463 F.3d 793 (8th Cir. 2006), 05-3068, Mitchell v. Beneficial Loan & Thrift Co.

Docket Nº:05-3068.
Citation:463 F.3d 793
Party Name:Ty S. MITCHELL; Kimberly S. Mitchell, Plaintiffs-Appellants, Christopher Mauer; Mary Jo Mauer; James L. Engstrom; Kathleen P. Engstrom, Plaintiffs, v. BENEFICIAL LOAN & THRIFT COMPANY, Defendant-Appellee, Household Industrial Finance Company, Defendant.
Case Date:September 06, 2006
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 793

463 F.3d 793 (8th Cir. 2006)

Ty S. MITCHELL; Kimberly S. Mitchell, Plaintiffs-Appellants,

Christopher Mauer; Mary Jo Mauer; James L. Engstrom; Kathleen P. Engstrom, Plaintiffs,

v.

BENEFICIAL LOAN & THRIFT COMPANY, Defendant-Appellee,

Household Industrial Finance Company, Defendant.

No. 05-3068.

United States Court of Appeals, Eighth Circuit.

Sept. 6, 2006

Submitted: May 18, 2006.

Page 794

[Copyrighted Material Omitted]

Page 795

Eric L. Crandall, New Richmond, Wisconsin (Thomas J. Lyons, Sr., on the brief), for appellant.

Chad A. Snyder, Minneapolis, Minnesota, for appellee.

Before MURPHY, BEAM, and BENTON, Circuit Judges.

PER CURIAM.

The district court 1 granted summary judgment to Beneficial Loan & Thrift Company. Ty S. Mitchell and Kimberly S. Mitchell appealed the issue whether a loan transaction is subject to the Home Ownership and Equity Protection Act (HOEPA). This court affirmed on June 21, 2006. The Mitchells petitioned for rehearing, arguing that some amounts financed were not disbursed, making them "points and fees" under HOEPA. This court grants the petition for rehearing, vacates the prior opinion, and files this opinion affirming the district court.

The Mitchells assert that Beneficial violated HOEPA. HOEPA, as relevant here, requires creditors to make additional disclosures to borrowers if the total points and fees payable at closing exceed 8 percent of the total loan amount, or $400, whichever is greater. 15 U.S.C. §§ 1602(aa)(1)(B), 1639(a). The Mitchells argue that the $455 appraisal fee, $821 title insurance fee, $67 phone bill, or $1,178 overstatement of principal should be included in the total points and fees of their loan. If any one of these were included, the total points and fees would exceed 8 percent of the total loan amount, making the loan subject to HOEPA.

Appraisal and title insurance fees, if bona fide and reasonable, are excluded from HOEPA's definition of total points and fees. 15 U.S.C. § 1605(e); 12 C.F.R. § 226.4(c)(7). On appeal, the Mitchells claim that these fees are not bona fide and not reasonable because they violate the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607(b). The district court correctly found that these fees did not violate RESPA because they were paid to an unaffiliated third party for services actually performed, and, in any event, Beneficial...

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