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Bamba v. Resource Bank

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


August 1, 2008

MAKOMI BAMBA, PLAINTIFF,
v.
RESOURCE BANK, COSMOPOLITAN REAL ESTATE SETTLEMENTS, INC., AURORA LOAN SERVICES LLC, AND WELLS FARGO BANK, N.A., DEFENDANTS.

The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff purchased a home in the District by obtaining a 100% loan in the amount of $515,000. (Compl. at 1, 4.) According to plaintiff, she was not qualified for this loan, and she was not properly advised of the "outrageous" interests rates and fees associated with the loan. (Id. at 2, 4-5.) Plaintiff claims that she "was set up for a default from day one," and that she "has suffered substantial economic harm and mental stress" as a result of the loan. (Id. at 4-5.)

Defendant Cosmopolitan Real Estate Settlements, Inc. ("Cosmopolitan") served as the settlement company at the closing for plaintiff's property. (Cosmopolitan's Mot. at 3.) Plaintiff alleges that Cosmopolitan and the other defendants "arrange[d] for mortgages for substantially more than the value of the property." (Compl. at 4.) Plaintiff suggests (but does not specifically allege) that Cosmopolitan "overlook[ed] the standard closing formalities" and charged excessive fees. (Id. at 5.) Plaintiff also claims that Cosmopolitan "lack[ed] prudence" and failed to make proper disclosures. (Id. at 6.) According to plaintiff, "[Cosmopolitan] closed so many other similar loan[s] that [it] had to know what was going on [but it] failed to stop it."*fn1 (Id.)

Defendant Aurora Loan Services LLC ("Aurora") served as mortgagee in this transaction. (Aurora's Mot. at 5.)*fn2 The only specific allegation against Aurora is that "Mortgagee knowingly and intentionally made fraudulent representations and misrepresentations and omission[s] of material fact in order to induce B[a]mba to enter the transaction. Plaintiff reasonably relied on the representation in executing the subject loan transaction." (Compl. at 4.)

Plaintiff alleges that Cosmopolitan and Aurora committed fraud*fn3 (Count I) and violated the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA") (Count II).*fn4 (Id. at 3-6.) Cosmopolitan and Aurora have separately moved to dismiss plaintiff's complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). For the reasons stated below, the Court will grant defendants' motions.

ANALYSIS

I. FRAUD

There are five elements of common law fraud: "(1) a false representation (2) in reference to material fact, (3) made with knowledge of its falsity, (4) with the intent to deceive, and (5) action is taken in reliance upon the representation." Bennett v. Kiggins, 377 A.2d 57, 59 (D.C. 1977).*fn5 "Fraud is never presumed and must be particularly pleaded. . . . One pleading fraud must allege such facts as will reveal the existence of all the requisite elements of fraud. Facts which will enable the court to draw an inference of fraud must be alleged, and allegations in the form of conclusions on the part of the pleader as to the existence of fraud are insufficient." Id. at 59-60.

Plaintiff has failed to allege facts enabling this Court to draw an inference of fraud. Nowhere in the complaint does plaintiff identify a "false representation" made by either Cosmopolitan or Aurora. None of plaintiff's allegations against Cosmopolitan -- i.e., that it did not properly disclose information, charged excessive fees, failed to return phone calls, and recorded documents late -- constitute false representations. While plaintiff claims that Aurora "knowingly and intentionally made fraudulent representations and misrepresentations and omission[s] of material fact" (Compl. at 4), she has failed to specify what these alleged misrepresentations were. Her conclusory statements do not satisfy the heightened pleading requirements for fraud claims. See Bennett, 377 A.2d at 59-60. Accordingly, plaintiff has not asserted sufficient facts to sustain her fraud claim.

II. RESPA

Plaintiff also alleges that "There was never any proper disclosures made to Plaintiff in direct violation of the code. The specific violation [is] of RESPA § 8(a), 12 U.S.C § 2607(a)." (Compl. at 6.) However, the provision cited in plaintiff's complaint prohibits kickbacks, and has nothing to do with disclosures:

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

12 U.S.C. § 2607(a). Presumably, plaintiff meant to cite § 2604(c), which requires that lenders disclose "a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur." However, because this provision does not provide for a private right of action, see, e.g., Collins v. FMHA-USDA, 105 F.3d 1366, 1367-68 (11th Cir. 1997), her RESPA claim cannot survive.

CONCLUSION

Therefore, for the foregoing reasons, defendants Cosmopolitan [Dkt. #9] and Aurora's [Dkt. #4] motions to dismiss are GRANTED and all of plaintiff's claims against defendants Cosmopolitan and Aurora are DISMISSED with prejudice.


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