Case Summary:
Plaintiffs/debtors filed an adversary complaint against servicer Beneficial Financial I Inc. (“Beneficial”) alleging Beneficial impermissibly transferred servicing of their note and mortgage in violation of the Real Estate Settlement Procedures Act’s (“RESPA”) notice requirements. Following a foreclosure judgment, the Plaintiffs stated that they attempted to contact Beneficial to negotiate a workout agreement on their second mortgage. Beneficial assumed servicing of the Plaintiffs’ second note and mortgage when it acquired and/or merged with Beneficial Financial Wisconsin Inc. In addition, the Plaintiffs argued that Beneficial improperly and fraudulently denied it owned or serviced their loan, which constituted a violation under Wis. Stat. § 224.77(1)(m). That state law makes it unlawful for a mortgage banker to engage in improper, fraudulent or dishonest dealing. Beneficial moved for summary judgment. The Court granted summary judgment in favor of Beneficial because the Plaintiffs did not present any evidence that they sustained actual damages.

Statute/Rule References:
12 U.S.C. § 2605(b) -- Servicing of Mortgage Loans - Notice of Transferor of Loan Servicing at Time of Transfer
12 U.S.C. § 2605(f) -- Servicing of Mortgage Loans - Damages and Costs
12 C.F.R. § 1024.33(b) -- Real Estate Settlement Procedures Act – Notices of Transfer of Loan Servicing
Wis. Stat. § 224.77 -- Prohibited Acts and Practices of Mortgage Bankers, Mortgage Loan Originators, Mortgage Brokers
Wis. Stat. § 224.80 -- Penalties and Private Cause of Action

Key Terms:
RESPA