full to third-parties.

           43.     Defendant should return to Plaintiffs and Class Members the benefits they conferred

   on Defendant.

           WHEREFORE, Plaintiffs demand, individually and on behalfofthe Class, damages against

   Defendant for unjust enriclunent and such other relief this Court deems just and proper.

                                                           -9-
                                                   Wites & Kapetan, P.A.
                                1761 W. Hillsboro Blvd., Suite 403, Deerfield Beach, FL 33442
                                        Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 10 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 of Page 10 of 16

                                                                    Case No. 02-20285-CIV-SEITZ/GARBER


                                     CLASSWIDE PRAYER FOR RELIEF

           WHEREFORE, Plaintiffs, on their own behalf and on behalf of the Class, pray for the

    following relief:

           (a)     an order certifying this action as a class action as set forth herein and designating

    Plaintiffs as the Class Representatives of the Class described above;

           (b)     an order directing Defendant to cease its pattern and practice of charging parties to

    real estate transactions amounts for courier fees in excess of that Defendant pays to third-parties;

           (c)     an order awarding Plaintiffs and the Class damages;

           (d)     an order awarding Plaintiffs and the Class attorneys' fees, costs and expenses incurred

    in this action, including reasonable costs of experts retained by counsel;

           (e)     a preliminary and permanent order providing for injunctive reliefto enjoin Defendant

    from future violations of RESPA; and

           (f)     such other relief this Court deems just and proper.

                                            DEMAND FOR JURY TRIAL

           Plaintiffs demand a trial by jury of all issues so triable.

                                                         Respectfully submitted by:

                                                         WITES & KAPETAN, P.A.
                                                         Attorneys for Plaintiffs and the Class
                                                         1761 West Hillsboro Blvd.
                                                         Suite 403
                                                         Deerfield Beach, FL 33442
                                                         mwites@wklawyers.com
                                                         (954) 570-8989
                                                         (954) 428-3     (fax)


                                                                    M       A. WITES
                                                                    Fla. Bar No.: 24783

                                                           - 10 -
                                                   Wiles & Kapetan, P.A.
                                1761 W. Hillsboro Blvd.• Suile 403, Deerfield Beach, FL 33442
                                        Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 11 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 of Page 11 of 16

                                                                  Case No. 02-20285-CIV-SEITZ/GARBER



                                         CERTIFICATE OF SERVICE

          I hereby certify that the foregoing was served on this 9th day of April, 2002 upon: Robert J.

    Emanuel, BURKE, WARREN, MACKAY & SERRITELLA, P.C., 330 North Wabash Avenue,

    22nd Floor, Chicago, Illinois 60611 and Scott B. Newman, HOLLAND & KNIGHT LLP, P.O. Box

    3208, West Palm Beach, FL 33402-3208.



                                            ---->..,L......U\kl1N$
                                            Marc A. Wites




                                                         - 11 -
                                                 Wites & Kapetan, P.A.
                              1761 W. Hillsboro Blvd., Suite 403, Deerfield Beach, FL 33442
                                      Phone: (954) 570-8989; Fax: (954) 428-3929
          Case 1:08-cv-01857 Document 30:,,,·';55678 Filed 02/14/2008 04/12/2002 of Page 12 of 16
                                         30-3
Case 1:02-cv-20285-PAS Document 13 : Entered on FLSDJan.
                               FA.'< NO.                                 Page 12 16
                                                              Docket 04:34A1 P2
                                                                   2002


                                                                                                                                                                17.. O~ I
            A. SETTLEMENT STATEMENT                                                     U.S. Department of Housing
                                                                                        and Urban Development
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            C. NOTE: This Ionn Is furnished 10 Oillll you I ,t4temenl 01 actual leltlemenl CO,II. ""'ounll paid to 'InC! by the SlIlU....enl agent Ire shown.
                        Itema merl<ed (p.D.C.) were paid outside Ihe clalng; they are shown here lor information purpole. Ind ate not Incklded Inlhe 101als.
            D. Nam. and Addr.n 01 Borrower                     E. Nl\Il'l and Addr••• 01 Siller                    F. "lIme .nd Address or Lander
            AL8ERI'O I:ORm1IHY                                 OO!I...I..oElM) UZ\MIlIN                            OD\SE MZ\NHI\TD\N ~
            ~INE                roRRUIHY                                     E.VE:LYN A. DAMIAN                                                            ~TI(lJ


            15430 SClJIHWEST 77 AVENUE                                       1300 Brickell AV'eI"l1e, # 200                                                4 919 MEM:IUAL HIrnwAY. #308
            MIAMI. FLORIIY\ 33157                                            Miami, Florida 33131                                                          TI'IMPA, FLCIUDA. 33634
            G.. Property location                                                                             H. Salt_t Agent
                                                                                                              1HE TITLE WAVE. IN:'.
            15430 saJrnWEST 77 AVENUE
            MIAMI, FI.JJRII:lI'. 33157                                                                        Place 01 Settlemenl                                                       I. SaUlement
                                                                                                              11420 rmrn I<ENDALL r:R •• #204                                              Oa18
                                                                                                              MIAMI. FI.aUDI\ 33176
                                                                                                                                                                                          1l/0~~~i
                                                                                                                                                                                       Inn·n/07
                 J. SUMMARY OF                 'S TRAN~ACTiON'          K. SUMMARY OF SELLER'S TRANSACTION'
            1""'. Gross Amollnl DIl .. From Borrower                 400 r.rn",-," Amount Due Tn Selll!!r
            101. Contracl ,.\P~ nr""                      427 000.00 101. Con'r'cl .ale. nrico            427 000.00
            lIl? Personol nronM.                                     laO P''''~n.1 nr~n~_
            101 ~;';I chame. 10 borrowQ( lIine 1400         9 'n6 "6 In,.
            11'1.I                                                                                            ~.
           11n~                                                                                               405.
              Ad'ustmp"t. tor Items Daid by Miler In advance          Ad'u"lmp"ls for items n ..ld bv r:"lIer In ady"nrp
            1M. r ~ullown taxgs         In                        In<: """"A OW" laxOS           10
           ln7 COUrt'" ..e.     11/07   I~ 12/31           B09.~1 407. I"'n"nlv 13xQS  11/07 10      12/31             809 31
           tn. A••o.emon"               to                        "08. AS5""",menIS                                                                                '0
           109.                                                   409.
           110. WASTE FEE 11-7 TO 9-30-02                  30l.TI 410. WASTE FEE 11-7 'ID 9-3n-()2                     301.TI
        1111.                                                                                                 41 ,
           112.                                                                                               41?

         100 . ""n.,,, AMOUNT nul' FRnM B()I:lRnWEA   437 887.34 120. ~RI'l.~~ AMO"",/T DU!= TO .<:Ell "R                                                                                  428 III 08
        1200. Amounts PlIid Bv or In Behalt of Borrnwer           <00 R"rfllctions In Amount 0 e To Seller
         201 n~nn.~ nr ~.mgsl money                     20 OM--nr <nl Exe... n~~~.. I ..... "',"'''';OI\*'
         202. Prine".' .mn"n n' npw 'oanlsl           -27 000.00 eno. ·"9Ilklm....' ~~ ........ I~ .~11er ('~o 14COI                                                                        29 950.00
           203. Existinn loanlel 'ok.." ."h;..r.t 10                                                         .n3. Existinn Inan'sl takon s"hl." to
        1201.                                                                                                504. P·u~H of 'i~' morto.soe loon                                             139211 66
                                                                                                                      (.M)I,('                                          CN
           205.                                                                                              oN.      P'.~H'" '-~n" mort~.n" 10'n

        I:>or;.                                                                                               "". ESf'V('W FDR 2001 a::urrY 'ThXF.q                                          5 765.3°
           207                                                                                                ""7
           20'                                                                                                <flA.   WATER ~viCE                                                                  "9.71
           209.                                                                                              509      ESCRCW Fffi FINAL WAWR BILL                                                 150.00
                     Adiustments      lor   item..         nnllid bv sell"r                                        Ad·uslmpn t .. fnr jtpms unDaid by                            Ileller
           2'0. I"'~.llown loy••                         In                                                  '10.     C~ltown taxes         tn
           211. Counlv Iaxes                             'a                                                  ell ('N'n'" ax"                In
                                                                                                                                            In
           212. A••o•• m.nl'                             10                                                  '10
        I'll                                                                                                 <13.
          2'4.                                                                                               514.
        I ?I~                                                                                                515.
        121R.                                                                                                ·IA
        1017                                                                                                 <17
        12,8                                                                                                  <".
        I"Q                                                                                                  '1°

          2:1l'l TOTAl PAin RVIFOR ROAAOWER
                                                                     -   .
                                                                                    147 000.00 520. TOTAl AEO""T1nN A....... '.". DUE Se.U;Fl                                              1']l';.1:'l~.72
           :JOO. r:""h At l;.. tllement From or To                                                       AI S ..ttlem .. nt To or Frnm Spl!pr
                                                                                                             FJlO     r:""h
        l:lOl r.rn.. amoun' duo from hor7ow., lline 1201                          417.RR714 <A ",,~ • • • ",.I..~I ..... In ••,..... In" ."",                                              428 1l1.OB
        11M lac. 'mn"n'" n~1rt '''/In, hnrmw,., Ilin" ??fll                       ~OO 002. ~A",(clion amounl d.." ........ lin" ~\                                                         175.136.72

                                                                                                      "'4 "",.,.~ ~
           303. CASH

        . ./7$:' r
        "~?5'" "''Js>lL'"
         "~,
                            FRCN        e
                                    HUD·I     ·""·r·
                                            ...."·. · n•
                                                       I I..
                                                                                      Q()AA7

                                                                       '0 I" ''''01 m, ••••           1.'"      In• • • •
                                                                 ,I, .... , . . . . . . . . . . . . . , . " .1 Ih • ...,0-
                                                                                                                             .;, 'R' ' . . .
                                                                                                                              Ihu '~ "'. I ~"Ilt

                                                                                                                                         , ~.
                                                                                                                                                      SELLEFl

                                                                                                                                                   ."1.          m.... ,.M "OO'p"
                                                                                                                                                                                           252 974,36

                                                                                                                                                                                    .n. o" ••,.. ~."'. mU.

                                                                                                                             "\ . q ~;ltLu
       ~_o~_'m/_                       ~~"fflO.".                                                                                                                                                       sa .,


       .             J~                                                      ;.~8..,.w"                              En,     ~I     uo""o,.-

                                                                                                                                          /                 \
                                                                                                                                                          RESP.\. HB c:106.2 - REV. HlJo., I31BSI
                                                                                                                                                                                                       "'or
       FROI'! Case 1:08-cv-01857 Document Entered Filed 02/14/2008 04:35PM P3
                                           30-3                         Page 13 16
Case 1:02-cv-20285-PAS Document 13 :305665~f78 on FLSD Docket 04/12/2002 of Page 13 of 16
               : DP                FAX NO.                Jan. . - 2002
       u.s. DEPAFHM[r;,               OF HOUSING ANO ... ,,"AN (\EVELOPMENT                     SETILUJlENT STATEMENT                                           PAOE 2
        L. SETTLEMENT CHARGES:                                 FIU; /I: 011Vl1309                                                         PAID FROM  PAID FROM
         700. TOTAl SAlES/BROKER'S COMMISSION based On priea S 427,000. OOli'i,l 6.00.                              25,620.00            BORROWER'S SELLER'S
                 DivisiOn 0' commi3Sion       cr.,. 700) .s follow~:                                                                       FUNDS AT  FUNDS AT
         701.     •            12,810.00         10   BSSLlN3ER WX1l'EN MAXWELL                                                          SETTLEMENT SETTLEM[NT
         702,     •            12,810.00         10 1HE KEYES CI:MPANY
         703.     Comm~~ion     paid al San'amlll'li                                                                                                               25 620.00
         704.     PRCCESSINJ ffE                     WE KEYES cx::MPANY                                                                                               199.00
         800.    ITEMS PAVABlE IN CONNECTION WITH LOAN                                   P.O.C. Iterrs
         801.    loan OrlalnaliOn Fee           'l(,
         802.    loan Oi!counl                 'l(,
         803.    Appraio.1 Fee                 to
         1104.   Cred~ Report                  10
         SOli.   l!lndtlr'e IncP9ClIon Fee     10
         806.    Mta. Ins. Applicallon Fee 10
         807.    Assumpllon Fee                to
         606.     PR<XESS:W:; FEE                    VMUlARD M::lRTG'\GE CCRFORATIO'J                                                             275.00
         809.    roJRIER FEE                         VAN3l.WID ~ COR.roRATICN                                                                      50.00
        810.      FIRST LCDK B:NUS                   \ll\N3l.WID M::>R'IGAGE a:RFORATICN     150UJR
        811.     YIElD SPREAD PREMIU1 Vl\N:)JAR[) ~ OJRroRATICN                              4087.50111
        812.     Fl1XD CERTIFlCATICN                 FrnI                                                                                           7.00
        813.     UNDER.WRITIN3 FEE                   QiI\SE WINl-IA'ITAN ~ CORP.                                                                  275.00
        814.     IXX:'l1vIENT PREPARATICN QlASE MANHATI1IN M::R'IGAGE CORP.                                                                       195.00
        815. AdiitlOnal O1a.IQes            *** see Attached Adiendun ***                                                                         133.00
        900. ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE
        901. Inl..... 1 from 11/07/01 10 12/01/01 @s 55.99             IdaY                                        24 Dava                    1,343.76
        902. Mortgage In'urinci Premium lor        to
        903. HaZlird Insurance PrQmium for   lyrs  10 NATICNWIDE INSURANCE                                            1270B
        904. WINDSTORM FOR 1 YR                             fWlLl\.                                                   3159B
        905. FI..CX:O INS FOR 1 YR                         NATIOWlIDE                                                 1157B
       1000      RESERVES DEPOSITED WITH LENDER fOA
       1001.     Hazard Insuranca                          3 mo.@S        105.84 /mo.                                                            317 .52
       1002.     Mort989. In.urance                           mo.@S                Imo.
       1003.     City proPlrty ,ax8.                          mo.@S                /mo.
       1004.     Counly property lax~                      3 mo.@S        466.23 Imo.                                                         1,398.69
       1005.     AMua' Assessment~                            mo.@$                Imo.
       1006.     FLCXJD INSlJRAN:E                         3 mo.@S          96.42 Imo.                                                           289.26
       1007.     WIND.S"Irn'II INS                         3 mo.@S        263.25 Imo.                                                            789.75
       1008.     Agorogara Credk lor HaurdIFlood In•. City/County Prop Tax"•• MOllgag" Ins & Annual A~~QSsmenIS                                   -0.22
       1100.     TITLE CHARGES
       1101.     Stnlemtnt or Closing 181 10       'UlE TITIE Wl\.VE, INC.                                                                       300.00
       1102.     Abstract or llile .earo~   10     AT1F-35.00/TW-115.00                                                                          150.00                    295.00
       1103.     Hie _minalion              to     THE TITLE WAVE, INC.                                                                          150.00
       1l().t.   nle Insurince binder       to
       1105.     Oocum"nr Droo,ralion       10     ROBERT I. FEIN, E'.SC.UIRE                                                                    250.00
       1106.     Notlry r....               to
       1\07.     Altorn"y's fggs            to     ALVAfID CASTIUD, ESQ.                                                                                               1,200.00
                  (includes above ileM' No:                                                     )
       1106.     Hie Insurlnce              to     ATroRNEYS TITLE INSI.JRAu:E FUm                                                            2,235.00
                  (nelvCles Ibove ilems No'                                                     )
       1109.     len (lor'. cov"ra"" S    327,000.00 ---- 25.00
       1I 10.    o..ne(s coverage $       427,000.00 ---- 2210.00
       1I 11.    TI11.E INS REBA'IE TO             OCRRCWER FRCM TITIE WAVE INC.                                                                -884.00
       II 12.    F'I.ORITiI. FORM 9                THE TInE WAVE, INC.                                                                           223.50
       11 t3.    8. 1 & 6. ENXJRSEloml' TIiE TrITE Wl\.VE, INC.                                                                                   50.00
       1200.     GOVERNMENT AECOflDING AND TRANSFER CHARGES
       1201.     Reeor(l;"o fee.            DHd'           6 • 00 ; Mottgagt S      96 . 00 ; Releases S                                         102.00
       1202.     Cltv/counly/sl.amps        Daed S                : Mortgage.
       1203.     Slate lax/.lamp.           DeedS 2. 562 .00 : Mortgage' 1 144.50                                                             1 144.50                 2,562.00
       1204.     IntamibJ e Tax -                                                                                                               654 ,00
       1205.     MARRIAGE: AFFIDiWIT                                                                                                                                           6.00
       1300.     ADDITIONAL SETIlEMENT CHARGES
       1301.     Survey            10  'tOJA. SURVEYORS                                     rn::;                                                 265.00
       1302.     Pe.l WlspllCllon  10
       1)03.     LIEN SEARQ{           A-I TInE SiJPI?ORl' SERVICES, IN:                                                                                                     43.00
       1304.     cnJRIERJFED EX FEES   'lliE TInE Wl\VE INC.                                                                                          62.50                  25.00
       1305.
       1306.
       1307.
       1308.
       uoo.
       ". ·~41,'''"'·~~·''·
                 .oJ'AL SE ;TLEMENT CHARGES (or"... on lIneli 103 and 502, Stellona J and K)                                                  9,776.26            29,950.00

       .n, "" .m....                                                                                    /. / . 0
                                                        p"p...... A'....... " ,......" •• " .1 I.........",.,. I .......... D' .11
                                                                                                                       )             co"..... 'v.d.   I• • • •"'VII"   ~   '''.'dA •• '


       "" ,..         ....."". ON'"                                    1:0,11,",,,1 XOl!i           {




                                                                                                                             F£SPA, HB ~2               FEY.   HUD-I (3186)
       FROM Case 1:08-cv-01857
Case 1:02-cv-20285-PAS Document 13 :3056655678 on FLSD Docket 04/12/2002 of Page 14 of 16
            :tp                Document Entered Filed 02/14/2008 04:37PM P4
                                 FAX NO. 30-3           Jan.  ?OB2  Page 14 16                                                                     1~




                                                                ."i;!,,~_¥iTI".l~k$~~!fI~f2· ;!;;:~l(~iI~'\*"·:';:'iTIfiii"·"
                                                                                                                                                                            ,·._:~i,·._:~ :[~·, ~
                                                           .' : ·: . ~I~~::i~~ryJ~l~~~~~Hs~c'·: .:.:, c~·:~~'.·: c:~.,: ..,.~::~:~--::·-,~_: ,_:;.'-~ ;·.:,~ .:·; ,:~.,: ~•~~~-=-':-.-,:_.~:
                                           .... ;.::.::
                                           :.- :; ....:
                                          ..                                                          •                             .· ••.. •.
                                                                .11420 NOR1R KENDAU;;C:DRIVE,:.. • .:•·. .:•(·.: •:. .·:;•·'..,•:•. :_•·.-.:,;.::        •:••...:.:•.:.•.. •:.,..•:.;:.• :.••..•:..• •.•.•.:•'•.. •.•-.• : •i. :.:-•. .•j..•...•....:'.:.:._.,: . . . .".. .•. ...... ::":;.-.•.• . .:.:... . .:.'
                                                                                                                                                          • • • -• .- :.:••.• •.
                                                                                                                                                                            .. .                                                ..•.• ,.::.•.•. ...•: .. ... :.::. .•
                                                                                                                                                                                                                                                . ...
                                                                                                                                                                                                                                          : .: '._          .



                                      ...,:'"

         SELLEA(S):                   GUillERMO DAMIAN and EVELYN A. DAMIAN


         PURCHASER(S):...... ALBERTO DURRUTHY and JACQUELINE DURRUTHY


         LENDER:                      CHASE MANHATIAN MORTGAGE CORPORATION

         PROPERTY:                    15430 SOUTHWEST 77 AVENUE, MIAMI, FLORIDA 33157


         FILE iI:                     01TW1309

         SEmEMENT DATE: 11/07/01

                                                                                                                                                                            Borrower                                                                                                                                 Seller

                 ITEue~   PlIVARI "   IN r:nNN~~T1nN WITH LOAN
        816
       1817      TI\X   ~                                                                                                                                                                                   70.nn
        818, MESSFH3ER FEE                           -r"'I-ll>.=                                                                                                                                            50 00
       161g, Fl1XD ~TICN                                  FmI                                                                                                                                               13.00
                                                                                                                                     TOTAL~                                                        133.00

                 TITLE C
       1,114

          ,.
        1115


        1117
        1118.
       IllIG
        1120.
        11'1
                                                                                                                                     TOTAl I::



        1:lO9.


        '311

        13'3.
                                                                                                                                     TOTALS
            Case 1:08-cv-01857 DocumentUrben D,velopmenl
                                        Entered on 02/14/2008 Page 15 16
                                         30-3           Filed
Case 1:02-cv-20285-PAS Document 13V.5. Deptnm,nt 01 HOUilng FLSD Docket 04/12/2002 of Page 15 of 16
        .;.; . .;,....;;,;,;;,;,;;.;,;;,;,;;;;;;;,;;-----.. . . - --------""""--!---------
        A. Settl.m,nt 51.,emenl

        B. Type of ko.n
                                    aM                                      OMB No. 2502.()265


                                                                           -T"--=7,-:L-O-.-n":'N:-u-m~be-r----r-':'
        -0;c.;,.-FH--'--0--2-.F-m-H-.---.------r--:8.~F::,~I.":N':"'u-m":b9-r                                   •.""':':Ma~r1-g.-:,n-.-.-::C:-.-N:":u-m-.- -
                                                                                                                                            •• -
                  n               , , 3 . Conv. Unlns.
        o '.    VA       0 S. COnv.lns.                         HunUngton      10; 1689802680

        C. NOT!: This lorm Is luml,nelllo glv. you a atatomenl 01 aetu.1 sel1tement coata. Amounts paid to arid by th. settl,m,nt ag.nt .re ehown. lI.m.
                 marked "(p.O. c.)" w"e paid outside the closing; thay are .hown her. for Inlonnartonel purpo.es .nd Ire not Included In the totals.
         D. NA"! OF 1I0llll0WER:           Carol Hundngton, a single woman
            AdClrftI 01 Borrow.,.:         2150 S.n Souer Blvd. PHFI. Miami, Aor1d. 33180
         E, NAMe OF IELLER:                                                                                                                     TIN:
            Addr... 01 Seller:
        F. NAME OF LENDER:                 Cha~, M.nlultlln Mor1Qaoa Corpor.lIon
           Addr8.. 01 Lend.:               2255 Glad.. Ro.d Sulto 205E . Boca Raton, Flortd. 33431
        O. PIIOPI:RTY LOCAnON:             2150 San Souoi Blvd. PHF1, MlllmI, florid. 33111g
        H. SETTLEMENT AGEKT:               D.vl', SUver & LlII/Y. P.A.                                                                          TIN: 6~-o~8n82
           Pile. 01 Settlem.nl:            113~ K.ne Cotlcour.o, Miami. Florida 331~4                                                           Phone: 305-358-1112
        I. SETTLEMEKT DATE:                3112102                                             DISBURSEMENT DATE' 311lli02



         .1 SlUmn:lrv ul bOll ower's IrtlnC;ilC'lon                                        K SUll1nl.arv nf sr.llcr 5 lrdn!otttctlOn
           100 GID~~ clmOtlnt due 110m borrnw{'r:                                           JOO Gro'!i'S ilmnllnt duC' 10   ~ellp.l:
         101. Contr.ct sales prie.                                                       401. Contract .01•• Prtce
         102. P,reonal properly                                                          402. P0r3on.1 prop.rty
         103. Sol1temlln1 cherges 10 bOfrower (Line 1400)                      23.841.24 403.
         104. Payoff of AllIt mortgage loan                                    79.328,33 404.

                                      ..
         105. Payoff 01 sQCQnd mortgage loen

         106. CIly/lown taxes
                                            ..
                                                                                         405.

                                                                                         406. Cily"own 1~.Dt
                                                                                                             ,

         107. County taxe.                                                               407. County Ill.a,
         106. As•••• m.nll .                                                             406. Aeeeesmenis
                            "
         109.                                                                            4011.
         110.                                                                            410.
         111.                                                                            411.
         112.                                                                            412.

                   .
         120. Groa••mount due 'rom borrower:
           "
         201. Deposit or earnest monay
                                                                                                                      .
                                                                              102,987.57 420. Groll .mount dUI to Itll",:
                                                                                               "
                                                                                         501. Exce•• dopo.~ (ea, inslnJcUon.)
                                                                                                                                       .                                  0.00


         202. Principal amount of new 10an(l)                                 110,000.00 602. Settlement charo•• to sener (liI'la 1400)
         2()3. EXisllng 10an(l) lllken subl.cr to                                        803. Existing 10an(.' taken .ubJ.ci to
         204. Princlp.1 .mount 01 seoond mortgage                                        504. PlVOff 01 ftrol mOrlg.oa loan
         205.              :                                                             505. Payotl Of ",cond mortgog. loon
         206.                                                                            508. Deposita hald by seller
         207. Principal amt of marleall' hold bv uller                                   607. PrlnclOlllmt 01 mortg.ge held by ,,'I"
         208.                                                                            508.
         2011.                                                                           509.
                                      o.    ,
         210. Cily/town lax911                                                           510. Cllyi10wn tax""
         211. County "'xes                                                               511. COunty laX91
         212. AUllGMlenls                                                                512. Assessmente
         213.                                                                            513.
         214.                                                                            514.
         215.                                                                            515.
         218.                                                                            516.
         217.                                                                            517.
         216.                                                                            518.
         219.                                                                            519.


            "                         .
         220. Tolal p'ld by"'" borrower:
                                                                                                                          ..
                                                                              110,000.00 520. Tot.1 "duellon. In .mount due ..1I.r:                                       0.00

        301. Gross amol11l due Irom borrower                                  10U87.87 601. Oross amount due 10 "IIer                                                 0.00
             (1Jn8120)                                                                      (lin. 420)
        302. Le88 ,mount paid byllor th. borrower                           (110,OOMO) 602. L,u lotol .. duc~onl In amount due saller                                 0.00
             (line 220)                                          -                          (line 620)

        303. Cash (   0   from    o To     ) Borrow.r.                          7,032.43 803. Cas~ (     0    To   o From         ) 9aller:                               0.00

        Sub.II""" I'orm lOtI s.n" S'-f.m.nl:              ThalnformaUon conlllined In block, E, Q, H, Ind I arid on lin' 401 la Imporlanllllxlnlo""alion and II being
        lumlehed 10 Ill' IRS. ")IOU are required 10 lIIe • r,tum, a neglioenc. penally or orner eanc~on wYI be Imposed on you II this nem II requlrelllD b. reported and
        the IRS det.rmlnes IIlal tt ha, nol been reported.
        Sell'r In.truellon.: . It 11111 real ostalS was your principal rlGid.nce, flle Form 2119, Sale or Exchange 01 P~ncipaJ R••ldence, 'or .ny g.ln, IVlth )lOur lax
        rSlUm: lor other Ilanl8c~on., complelo !h•• ppllc.ble parts 01 Form 4797, Form 82~2 and/or Schedule 0 (FOrm 1040).


          ....




                                                                                                                                                          Doubl.nm~

                                                                                                                                                                                 II
                                                                   Page
          Case 1:08-cv-01857 Document 30-3 Filed 02/14/2008 Page 16 2 16
Case 1:02-cv-20285-PAS Document 13 Entered on FLSD Docket 04/12/2002 of Page 16 of 16
                                                                                                                                                             PAid from        Paid from
      700. Tot" SlllesJBroker. Com. based on prlca                                       a                                         .'--.,/                  Botrowa~,           Sellar's
      701..                                               %to                                                                                                Fund. at          FUnds al
       M~                                                 %~
                                                                                                                                                            Salllamant        Settlement
      703. Comml.slon p.ld II a.tU.mant
      704.                                                  to

      801.    Supplaman1AJ origination                    % ~ Point. Bank                                                                                          275.00
      802.    Doc P Fea                                   % to Chue M.nhattan Mortg. a Corporation                                                                 195.00
      803.    Apprals.lt...                                 ~ Pointa Bank                                                           270.00
      804.    Credit raport                                 to Polnhl Bank                                                           80.00
      805.    Tex Ralated Service Faa'                      to Tr.nllm.rlca A••ll!llata Til)( Servtoe                                                              70.0Cl
      808.    Undarwrl~ng FH                                to Chlaa Manhattan Mort • a Corpor.tlon                                                               275.CICI
      807.    Yiold Spread Pramlum to Mtg Brokar            to Pointe Bank                                                        137MO
      808.    Courier Fee                                   to Cha.. MAnhattan Mortg.ge Corporation                                                                 80.00
      809.    Rood Det.rmlnallon • Inlllal                  to PD91                                                                                                 13.00
      81Cl.   Flood D.termlnatlOn . ur. of loan             to CMse Manhattan Mortgage Corpor.tIon                                                                   7.00
      811.    PrOCAulng                                     to Pointe Bank                                                                                         100.00

                                                                  04JC) 1102         0 19.5900             Ida                                                    274.28




      1001.      HaUrd In..rance                                                     month.     0                   Ir month
      1002.      Mortgaga In.uranca                                                  montha     0                   ar month
      1003.      cn prOjl.rty taxe.                                                  month.     0                   armonth
      1004.      County property tax.1                                                 nth'     a                   .r month
      1005.      Annual a••••smanl.                                                  month.     0                   ar month
      1006.      Rood in.urance                                                      montha     a                   ermonth
      1007.                                                                          months     0                   .r month
      1008.                                                                          monthe     0                   8r month
      1009.   Aggrllllaia accounting adjustment

                                                            to Davis, SIlver & Lavy. P.....                                                                      ,300.00
                                                            to Dlvll. SllVar & La ,P.A.                                                                            125.00
                                                            10 DIVI., 5ilv.r & Levy, P."'.                                                                         15MO
                                                            10
                                                            10
                                                            IQ Clerk   01 Court                                                                                     lC1.M
                                                            10

                                                            to Davl" Sliver & LIVY, P.A.

                                                      $110,OOMo ($380.00)




      1201. Rocording rao"                      Deed                                                       191.60 R.,o••••                    121.00              112.60
      1202. Cily/county tuletomps               Deed                                                      $220.00                                                 220.00
      12C13. Steta lex/st.mp.                   Doed                                                      $385,00                                                 385.00
      1204.
      12~.


      1301. Courlor Foe                                     to   polntl Bank                                                                                       50.00
      1302. Incomln Wire Fie                                to   Davis, SAver & L.vy. P.....                                                                       10.00
      1M3. Courllll'/FedemJ    re..                         to   Davis, SRver & Le ,P.A.                                                                           40.00
      13C14. Copy/Poetagl                                   to   D.vf., Slivar & Levy, P.A.                                                                        20.00
      1306. MBNA Credit Card Debt                           to   MBNA
       306. Clti Cradh Card Dgbi- .,8287                   to    CiU                                                                                            9,92U7
       307. Am.~ Credit Card Debt· 22112                   10    Amerlcen Ex reas                                                                                 135.00
       308. MBNA Cradll Cerd Debt                          to    MaNA                                                                                           4,570.85
       30P.




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       .0.'0'""0' Tlllo,a u.s. CodsSecIion lD01 ord SeCUon 1010.                                                                                                         Doubl.nmelD
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         Case 1:08-cv-01857               Document 30-5                               Filed 02/14/2008         Page 2 of 2


   1~~rahuna7@lmll                            "8-.I-.MMD-                                                       W*.IWO)BII
                                      SErrLEMENT STATEMENT iTranulctions WlthoUt SellerS)
                                                                                                                     -
      ~umsr3642185515
   FII~                             I L O . ~ ~vnbor: 0 1 5 4 ~ ~ 4 1    l n n o ~ s s e caw%
                                                                                       ins.
   NWE bNO N2QRISS OF BORROWER: M)THURWALER 4361 B W G W O N DR MOBILEAL 38619.1808

  NAME AND AODRESS OF LENDER: AMERIOUEST- IRYINE2800MICHELSDNOR IRVINE. W, %312.7D5l

 rn




1 415.                                                1                   I                                      I
 1000. Rsrsrv.r DmwlLsd Wlth Lendsr                                           1510.
                                                      I         1716.31
                                                                              1511.
                                                                                                                I
                                                                                                                 I                I
 row. caung pmpw laxas                                I                       1512.
 100s. Mllual ass-nb                                  I




12W.                                              1
1205.
1300. Addlllolul Sotll.menf C1ergos
                                                                     - ,602               o
                                                                                  ~ l n v IW scttlamnt mamsa
                                                                                  (Llnc 44mi
                                                                                                                     14.615.7B

1301. smw                                                                 1 8 0 3 . im~ b b ~ 1 s e m n b
                                                                                     ~ ~ ~            D              ssa,~.77

1 X n LENDER'S CRWT                                         s    .     ~
                                                                     1 4801. Equalr dlrbum~mernsto
                                                                                                 horrovn             $2,317.45'
1JM.




                                      ARTHUR WALKER

				
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