A copy of the opinion is available at:
Two sets of borrowers brought a class action lawsuit against Quicken Loans, Inc. ("Quicken Loans") claiming to represent everyone who obtained a residential mortgage loan from Quicken and was charged discount points without receiving the below-market interest rate allegedly promised. The borrowers' complaint essentially claimed that Quicken charged the borrowers discount points for a below-market interest rate without providing the below-market interest rate, arguing that this violated RESPA's prohibitions against charging for real estate settlement services other than for services actually performed.
The Eleventh Circuit affirmed the district court's dismissal of the borrower's complaint, holding that discount points such as those charged in this case are not settlement services under RESPA.
Moreover, the Eleventh Circuit found the borrowers' contention that Quicken did not provide them the below-market interest rate they bargained for in connection with the discount points "manifestly implausible." It reached this conclusion based on the notes the borrowers signed after reading the loan documents, including the HUD-1s and their inclusion of a loan discount amount, and the fact that the borrowers made no objection to paying the advance interest called for by the discount points, proceeding to close the loans anyway.
Ralph T. Wutscher
Kahrl Wutscher LLP
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