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Couple who claim bank's actions led to their divorce lose appeal

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An Indiana attorney and her ex-husband couldn’t convince the 7th Circuit Court of Appeals that a bank violated the Real Estate Settlement Procedures Act with regards to an errant insurance payment and that alleged error led to their divorce and caused $300,000 in damages.

Christine Jackson, an attorney who represents consumers fighting loan servicers according to the opinion, and Stephen Perron, a retired criminal investigator for the IRS, had a mortgage through Chase Bank. They neglected to tell Chase they had switched homeowners’ insurers, so Chase paid Allstate’s $1,422 premium. When it learned that Homesite was now the insurer, it paid its premium from the escrow account and sent a letter to the couple telling them to send a refund check from Allstate to replenish their escrow.

Instead of depositing the refund check into their account, the couple kept it, leading to a higher monthly mortgage payment. The couple refused to pay this, but did send a partial payment to Chase to make up the shortfall. The mortgage ended up going into default and the couple sent Chase two letters requesting information under RESPA and demanded the bank reimburse their escrow. Chase denied the request, leading Jackson and Perron to sue, claiming the bank’s response under RESPA was inadequate and led to the loss of their marriage. They also alleged the bank breached the implied covenant of good faith and fair dealing.

The district court ruled in favor of Chase. A bankruptcy trustee in the Southern District of Indiana is pursuing the suit in Jackson’s stead since she has filed for bankruptcy.

Chase didn’t breach any duty by holding their partial payment in suspense, Judge Diane Sykes wrote, noting the mortgage contract says the bank can accept a partial payment without waiving its rights to enforce the term of the loan.

The judges also affirmed the district court with regard to the couple’s RESPA claim.

“RESPA requires servicers to correct account errors and give requested information to borrowers. Perron and Jackson were not harmed by an uncorrected account error because there wasn’t an error in the first place,” Sykes wrote. “Nor were they harmed by an information blackout. They knew Chase had paid the $1,422 from the escrow account to Allstate and why. They also knew why the December 2010 payment was held in suspense. … Simply put, Perron and Jackson weren’t harmed by being in the dark because the lights were on the whole time.”

Sykes also noted that emotional-distress damages are recoverable under RESPA, but the breakdown of a marriage is far too attenuated from the alleged violation to cross the proximate-cause threshold.

The case is Stephen H. Perron and the United States Bankruptcy Trustee for the Southern District of Indiana on behalf of Christine M. Jackson v. J.P. Morgan Chase Bank N.A., 15-2206.
 

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  1. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

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  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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