Settlement of a lawsuit alleging that title companies in mortgage refinancings charged Washington, D.C., borrowers phony closing fees ended a lawsuit that had been going on for eight years and resulted in a monetary award as well to AARP's Legal Counsel for the Elderly.
In 2002, borrowers filed a lawsuit challenging the fees imposed during refinancing by several title companies for "walk through" or "judgment report" fees. These fees were charged to approximately 277 homeowners at their settlements. Borrowers alleged that the fees paid for nonexistent services, thereby violating DC's Consumer Protection Procedures Act.
Two of the title companies had already settled when Chase Title, one of the largest, agreed to a settlement. The settlement established a fund of $232,500 to both compensate the borrowers and pay costs of distributing settlement proceeds. Borrowers had their fees returned dollar for dollar.
A judge recently approved payment of undistributed funds of $20,788 (settlement funds owed to borrowers who could not be found) to AARP's Legal Counsel for the Elderly (LCE). LCE is a well-respected advocate for older residents of D.C. that defends homeowners from fraud and abuse in refinancing or home equity loan transactions, and those who were unfairly foreclosed upon or otherwise displaced and defrauded,
Borrowers in this class action were represented by attorneys with AARP Foundation Litigation and Stein, Mitchell, & Muse.
What's at Stake
A home is often a family's largest asset and one in which they have invested a lifetime's worth of earnings. Unfortunately, refinancing scams often prey on equity-rich but cash-poor borrowers — particularly in times of economic turmoil — to siphon away some of the equity through a variety of tactics. Payment of bogus fees is one of these tactics. Federal and state laws attempt to protect borrowers and it is important that these laws be strictly enforced, by private action if not by government agencies.
LaPoint v. Mid-Atlantic Settlement Services was in the Superior Court of the District of Columbia.
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