Tara L. Keen, Plaintiff/Counter-Defendant-Appellant,
Robert C. Helson, Defendant/Counter-Plaintiff-Appellee, Ocwen Loan Servicing, LLC, Defendant-Appellee, Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A., as successor to J.P. Morgan Chase Bank, N.A., as Trustee for Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass Through Certificates Series 2005-RP3, Third-Party Defendant-Appellee.
from the United States District Court for the Middle District
of Tennessee at Nashville. No. 3:17-cv-00982-William L.
Campbell, Jr., District Judge.
Dietz, David Tarpley, David Kozlowski, LEGAL AID SOCIETY OF
MIDDLE TENNESSEE & THE CUMBERLANDS, Nashville, Tennessee,
S. Sauer, Brian R. Epling, BRADLEY ARANT BOULT CUMMINGS LLP,
Nashville, Tennessee, for Appellee Ocwen Loan Servicing.
Before: GUY, THAPAR, and NALBANDIAN, Circuit Judges.
THAPAR, CIRCUIT JUDGE.
someone, you must have a cause of action. And you only have a
cause of action under a federal statute if the statute's
text provides you one. The Real Estate Settlement Procedures
Act (RESPA) creates a cause of action but says that only
"borrower[s]" can use it. 12 U.S.C. § 2605(f).
A "borrower" is someone who is personally obligated
on a loan-i.e., someone who is actually borrowing money. Tara
Keen does not fit that description, so she does not have a
cause of action under RESPA. Instead, she will have to
vindicate her rights in state court under state law.
case turns on the difference between loans and mortgages. So
we need to start by explaining what they are.
you buy a house, you usually need a loan and a mortgage. The
loan is a contract between you and the lender. The lender
gives you money now so you can afford the house, and, in
return, you agree that you will pay back that amount (plus
interest) on a set schedule. Obduskey v. McCarthy &
Holthus LLP, 139 S.Ct. 1029, 1033-34 (2019). If you fail
to pay on time, the lender can sue you to get back what you
owe. But litigation can be time-consuming and expensive. So
most lenders want extra assurance that you will pay the loan
back. That is where the mortgage comes in. Under a mortgage,
you give the lender a legal interest in the house such that,
if you do not pay back the loan on schedule, the lender can
foreclose. Id.; see also Restatement
(Third) of Property: Mortgages § 1.1 (Am. Law Inst.
1997). By foreclosing, the lender can take possession of your
house-either for themselves or to sell it to someone else in
order to satisfy the unpaid debt you owe. Black's Law
Dictionary (11th ed. 2019) (defining
simply, a loan obligates you to pay the lender back, while a
mortgage gives the lender the ability to take your house if
you fail to meet that obligation. Thus, although most people
get both a loan and a mortgage when they buy a house, the two
are separate agreements setting forth different rights and
and Nathan Keen, like most of us, got a loan and took out a
mortgage when they bought their house. Both of them signed
the mortgage. But only Nathan signed the loan. So only Nathan
got money from the lender, and only Nathan promised to pay it
back. That is not a minor technicality. Rather, this fact had
legal and practical impact. For example, if Nathan defaulted
on the loan, and the foreclosure sale of the house was not
enough to satisfy the debt, then the lender could only go
after Nathan's personal assets, not Keen's.
Nathan was the one on the hook. Indeed, the mortgage made
this abundantly clear. It said that anyone "who co-signs
this [mortgage] but does not execute the [loan]"-i.e.,
Keen-"is not personally obligated to pay the sums
secured by this [mortgage]." R. 34-2, Pg. ID 455.
pair later divorced, and Nathan gave Keen full title to the
house. He died shortly afterwards. Although Keen was not
legally obligated to make payments on the loan after Nathan
died, she made payments anyway so she could keep the house.
But she later ran into financial trouble and fell behind on
those payments. Hoping to prevent foreclosure, Keen contacted
the loan servicer, Ocwen Loan Servicing, LLC. She had a
number of discussions with Ocwen representatives and
submitted several applications for different forms of relief.
Ultimately, those attempts failed. Ocwen proceeded with the
foreclosure, and Keen's house was sold to a third-party
after foreclosure, Keen sued both Ocwen and Helson under
federal and state law. Her only claims relevant to this
appeal alleged that Ocwen violated the Real Estate Settlement
Procedures Act (RESPA). See 12 U.S.C. § 2601
et seq. RESPA requires that loan servicers, like
Ocwen, take certain steps when a borrower asks for options to
avoid foreclosure. Id. § 2605; see
also 12 C.F.R. §§ ...