RESPA Compliance

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7^th Circuit Court of Appeals

Case Name: Stephen H. Perron et al v. J.P. Morgan Chase Bank, N.A.

Case No.: 15-2206

Officials: EASTERBROOK, WILLIAMS, and SYKES, Circuit Judges.

Focus: RESPA Compliance

Stephen Perron and Christine Jackson owned their home in Indianapolis subject to a note and mortgage serviced by J.P. Morgan Chase Bank. In 2012 the couple divorced, ending their 25-year marriage. They blame Chase for contributing to the collapse of their marriage by failing to comply with its obligations under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601–2617. RESPA requires mortgage servicers to correct account errors and disclose account information when a borrower sends a written request for information. In 2011 Perron and Jackson sent two such letters accusing Chase of erroneously paying the wrong homeowner’s insurer using $1,422 from their escrow account. The mistake was their own fault; they had switched insurers without telling Chase. When the bank learned of the change, it promptly paid the new insurer and informed the couple that their old insurer would send a refund check. The bank also told them to forward the refund check in order to replenish the depleted escrow. They didn’t. When the refund came, they pocketed the money instead. So the bank adjusted their monthly mortgage payment to make up the shortfall. When the couple refused to pay the higher amount, the mortgage went into default. Instead of curing, they sent Chase two letters requesting information under RESPA and demanding that the bank reimburse their escrow. In response Chase sent a complete account history, including a detailed escrow statement. The couple then sued Chase claiming that its response was inadequate under RESPA and caused more than $300,000 in damages—including the loss of their marriage. They tacked on a claim for breach of the implied covenant of good faith and fair dealing. The district judge entered summary judgment for Chase.

We affirm. Chase’s response almost perfectly complied with its RESPA duties. To the extent that any requested information was missing, Perron and Jackson suffered no actual damages and thus have no viable claim. Nor did Chase breach the duty of good faith and fair dealing, assuming that Indiana would recognize the implied covenant in this context.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.