S.D. Fla. Court Holds TILA Assignee Liability Limited To Violations Apparent At Time Of Assignment

TILA Mortgage Servicing Assignee Liability

On March 10, the U.S. District Court for the Southern District of Florida held that a mortgage assignee “may only be held liable for violations that are apparent on the face of disclosure documents that exist at the time of the assignment.” Alaimo v. HSBC Mortg. Servs., Inc., No. 13-62437-CIV, 2014 WL 930787 (S.D. Fla. Mar. 10, 2014). In this case, a borrower sued his current servicer alleging that the servicer violated Section 1641 of TILA by failing to disclose, upon the borrower’s request, the identity of the owner and master servicer of the loan, as well as the total outstanding balance that would be required to satisfy the mortgage loan in full as of a specified date. The court determined that TILA’s plain language demonstrates that “Congress intended assignees to be responsible only for violations within documents that existed prior to assignment.” While acknowledging the potential policy implication of its decision that could allow assignees to avoid liability for certain TILA violations, the court declined to go beyond congressional intent. The court rejected the borrower’s argument that TILA’s requirement that an assignee provide written notice to the borrower upon acquiring the loan includes an exception to the prerequisites for a suit against an assignee. The court dismissed the borrower’s suit.