Are you a Borrower under RESPA if you are on the Mortgage but not the Note?

In Pittner v. Castle Peak 2012-1 Loan Trust (Memo & Order April 14, 2021), the United States District Court for the District of Massachusetts awarded summary judgment to Defendants, Castle Peak 2012-1 Loan Trust and Selene Finance LP, on Plaintiff’s claims of violation of the Real Estate Settlement Procedures Act (“RESPA”) (12 U.S.C. § 2605(e)), breach of contract, and violation of Chapter 93A.

Plaintiff’s wife signed a promissory note in 2007. Plaintiff and his wife then effectuated a mortgage on property in Florida. Castle Peak held the mortgage and Selene was the servicer. The mortgage payments to Selene were to cover taxes, insurance, interest, and principal. Plaintiff filed a Chapter 11 bankruptcy claim in 2012, which included the mortgage and promissory note. Plaintiff filed an amended reorganization plan in 2013, continuing to reference the amounts owed to Defendants and then filed an assented-to motion further amending the plan with regard to the mortgage interest rate; both were approved by the bankruptcy court.

In 2014, Plaintiff’s wife received two default notices from Selene. Plaintiff then “submitted a qualified written request (‘QWR’) for information about the mortgage and [n]ote,” pursuant to RESPA. In response, Selene provided Plaintiff with an accounting. At some point in 2014, the parties were divorced. In 2015, Plaintiff’s (ex-)wife received further information from Selene requested by Plaintiff; Selene indicated they could not send the information to Plaintiff since he did not qualify as an “authorized party” (they did provide information as to how to make Plaintiff an authorized party, but those steps were not taken until 2017). Also in 2015, Plaintiff had two loan payments rejected by Selene for being an incorrect amount or not enough to remedy the default. In 2016, Plaintiff submitted a post-confirmation reorganization plan, which was approved by the bankruptcy court retroactively to 2013.

The Court awarded summary judgment to Defendants on the Plaintiff’s RESPA claim.  While a borrower is permitted to submit a QWR under RESPA, and servicers must respond, the Court determined that Plaintiff did not have standing as to this claim because he did not sign the promissory note. The Court explained that “[u]nder RESPA, the term ‘borrower’ means a borrower on the loan, not merely a borrower named in the mortgage,” quoting Dionne v. Fannie Mae.

The Court also awarded summary judgment to Defendants on Plaintiff’s breach of contract claim because it determined that there was no breach of the reorganization plans (which are considered contracts), as well as on Plaintiff’s Chapter 93A claim as Plaintiff lacked standing as to his RESPA claim and, again, there was no breach of the reorganization plans.


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